To improve the company profit margin: Performance management improves business performance by reducing staff turnover which helps to boost the company profit margin thus generating great business results.Consequently, such reviews tend to be incorrect, prejudiced, and demotivating to staff.Īlso Read: The Other Critical Elements of an Efficient PMS Purpose of a Performance Management System A singular review cannot adequately capture and cover all angles fairly. 51% of employees are of the opinion that annual reviews are grossly inaccurate: Considering the preponderance of events that occur within a space of 6 months to a year, it may not be out of place to say annual reviews may be irrelevant in this regard.Only 5% of HR leadership find performance reviews satisfactory: In actual fact, 95% of managers are displeased with long-established performance management customs.A threatening situation like this actually impairs the individual’s brain function according to research carried out on the brain.
90% of performance reviews are emotionally and mentally distressing: The intense focus put on recent events and often discouraging feedback damages the person’s self-confidence.80% of the youthful generation wants instant gratification rather than a formal review: An annual review leaves a 12-month gap during which period outstanding achievements would have been forgotten due to the passage of time.Statistics About Modern Performance Management Systems Thus, performance management systems were born. The resulting restructuring that ensued led to the evolution of a system that increased organizational effectiveness and employee productivity in a very drastic manner. This state of affairs made organizations realize the need for changes in their approach to employee management. The system then employed was cumbersome and time-consuming. In the not too distant past, corporate entities were run in a traditional way, part of which involved appraising staff from time to time to assess their input, output, and productivity with respect to organizational goals.
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