Annual Review Versus The Performance Management Software


Till the very recent past, annual reviews were perhaps the only process of employee evaluation both with regards to their individual performance. But in the recent past many companies have been rethinking the process of performance management followed till date. This gave rise to the HR software wherein focus was given to many different aspects of an employee including his performance, progress in a project, contribution to the company’s bottom line etc.

Disadvantages of annual reviews

This process of rethinking the traditional model followed for employee appraisals was a result of many adversities which was plaguing the process of annual review being followed. Some of the disadvantages were:

  • Most felt that the traditional review process just restricted creativity, generated loads of paperwork and actually served no real purpose.
  • There was lack of collaboration as well as innovation.
  • There was a general dislike for the appraisal process among both supervisors and their subordinates which was becoming a perennial problem.
  • They put great emphasis on financial rewards which were difficult to maintain during times of inflation and merit-pay budgets.
  • Punishments were given based on their past performances thereby putting their future work morale into jeopardy.
  • There was no process of trying to improve an employee’s current performance or for talent grooming etc.

Reasons to introduce performance management

But even the introduction of the human resource software was not enough to address and provide a 360 degree feedback for individual employees. Thus the futuristic performance management software was founded which built on the foundation laid by the human resource software. There were many advantages to the use of this software since it was able to:

  • Groom employees to become supervisors and managers into senior level executives etc.,
  • Help an individual build on his strengths and focus in areas in accordance to his forte or potential,
  • Implant a sense of accountability towards the work done by individual employees,
  • Match talent to work areas which were not being tended to,
  • Quicken the process of appraisal of the performance of employees etc.

There were many more aspects to the introduction of this software and the discontinuance of the traditional process of appraisal. Those companies that adopted the new approach were able to sustain themselves profitably and also become famous as a good employer’s brand.

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