Problems with Traditional Performance Management Systems

Introduction

For years performance management has been a manual process conducted by the HR team on an annual basis. Annual objectives are determined, employee goals are established and delegated, and the employees work towards accomplishing them. Since appraisals happen yearly, at the end of the year, performance is computed and rewarded proportionately.

The main objective of this traditional method of employee performance management was to ensure a fair technique of rewarding employee efforts. There was less focus on improving productivity and achieving organizational goals. Hence, this method worked. Also, in smaller-sized organizations, few people were able to manage this system. But as organizations grew bigger and the focus shifted from only performance measurement to management and improvement, traditional mediums became outdated.

Read this blog to find out the disadvantages of the traditional performance management system and how automated agile performance management software can help overcome these problems.

Problems with traditional performance management systems

1. Time intensive
2. People Intensive
3. Frequency
4. Challenging to measure
5. Less reliable
6. Linear communication
7. Less scope of improvement

1. Time intensive

The traditional performance management system takes a lot of time to prepare for the same. Even execution is not easy and is very time intensive. Months of preparation are required to be able to conduct the same effectively. 

Software and tools carry the same process automatically, saving a lot of time for the HR team. A one-time implementation may require time investment and costs. However, since this is a recurring process, it is worth the effort.

2. People intensive

In the traditional method, many employees of the HR team dedicate their work hours towards completing annual performance management. If this system gets automated, the team can work more effectively. A lot of money on hiring additional staff will be saved, too. The existing staff can focus better on managing other crucial aspects. 

3. Frequency

One of the disadvantages of a traditional system is that it is a yearly affair. It is done once at the end of the year. Thus, the company waits to measure yearly performance and then analyzes the same and measures how the performance is aligned with its goals. It wastes crucial time to take the needed steps and rectify performance issues or identify under-performers. 

On the contrary, software for the same will ensure real-time performance measurement and analysis, creating a scope for continuous improvement. 

4. Challenging to measure

The traditional system is human-driven, making it difficult to accurately measure every employee’s performance without any errors. Human interpretations also leave scope for bias and personal preferences. Hence, there are many challenges to presenting a fair and just measurement of employee performance.

5. Less reliable

Traditional means are relatively less reliable than modern automated means of measuring. The complexities involved in calculating are high, due to which there are greater chances of errors. It makes it a very unreliable technique to measure employee performance and makes it a basis for rewarding employees. Even the staff lacks trust in the system and tries to resort to unwanted practices to create favoritism.

6. Linear communication

There is less scope for 2-way communication between the managers and employees in the traditional system. Managers assess the performance and communicate the same. In modern methods, there are different rating methods, 360-degree feedback, and employee participation in the performance management process.

7. Less scope of improvement

The traditional method provides very little scope for improvement. The focus is on measuring employee performance and rewarding them fairly. Traditionally the objective was to build a system to motivate the employees to perform better by providing them with additional performance-linked remunerations. Irrespective of employee skills and abilities, they were expected to deliver as per the goals.

Modern techniques have evolved to enable employees to perform better by becoming their partners in their journey. It works towards supporting them by helping them find the reasons for not achieving their goals on a continuous basis. It also points out the training and upskilling courses that can help overcome the reasons for underperformance. 

Conclusion

Thus, modern, automated, and agile performance management technique delivers better results. It assists in increasing productivity across the organization and reducing the costs of managing performance management systems.

However, selecting the right tool can get tricky. So, read our blog on identifying the best tools and software for employee performance management.