During a conversation with friends about workers who don't perform and how to deal with those employees, one had pointed out that performance reviews are the solution to dealing with these situations. While I agree with the notion of using HR-tools to track and evaluate employees their performance, I do have to add that only using performance reviews in an organization isn't enough. Especially if the tools aren't being applied in the proper manner.
Performance reviews are usually once or twice a year; depending on the company; when the manager sets the goals and expectations and checks if the individuals interests align with those of the organization. Also will the performance of the employees be discussed. Did the worker achieve the set goals, did he/she perform better than expected or not and why was that? One might indeed think "well that's an honest and objective way to assess an employees performance", but herein lies a factor of risks and reasons that might negatively affect the company.
One reason is that once or twice a year isn't enough to evaluate the subordinate and isn't enough to steer, correct or coach the employee. Another reason is that managers may not follow the proper steps; like not planning or setting goals with subordinates; and then when the performance review is taking place, the manager has nothing to indicate on what grounds he/she is evaluating the employees functioning. Also the manner in which the performance review is taking is place could have implications. Does the manager ask the right questions, is he/she only focusing on the (not) achieved targets and is the manager open for feedback from the subordinate?
The risks that a company may run into, when not taking the proper steps and not applying these moments in the necessary ways, are low performance, not motivated employees, no room for improvement or growth, keeping employees who don't perform or aren't suitable for the work longer in a department or company, which in itself may also result in losses.
In conclusion HR-tools are not always an exact science, because you're dealing with the human factor. The tools should be applied as prescribed, but also be adjusted to the organization's needs.