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Performance Management

Reviewed by Sweta | Updated on Jan 29, 2021



Performance management refers to a tool that corporate managers use to help management to define expectations, roles, and evaluate performance against the set goals. The aim is to have an environment conducive to enable employees to perform in an efficient manner.

The management should define the expectations, role, and draw a career progress chart to align the role along with the vision and mission of the organisation.

Understanding Performance Management

An organisation draws up performance management programs using tools to create goals, milestones and objectives. The organisation also sets performance standards for all employees to achieve the goals and objectives.

The management develops a performance evaluation process to monitor and measure the performance of employees. Performance evaluation consists of mid-year and annual performance reviews.

Managers use different performance measurement methods to manage workflow, take decisions, and improve performance to help employees achieve their performance objectives. The performance management system facilitates the organisation to reach its objectives while enabling its employees' performance.

Performance management fosters an environment of accountability. A performance management system facilitates regular meetings with employees, healthy communication, and transparency in employee career development.

The system enables continuous monitoring of employees' performance throughout the year, over a period of time, and not just one or two random tasks of the employees.

An organisation's management can use any of the performance management software packages that exist in the market. An organisation can customise the ready-to-use templates and software packages as per the needs and goals of the organisation.

However, any software package must help in setting performance goals, align organisational goals with employees, and career development plans.


A performance management system helps in treating employees as part of an organisation. It brings managers (mid-level and senior management) together with employees to develop performance goals, discuss their performance along with the organisation's goals.

It enables meeting with employees and discussions on what is going right, progress, and the way forward in meeting their goals. An efficient performance management system should facilitate continuous engagement between employees and the organisation.

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