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Is measuring employee performance in an organization all pros and no cons ?

Dharshanaa  Ayaloo's Profile

Other than obvious reasons why employee performance measurement systems are implemented by businesses ( encourage efficiency with lucrative rewards and etc ) what are the negative sides of measuring employee performance in an organization ?

Answers

Topic Expert
Wayne Spivak
Title: President & CFO
Company: SBAConsulting.com
LinkedIn Profile
(President & CFO, SBAConsulting.com) |

People don't like to live in a constant "test". Just remember the optimist/pessimist coin; what you think is an advantage, someone else won't.

Example: "... encourage efficiency with lucrative rewards..." can also be seen as 'discourage increased productivity because of disincentive of rising minimum levels'.

I.e., the group is able to increase productivity from 1 - 5 units an hour. They get a bonus. Now they must not only maintain 5 (otherwise they loose some tangible benefit) but are pushed to go to 10, whether 10 is attainable or not.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

I don't know that I would consider measuring employee performance as negative. If someone isn't performing appropriate conversations need to be had. In order to grow someone, you have to measure performance and behaviors. None of us are perfect nor will we ever be, so if we shift the demeanor of conversations to creating areas of opportunities and building on one's strengths then it won't be viewed as negative.

Topic Expert
Regis Quirin
Title: Director of Finance
Company: Gibney Anthony & Flaherty LLP
LinkedIn Profile
(Director of Finance, Gibney Anthony & Flaherty LLP) |

Employee performance measurement is essential, but fraught with issues. The theory is sound, i.e. Christy’s point. To me the greatest issue with the Performance Review is inconsistency. If done correctly, you praise and give pointers to improve.

But I have run into so many Managers that are not willing to have the “Areas Requiring Improvement” discussion. If a Manager avoids having the serious discussion, and just provides an “Acceptable” rating, the employee will continue the incorrect behavior, as the review validates what the employee does is “Acceptable.”

Regardless of the scale and regardless of the question, during a performance review (at least initially) an employee only hears “Good” or “Bad.” When a Manager is silent on an issue, it is interpreted as “Good” by the employee, as they believe if it was “Bad” the Manager would have mentioned it.

I have inherited employees from Managers before. During the time of the first performance review with me and the individual, I have heard, “That was never told to me before.” Sometimes the outcome is positive, and other times it causes huge problems.

So yes, a poorly managed Performance Review can have negative outcomes to an organization.

Ken Stumder
Title: Finance Director / Controller
Company: Ken Stumder, CPA
(Finance Director / Controller, Ken Stumder, CPA) |

One of the cons of performance review programs is that it is difficult to achieve complete uniformity and objectivity, which impacts their credibility.

If the review process does not result in actionable feedback on how to improve or real rewards for good performance it is just an HR tracker to justify terminations should they be necessary.

I've seen organizations where the managers are reluctant to give high ratings. Those are usually companies that have a ranking system / peer bench-marking.

Topic Expert
Christie Jahn
Title: CFO
Company: Prime Investments & Development
(CFO, Prime Investments & Development) |

Regis, you are so right. The problem isn't the tool it's the way the tool is used. Terminating someone should never be a shock to the person if the manager is doing their job all the way through the process; just as giving areas of opportunity in a performance review shouldn't be a shock either.

Jennifer Eversole
Title: Partner & Knowledge Enthusiast
Company: Management Stack, LLC
LinkedIn Profile
(Partner & Knowledge Enthusiast, Management Stack, LLC) |

Performance reviews are reactive and backward looking. In my experience, more often than not, they focus on only recent events rather than the entire review period. I read a great book called "Catalytic Coaching" by Gary Markle. The book discusses the benefits of abandoning the traditional performance review system and replacing it with a coaching system. The coaching system is a systematic approach that focuses on what the employee will do in the future, not what they have done in the past. It also discusses "de-couplling" coaching sessions from compensation, which is a tricky subject. I recently published a blog to Proformative that gives a little more detail on the subject:

https://www.proformative.com/blogs/jennifer-duff/2014/05/01/put-me-coach

I would definitely suggest reading Markle's book if you are interested in more information. (FYI...I don't have any ties to Markle or his company, I just think it is a great concept.)

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