Waiting a full year to see how well you are performing against your annual targets is not good business. You need interim measurements. These are usually done on a quarterly basis. Business is based on quarterly measurements, so there is a need to be consistent across quarters. It is common to rely on one single quarter to pull out your numbers for the year. This is a traditional but dangerous way to work. Look carefully at the distribution of your sales, cash flow, and other measurements to see how they can be equally spread across all four quarters.
Measuring against quarterly performance has both an upside and a downside. The positive aspect is the fact that you are controlling the work and results on an incremental basis. The downside is that you may tend to overcontrol if the quarter is not exactly on target. A planner must exercise great care when the plan doesn’t make target in the first quarter. The tough question is to decide whether the plan is off because the original number was bad or because of the zigzag deviation of normal projections. To oversteer the plan will cause an erratic performance. To wait too many quarters before taking action can be equally dangerous because you are too close to year-end to make up the shortfall. Judging how and when to make course corrections is one of the toughest calls in planning. Use judgment and trust your original thinking before you change targets. Make corrections only when you see new, additional, or contradicting data that suggests an error in your original thinking.