Pros and Cons of Using Performance Management Systems

One of the biggest challenges for managers is figuring out how they can effectively manage employee performance. Everyone wants to be sure they are getting the most out of their investments, and there is certainly a lot invested in employees. An organization is only as good as the caliber of its employees, so it only makes sense that managers want to ensure their employees are performing at their highest level. Performance tools such as reviews and appraisals have long been used as a means for identifying how well employees are contributing to the success of the business. However, debate persists as to whether or not these kinds of performance reviews are meaningful and whether they are worth the time and effort. If done properly, this can be a very meaningful process for both the employee and the manager. On the other hand, it could have a negative impact on employees and managers for a number of reasons. Let’s take a look at some of the pros and cons of performance management.

Pros of a Performance Management System

It Provides Employees with Valuable Feedback

Feedback is critical for employees because if they don’t know what they are doing wrong, they can’t fix it. Feedback is very useful for employees because it provides them with valuable information about their strengths and weaknesses. It also gives managers a perfect opportunity to provide insight and tips for improvement. 


It Opens the Door for Communication Between Employees and Their Manager

Managers have a lot on their hands and they get busy with their day-to-day responsibilities so it’s not always feasible for employees to chat with them about questions or concerns. Performance reviews are a great time for employees to bring up any work-related issues with their managers. Performance management encourages a solid foundation for transparency and communication between workers and managers and this is extremely important for employee engagement. 


It Can Be Used to Provide Support and Encouragement

Performance reviews and appraisals aren’t always about highlighting the negative. They can also be used to celebrate all of the successes and accomplishments of an employee. In fact, appraisals should be positive and they should always begin by focusing on what the employee is doing well. If needed, managers should then gently discuss any undesired behaviors by offering a positive solution. In addition, performance reviews are a perfect opportunity to reward employees for a job well done. This will result in happier, more motivated employees. 


Under-Performers Can Be Identified and Eliminated

No matter how hard managers try to prepare employees for their job, the reality is that some employees just won’t make the cut. Performance management evaluations can help businesses identify and document under-performing employees, which will make for a smoother transition if the employee ends up needing to be terminated. 

Cons of a Performance Management System

It is Time Consuming

On average, managers spend about an hour per employee writing performance reviews. For managers that have 50 or more employees, this process could take weeks to complete. Needless to say, this can be a very tedious and time consuming task and it takes managers away from other responsibilities. 


It Can Discourage Employees

While a manager’s intentions might be good, the fact of the matter is that some performance reviews could end up doing more harm than good. If the review is not a pleasant experience, it has the potential to discourage employees. For this reason, managers should focus on making the process positive, encouraging, and used to reinforce desired behaviors. Even if there are improvements that need to be made, it is critical that reviews discuss both positive and negative observations. 


It Can be Difficult to Remember Everything an Employee Has Done

We all struggle to remember things from time to time, especially when we are juggling a heavy workload. Managers may sit down to give a performance review and fail to acknowledge something positive that the employee was very proud of. This could send the wrong message to the employee that their hard work went unnoticed, when in fact the manager simply forgot to mention it. In order to prevent this from happening, managers need to document both good and bad behaviors as they happen so they don’t leave important information out during a review. 


It is Difficult to Remain Unbiased

It can be very difficult to keep biases out of performance appraisals and this can lead to tension and frustration among staff members. A true, honest performance review requires a manager to be structured and objective in order to remain unbiased. This is extremely important so employees feel like they are receiving fair evaluations.


If you are interested in learning more, contact us today at 1-800-501-1245 to request information about training courses from the Management Training Institute as well as other corporate training programs offered through our parent company Bold New Directions.