Advantages And Disadvantages Of Employee Performance

Employee performance is described as “the job related activities expected of a worker and how well those activities were executed.” It is the accomplishments and achievements of an employee or group of employees, which are often measured. Employee performance measurement is a management practice, defined as “a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organisation”. It is a key practice that is implemented in more than 90% of organisations (as seen from survey) and has many advantages as well as some significant disadvantages.

One of the many types of performance measurement is performance appraisal. Performance appraisal is the examination of an employees work performance and the comparing of it with predetermined standards. This is then usually followed up by feedback to the employee. This form of performance measurement is quite efficient, as it motivates employees to perform at a higher level and improve their future performances. There are several different forms of performance appraisal, such as ratings scales and 360-degree feedback, which both include feedback to the employee as well as evaluations of the employee’s performance. Although this is one of the major ways to measure employee performance, it is not the only way. Some organisations focus almost solely on performance appraisal instead of all the different types of performance measurement. This leaves the measurement of an employee’s performance very limited and insufficient. This strong focus on performance appraisal is one of the few key disadvantages of performance measurement in organisations.

Key Performance Indicators (KPIs) are a specific t...

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... a result of key performance indicators, can also be an issue. It discourages creativity, as employees are only attempting to reach the set goals, and nothing more. It sidetracks employees from the importance of the work itself, and it causes employees to not be focused on the job at hand. Negative feedback that employees receive from managers may demotivate them and lower their self-esteem. This can cause the performance of the employee to drop, which would be a huge detriment to the organisation. The negative feedback may also cause the employee to become confused, which would again cause them to not perform as well for the organisation.

Employees who are not ranked near the top of the list in a ranking method of performance measuring could have morale issues. Also, the strengths and weaknesses of employees cannot be determined easily through the ranking method.