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Are There Any Disadvantages of Having a Performance Management Plan? A Closer Look

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Did you know that 25% of workers quit their jobs last year? If you’re worried about retention at your company, you may be wary of using a performance management system plan. After all, you don’t want to make new employees feel like they’re under a microscope.

But with the right approach, you may be able to help your best employees feel invested in their work. It’s wise to weigh the pros and cons. Read on to learn about the disadvantages — and pluses — of having a performance management plan.

Get Ready to Invest Time

When managers are already buried under work, the last thing they want is another responsibility. A significant disadvantage of performance management is that it takes time. And the best management should be thorough.

Beyond scheduling quarterly meetings with employees, you’ll need to document your review. It could take an hour for each employee. Plus, you’ll want to review it with other managers to ensure complete transparency.

Tracking all of the successes and missteps of a given employee can be cumbersome. It is especially true if you have 12 direct reports — or even more.

The time required to construct and oversee a management plan can turn into several hours each week. Ultimately, it will take time away from other job-related responsibilities.

Additionally, you’ll need to store everything in digital or physical personnel files. It may require coordinating with your human resources department. 

Prejudices Can Affect Performance Management

Even the most balanced person carries biases. And they can affect the way you assess your employees.

Another disadvantage of a performance review is that they’re not always objective. Further, you might not have the correct information to make an informed assessment.

As a manager, you might not know all of the behind-the-scenes details that affect the outcome of a team project, for example. And this is particularly problematic if the outcome is not good. Other employees may have been too aggressive or lazy, impacting the employee under review. 

Alternatively, you may be biased based on a person’s educational background or work history. For instance, you might unknowingly favor someone with a degree from the same school. Or you might make assumptions about someone with limited experience, even if they’re a fast learner.

You Risk Discouraging Employees

Why else is performance management potentially risky? Sensitive employees may feel discouraged if you flag any issues. New employees, in particular, need to know that they can stumble but still move forward in the organization. 

That’s why it’s critical to start your conversation and report with constructive feedback. An employee who is prompt and shows good teamwork skills should be praised for this. Offering this feedback on the front end can lessen the sting of any suggestions for improvement.

Try to couch issues in terms of how an employee can overcome them. Before meeting and writing up a report, set a measurable goal for the employee. Offer concrete steps they can take to achieve it.

And, of course, you’ll need to spend time preparing before an in-person performance management meeting. If you fumble over details or make inconsistent statements, you could confuse your employee. They may have been told they were doing well at the last meeting, so a sharp shift in the other direction could be concerning.

Management Software Can Streamline Reviews

Investing in high performance management strategies, such as software, can make the process easier. If the thought of writing a performance review seems like writing a term paper, good software can help you chip away at it. 

Use software to take notes about your employees. If your new account manager scores a new client, jot down the date and a few observations. If an employee fails to pull together a cohesive marketing plan, jot down notes on what you believe caused the failure.

When it’s time to compile a report about an individual, you’ll be ready. And most good software will allow you to set goals, assess company needs, and create measurable objectives. You even can include tangible rewards, like gift cards or bonuses, to encourage improvement.

You can identify obstacles and map out goals on a calendar. And when you share performance goals with your employees weeks or months ahead of a review, they’ll know what’s expected of them. This kind of transparency can help build more vital workplace trust.

You Can Weed Out Low Performers

One of the key advantages of developing a performance management plan is to weed out weak employees. Anyone who seems disinvested in their work will have to face the music during a performance review. You may want to allow a probationary period for improvement if you think it’s worthwhile.

But if you’ve set benchmarks and an employee fails to reach them, you’ll have documented proof. Meet with an underperforming employee to gauge their interest in improving. If they’re combative, you might be better off letting them go.

While a management plan does require lots of time, you stand to gain a more efficient operation. A good business plan should outline strategies for growth and improvement. You might benefit from including routine performance management in that plan!

Pursue a Performance Management Plan

A performance management plan does have disadvantages. The biggest one may be the sheer amount of time required of managers. There is also a risk of demoralizing employees when you suggest areas for improvement.

But with a more streamlined approach, you can achieve management solutions. To find the latest business tips, check back for new articles soon.

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