Top 5 Reasons Performance Management HR Systems Fail

Performance reviews can be very useful, but they’re often treated like a necessary evil, as though they’re something that has to be “gone through” in order to get back to business. This perspective can make the process less effective, and can result in a lost chance for improvement.

In an effort to recover that missed chance, many companies turn to a performance management system. The purchase of these systems is one of the most common administrative purchases a company makes after an HR management system or payroll administration system such as iSoved. Often, however, the use of these systems is just a treatment for the illness and not a cure for the disease. The result is that the company spends money – sometimes a lot of money – on limited results. Why do these systems fail?

  1. Employee Evaluations are Limited to Review Time

You wouldn’t expect your car to work at top performance without any maintenance, but that’s exactly what many employers expect from their employees. They seem to expect that their employees can perform well by only hearing about their performance once a year. If you’re not regularly checking in with your employees, you shouldn’t be surprised when they don’t meet your expectations or if they have an issue or a barrier that you weren’t aware of. A performance review shouldn’t be a surprise.

To combat this problem, your managers should schedule regular one-on-one meetings. Your managers should take the time to check in with their associates and make sure that goals are clear and on-track.

  1. The Performance System is Too Complicated

Your managers should understand your management system without using a map, even if your performance management system is unlike any other piece of human resources software currently in use at your company. If your system is too complicated or burdensome, you’ll find that your managers aren’t making use of it, which just opens the door to more problems.

One possible solution is to provide refresher training for the performance management system and written documentation to accompany it. You can also train a subject matter expert to provide backup to her peers who are less confident with the system.

  1. Your Performance Management System is Outdated

Performance management, like many other Human Resources systems, is always subject to change and updates. If your system isn’t updated, you will find that your performance reviews are simply not as effective as they could be. In light of the weight given to performance reviews in modern business, it’s not a good idea to waste time and resources on a process that doesn’t meet all of the company’s needs – or the needs of the employee, for that matter.

When it comes to your performance management system, don’t be afraid to seek outside assistance. A good HR Management services team will be able to help your company find a worthwhile performance management system and get it set up and running.

  1. Recent Performance is Overemphasized  

The biggest problem of the annual review is that it naturally overemphasizes the most recent performance. Every employee can think of a time when they did stellar work on a project shortly after the annual review period had ended, resulting in no recognition in either review period. This results in an unfair and inaccurate review that only frustrates the employee.

The overemphasis on an employee’s most recent performance is a shortcoming of many performance management systems. One of the best ways to combat this is to have mid-year reviews and one-on-one meetings in order to keep abreast with an employee’s progress.

  1. Employee Goals and Company Goals are Disconnected

As adults, we know that individuals have goals and that employers have goals. Under the best circumstances, these goals are compatible. Much of the time, however, employers are oblivious to the goals of their employees. The difficulties this causes are never so clear as during the performance review.

The most effective way to deal with this disconnect between goals is to give the employee a chance to voice their opinions and desires. The performance review is a natural time to do that. Work with your employee to set goals for the upcoming year, then follow up with your employee throughout the year to talk about progress and to make any adjustments necessary.

At the end of the day, a performance management system is only as strong as the department that it’s supporting. Human Resources can play a big part, however, by providing training, direction, and suggestions.

For more information on how Commonwealth Payroll & HR can work with you on your strategic human resources planning, call us today at 877-245-1159.