Pros and Cons of Performance Management System

The purpose of a performance management system is to pave way for easy coordination between employees and managers. It aids managers in learning how to give timely feedback and measure the performance of employees while for employees, it improves their work, gives them a sense of responsibility, and establishes better relations with managers.

Some may mistake this as an annual performance review but it’s much more than that. It doesn’t happen only once a year rather, it’s an ongoing process with continuous interaction between employees and managers and amongst employees as well. It’s not just about the organization meeting all of its goals but rather the focus is a lot more on employee development.

Pros of Performance Management System

1- Fair work comparison

It’s easy to play favorites and nepotism thriving in a workplace that evaluates performance in traditional methods but, the same can’t be said for computerized performance reviews. An LMS is programmed in such an easy that it looks at hard, data-driven results and statistics. Employees will be reviewed on the basis of their work performance, not as individuals or on their characteristics.

2- Targeted employee development

All the employees are on the path to grow in their respective fields and develop into better, more efficient employees. This system helps them achieve that in a systematic and proficient way. With a PMS, organizations can understand the areas where they need to focus on, understand the skills and individual expertise of each employee, and identifying employee growth opportunities. These are all part of a succession planning process.

3- Identifying Underperforming staff

No matter how hard the company tries to train and assist each employee to reach an equal footing in terms of performance, there will always be some which will be left behind. Either due to their own faults or external factors.

Through this system, managers can guide them regarding their poor progress and how to improve it, or if they continue to work in an inefficient manner, a smooth transition can be accomplished if the underperforming employees need to terminate.

4- Rewards employees for good performance

There is no denying or sugarcoating the fact that employees come to work because they want to earn money. Money is many times, the deciding factor between an efficient, hardworking employee and a frustrated, low-achieving one.

When employees receive a pay raise or a performance bonus, they can plainly see the correlation between work and performance. This way they’ll be motivated to work harder and meet all the preset goals.

Cons of a Performance Management System

1- Limits creativity

Many times to achieve the desired work outcome, employees have to take steps that limit their creativity and growth. Performance evaluation criteria are sometimes too strict and employees have to go with the cookie-cutter steps, that are repetitive and do not help them improve their skills or help them in being innovative.

2- Competition between employees

While competition is good within an organization, it can also create problems. Employees will focus too much on rewards and outdoing other coworkers that work environment can become unhealthy, eventually an unhappy place for employees.

Many employees are quick learners and progress faster than others, making the employees with poor grasping abilities feel incompetent or under qualified. This on top of having a competitive work environment can lead to many employees resigning or not giving their all in work.

3- Time-consuming

Managers spend a lot of time reviewing employees’ work performances and writing appropriate appraisals for them, generally an hour per employee.

If it a large company or an enterprise, it could take weeks for this task to be completed. Along with this, managers need to relay feedback to the employees, which is tedious and takes up a lot of time as well. This slows down work progress. 

Conclusion

Overall, it can be concluded that the performance management system has changed the world for the better. Even with the cons, a performance management system is required for the development of employees, to assist managers, and to meet the objectives of the organization.