Management is much like retail..."What have you done for me lately"?
The cost of doing performance management and employee reviews incorrectly is something that many managers, HR professionals and companies never consider. It's too bad. Yes, there is a cost, and a very heavy cost, to doing things badly in the area of appraising employee performance, or not managing performance properly.
Poor performance management practices incur direct costs through loss in productivity that happens when performance problems are not addressed quickly. For example, a manager who only reviews employee performance once a year, and rarely talks to employees about performance through the year is likely to have huge inefficiencies. If the problems were discovered and addressed during the year, many of those producitivy problems could be eliminated.
Other costs occur, too. Employees subjected to poor performance management and performance review practices are likely to get upset, angry, demoralized and demotivated. They start to believe that managers aren't serious about performance, or, even worse, are trying to find people to blame for performance problems.
