5 Performance Management Mistakes That You Should Never Make

by Chandler Barr Sep 28,2022

The People Strategy Leaders Podcast

with Srikant Chellappa, CEO

Performance reviews play an important role in an employee’s work life. They decide if an employee had worked well enough to get a promotion, a raise, etc. Most people are conscientious about how they handle performance reviews. After all, nobody wants to be the bad guy, even if an employee’s performance isn’t up to par.

An effective performance management system helps identify employees’ issues and find solutions for the same. This will improve their quality of work and in turn, increase productivity.

However, there are certain performance management mistakes, whether they are made knowingly or unknowingly, that HR administrators, managers, and CEOs should avoid making as much as possible.

5 Performance Management Mistakes to Avoid

Not Setting Clear Expectations

One of the biggest mistakes that can affect the entire organization is not having clear expectations from your employees. It is important to set clear goals and have your employees understand those goals. When goals are clear, both to the manager and employee, it becomes easier to meet goals. Not having clear goals or expectations can literally lead to everything being a muddled mess.

Your Process Doesn’t Help Employee Development

Your performance management process should help your employees understand their strengths and weaknesses. It should help them improve themselves and know how to achieve their organizational goals. Your process should make your employees feel fulfilled. Most performance management processes tend to focus on the financial aspect of performance reviews when in reality, it should be the opposite.

Holding on to Low Performing Employees

Another big mistake employers make is not letting their low-performing employees go. Low-performing employees become millstones over a period of time and create a lot of resentment among other employees. It’s alright to give employees first and second chances, but beyond that, you need to decide if those chances are worth it.

Also Read: Employee Performance Reviews: A Guide For New Managers

Hoping For The Best – Waiting for Performance Appraisal to Give Feedback

Managers often make this mistake; they wait for performance appraisals (which are at the end of the year in most cases) to give feedback about their employees’ performance.  In order for feedback to work, it needs to be fresh and current. Stale feedback helps no one. Think of it in terms of food. Which do you think gives you better nutrition, freshly made bread or stale bread which is over a year old?

Limited Performance Incentives

One of the most important things about performance reviews is giving incentives. When employees work hard and accomplish their tasks as expected, there’s nothing wrong with rewarding them with some incentives. Incentives are not just monetary. They might be perks and privileges, basically anything a manager thinks their employees might appreciate.


An effective performance management system is beneficial to every organization. It helps managers to guide employees on the right track and recognize the right talent. The lack of such a system in an organization would lead to performance management mistakes, which will result in financial and productivity losses.

performance management mistakes


Chandler Barr
VP of Sales

Chandler Barr is the VP of Sales at Engagedly and is focused on driving a culture of progress over perfection in a no-fault environment where employees are secure and encouraged to think creatively to solve problems. Chandler is a seasoned leader that has scaled sales teams for SaaS startups and multibillion-dollar publicly traded tech companies, as well as, led Marines to accomplish the mission during hardships overseas.

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