Disadvantages of Poorly Implemented performance management system

What happens when performance management systems do not work as intended, as in the case of Sally’s organisation? What are some of the negative consequences associated with low-quality and poorly implemented systems? Consider the following list:
1. Employees may quit due to results.
If the process is not seen as fair, employees may become upset and leave the organisation. They can leave physically (i.e., quit) or withdraw psychologically (i.e., minimize their effort until they are able to find a job elsewhere).
2. False or misleading information may be used.
If a standardized system is not in place, there are multiple opportunities for fabricating information about an employee’s performance.
3. Self-esteem may be lowered.
Self-esteem may be lowered if feedback is provided in an inappropriate and inaccurate way. This, in turn, can create employee resentment.
4. Time and money are wasted.
Performance management systems cost money and quite a bit of time. These resources are wasted when systems are poorly designed and implemented.
5. Relationships are damaged.
As a consequence of a deficient system, the relationships among the individuals involved may be damaged, often permanently.
6. Motivation to perform is decreased.
Motivation may be lowered for many reasons, including the feeling that superior performance is not translated into meaningful tangible rewards (e.g., pay increase) or intangible rewards (e.g., personal recognition).
7. Employees suffer from job burnout and job dissatisfaction.
When the performance assessment instrument is not seen as valid, and the system is not perceived as fair, employees are likely to feel increased levels of job burnout and job dissatisfaction. As a consequence, employees are likely to become increasingly irritated.6
8. There is increased risk of litigation.
Expensive lawsuits may be filed by individuals who feel they have been appraised unfairly.
9. Unjustified demands are made upon managers’ resources.
Poorly implemented systems do not provide the benefits that well-implemented systems provide, yet they still take up managers’ time. Such systems will be resisted because of competing obligations and allocation of resources (e.g., time). Worse, managers may simply choose to avoid the system altogether.
10. Standards and ratings vary and are unfair.
Both standards and individual ratings may vary across and within units, and may also be unfair.
11. Biases can replace standards.
Personal values, biases and relationships are likely to replace organisational standards.
12. Mystery surrounds how ratings were derived.
Because of poor communication, employees may not know how their ratings are generated or how the ratings are translated into rewards.

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