Skip to content

7 Reasons Of A Typical Performance Management System Fails

Performance management systems are important for companies and businesses. These systems help employers keep track of their workforce. Performance management systems also help improve efficiency in the workplace and help businesses accomplish more of their goals. This leads to better outcomes and improved results overall.

Still, performance management systems need to be used properly. I’ll talk about 7 flaws of a typical performance management system here. This way you can avoid making these mistakes!

Common Flaws in Performance Management Systems:

Flaw #1: Annual Goal Setting Doesn’t Account for the Real Pace of Business

One of the most common mistakes made with performance management systems is creating unrealistic goals. Setting annual goals that do not fall in line with the real pace of business is a recipe for disaster. So, you want to set realistic goals that your employees can actually reach for.

I suggest using KPI to make sure you are on track to complete your goals within a certain time frame. You can also use OKR to set these goals and track them along the way.


Flaw #2: Performance Feedback is Too Infrequent or Not Giving Employees Timely Feedback

Many businesses make mistakes with feedback. They either don’t give feedback enough or they don’t give feedback in a timely manner. To see real changes in your workforce, you want to provide feedback often and promptly. This way workers know what they are doing wrong and can make changes in a timely manner.


Flaw #3: Failing to Follow Through on the Performance Appraisal Schedule

In some cases, no feedback is left at all for the employees. This is even worse than not giving feedback on time. If you don’t provide feedback you are defeating the entire purpose of this system. So make an effort to engage in constructive feedback.


Flaw #4: Not Documenting the Process

Another mistake that people make using this system is failing to document the process. You want to document everything and clearly explain why you are giving a certain rating to a worker. If workers have questions about their rating it will be harder to answer them without written documentation.


Flaw #5: Traditional Reviews Don’t Help Employees Grow and Develop

Traditional reviews are not as helpful as you would think. Instead, try and talk with employees more often and schedule performance reviews more frequently. You can meet and talk with your workers 1 on 1 about goal setting. This will boost performance and morale much more effectively. This will also make your office more of a community space!


Flaw #6: Not Recognizing Star Employees

You shouldn’t simply focus on the negatives aspects of a workforce. In fact, this is a big mistake. So, make sure that you notice star employees. Compliment and encourage the people who are making a difference. And, don’t just give everyone the same rating for their work performance either. If someone stands out, let them know!


Flaw #7: Focusing on Outdated Performance Review Methods

Finally, the last mistake you don’t want to make is focusing on outdated performance review methods. It can be tempting to rely on methods used in the past. However, you want to move forward with current technology and methods. Always be willing to innovate your methods of performance review. And don’t be afraid to try something new when assessing your workers!

How to build

winning teams with KPI?

Hey, I’m Shone Fone Ng. I’m determined to make a business grow. My only question is, will it be yours?


About Shone Fone

Shone Fone is a Serial Entrepreneur for 10 SMEs since 1997, businesses ranging from equipment supply, manufacturing, equipment maintenance and ISO 17025 calibration service, HRM software development and training. He also an award winning entrepreneur of Asia Pacific Top Excellence Brand – Book of The TOP Recognition.

Free eBook - The KPI & OKR Strategy to Grow Business Quickly

How to build

winning teams with KPI?

Hey, I’m Shone Fone Ng. I’m determined to make a business grow. My only question is, will it be yours?

I hope you enjoy reading this blog post.
If you want my team at DoerHRM to help you build a winning team for your company, just click to speak with our KPI consultant.

Related HRM KPI & OKR Performance Management Articles

Get a free, full-feature trial of
DoerHRM KPI Performance Management Software for 14 days

No credit card required.

Start using DoerHRM today!

Hi Managers, do your employees have
signs of low motivation?

Through a 30 min FREE consultation,
know step-by-step guide to learn

Have a 1-on-1 free consultation
with our
DoerHRM KPI Expert

  • A customized program tailored to meet your team’s specific needs and goals.
  • Interactive workshops and activities that promote teamwork, communication, and problem-solving.
  • Expert facilitation by experienced trainers and practitioner who will guide your team through the program.
  • Follow-up support and software system to ensure that your team continues to work effectively together after the program.
Free eBook - The KPI & OKR Strategy to Grow Business Quickly

Download Free Ebook now!

Please check your email for the download link!