Why is a feedback based performance management system better?

Many organisations have started moving towards a feedback based performance management system as opposed to a rating based system for a better performance management of their employees. There are many who believes that a rating based performance management is still better as it gives objectivity to the outcome. I agree with this. Both have its own merits. But, I personally advocate a feedback based system and here are the reasons why:

A feedback ensures a developmental culture

When a manager gives feedback to his team member on achievements and improvement area, the objective is to develop the person. A feedback ensures that team member is aware of his good work and what can be done better. In case of non-performance, the team member is guided well so that he can get appropriate time to improve himself. It is not limited to the performance of a team member but also talks about behavioural and cultural aspects. Hence, it is a developmental tool which encourages team members to do better every day.

A manager should be developmental. It is manager’s responsibility to ensure that team members are growing and feedback gives this opportunity to align people towards their growth.

Team member takes it positively as it not directly linked with salary increment

I have observed that when a manager gives feedback which is linked with the performance rating of a team member, team member becomes defensive. He feels that it will impact his salary increment or may be career growth in the organisation. At that point of time, as a human nature, he defends the feedback and become reluctant to accept. As he doesn’t accept the shortcoming, he doesn’t work toward improvement. This is a setback in developing team members in an organisation. Taking feedback is the first step to develop self. With performance rating, we hurt this step and unknowingly stops organisation growth.

Once, team member knows that the feedback is not linked with his salary increment directly, he becomes more receptive towards it and that is what exactly required to develop a person.

It is continuous and not defined in time frame

As opposed to a performance rating, feedback is continuous. It can be given at any point of time. I would say, it should be given as and when required. If a team member does well, do appreciate and let him know about the good work he has done. Similarly, in case something went wrong, do talk about it too. It may be possible that team member is not aware of certain things or need a training to accomplish his tasks.

It may also be possible that team member is not capable of executing assigned tasks. In that, at least you know where is the problem and how to deal with it.

It treats people with dignity

A performance rating is an outcome wherein feedback is a continuous process. During feedback, the objective is to develop the person and not to tell the outcome. Even in the case of a non-performance, he gets the timely feedback and if there is no substantial improvement next step can be taken. By giving feedback on time, you have treated the person with dignity and ensured that he is aware of his improvement areas.

Well, as I said in beginning, both systems have their own pro and cons. There are many organisations, which use a rating based performance management system and are successful. My vote is to the feedback based performance management system as it is more aligned towards the growth of people in an organisation.