Current problems that indicate a need for competency-based performance management include the following:
1. Job performance standards and appraisal criteria are seen as unequal or unfair because:
- One group of workers must achieve at a higher level than other workers in equivalent jobs to receive a good evaluation or reward,
- Workers are graded on a “bell curve”, so that most workers are rated average or below average, regardless of the absolute level of their performance,
- Expected results are not under the workers’ control, and
- Employees have little input into the performance goals set for them.
2. Performance appraisal is seen by managers and employees as a bureaucratic “paperwork” exercise that they do not take seriously because it has little impact on employee performance or development,
3. Employees see nothing in the PMS for them performance appraisals do not address their questions about skill development or career advancement,
4. The performance management system has little impact on actual management; it does not lead managers to do their jobs better or to develop or provide feedback to their employees,
5. The performance management system does not reflect or reinforce the organization’s strategy because it fails to focus employee behavior on strategic priorities such as quality of service, and
6. Performance ratings are inflated, if 95 percent of the workforce is rated “4 (very good)” on a scale of 1 to 5, employee ratings are not of any use for promotion decisions or succession planning.