Report on Performance Management System: Advantages and Disadvantages

This report provides an analysis of the performance management system implemented at Network Solutions, Inc. The report begins by outlining the advantages of the system, including its ability to support performance-based conversations, facilitate targeted staff development, and maintain a documented history of employee performance. It then delves into the disadvantages, such as the time-consuming nature of the process, potential for employee discouragement, and the risk of inconsistent messaging. The report emphasizes the importance of managers documenting observations and providing frequent feedback to mitigate these issues. It also cautions against using performance ratings as the sole basis for important decisions due to the potential for bias. The analysis incorporates references to relevant academic literature on performance management, supporting the arguments and providing a comprehensive overview of the topic.

Running head: PERFORMANCE MANAGEMENT SYSTEM
PERFORMANCE MANAGEMENT SYSTEM
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1. Advantages of performance management system at Network Solutions, Inc.
The advantages of performance management system for Network Solutions, Inc. are
as follows:
a) Supports performance-based conversations- This performance management system will
force the top officials to frequently have a discussion with the staffs about their performance
and thus it will help in improving their performance thus supporting the company’s goal in
the long run.
b) Targeted Staff Development- The performance management plan at Network Solutions,
Inc. has various levels according to certain ratings ranging from 1 to 3. In this system 1
means the highest rated employee and 3 means the lowest rated employee. This system will
help the managers to help the employees in an individual manner according to their ranks.
They can be given proper training for improving their performance and thereafter necessary
actions taken (Buckingham & Goodall, 2015). The employees rated 1 can be encouraged
more by providing them with award and they can be deployed to help their colleagues who
are lagging behind.
c) Documented History of the performance of the employees- This program will help the
company to keep a track of the performance of all the employees in a organized manner so
that each of their contribution to the goal of the company is understood and the ones who are
neither good in their work nor trying to improve can be dismissed.
2. Disadvantages of performance management system at the company
The disadvantages of performance management system for Network Solutions, Inc.
are as follows:

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a) Consumes a lot of time- Performance management is a complicated task altogether. The
managers will be overburdened with this as they have their own work and on addition to that
evaluating all the employees, writing down performance appraisals and working for the same
will be time consuming (Mone & London, 2018). The individual performance of the staffs at
Network Solutions, Inc. are in turn related to the overall performance of the department thus
this can be a issue or a negative aspect of the performance management plan. This can have
an impact on the other operations of the company.
b) Discouragement- The performance management plan can have negative impacts on the
employees as well. They could take this negatively and the mangers should be careful in
documenting not just the issues that an employee needs to correct but also appreciate the
positive things done by him.
c) Inconsistent message- It can happen that due to the busy schedule, managers forget
consider some great works of the employee and this can send an inconsistent message to
them. This can be avoided by keeping a good habit of documenting the observations of the
employees and feedbacks should be shared at a frequent basis (Arnaboldi, Lapsley &
Steccolini, 2015). The ratings provided should the employees should not be the parameter to
judge them when taking important decisions as this can affect them. The ratings provided can
be biased in nature and this can have serious impact on the employees.

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References
Arnaboldi, M., Lapsley, I., & Steccolini, I. (2015). Performance management in the public
sector: The ultimate challenge. Financial Accountability & Management, 31(1), 1-22.
Buckingham, M., & Goodall, A. (2015). Reinventing performance management. Harvard
Business Review, 93(4), 40-50.
Mone, E. M., & London, M. (2018). Employee engagement through effective performance
management: A practical guide for managers. Routledge.