Improving Performance Management

Regular performance management plays an important role in accomplishing the main strategic objectives of the company or organization. Such evaluation should be conducted regularly, ending with the creation of a review.

Regular performance management plays an important role in accomplishing the main strategic objectives of the company or organization. Such evaluation should be conducted regularly, ending with the creation of a review.

Only a continuous cycle of performance management can improve business processes in your company, as well as increase the level of motivation and engagement of employees.

The key conditions for evaluating a company’s performance are fairness and transparency. This means that if your performance management strategy does not meet these criteria, you need to change it.

If you own a company, investing in performance management ensures that your employees are involved in achieving the company’s goals and clearly understand the company’s mission.

What Is Performance Management

Performance management is one of the most effective ways to improve the work of everyone in a company, which should be on an ongoing basis. Essentially, it’s a comprehensive framework that includes continuous, real-time performance monitoring through a variety of technical means, including digital tools.

What problems can be solved with a continuous performance management system? Below are just a few of them to consider:

  • Replacing performance reviews once a year with a continuous measurement system using real-time tracking tools;
  • The ability to identify successful leaders and talented professionals within your team, rather than having to look for them outside the company or having to outsource work tasks;
  • Increasing the level of productivity and quality of management when using the OKRs (Objectives and Key Results) system;
  • Creation of a system of continuous feedback;
  • Training sessions as one of the priorities of the corporate culture, in which the managers of the company’s departments act as coaches;
  • Creation of an effective way to measure success for each of the company’s work goals.

In this way, the company’s management can monitor the consistency of the work goals of each employee and the team as a whole with the main strategic goals of the company.

Features of a Quality Performance Management System

The performance management system and its evaluation should be characterized by the following factors:

  • Regularity. It’s not enough to simply monitor the efficiency of employees’ work once a year and then make a report. Such a system shall represent a continuous series of cycles, each of which shall result in the achievement of a certain goal;
  • Purposefulness. The purpose must be clearly designated and understandable for all employees, from managers to employees of a particular division;
  • Measurability. After the goal is set, a manager or an HR specialist will need to determine the frequency of meetings with a certain employee, during which the work of the employee will be analyzed. Such meetings can be held monthly, quarterly, or weekly;
  • Realism. Your goals should not only be measurable but also realistic so that the employee has the opportunity to meet them within your set deadline;
  • The individuality of evaluation. It’s essential to evaluate the employee’s level of performance by his/her degree of success in achieving the individually defined goals (not by comparison with other employees).

If an individually defined goal for the employee has not been achieved, the manager should make changes to it and set a new deadline for completion.

A specific tactic must be developed to achieve each goal and ensure its achievability.

The Main Stages of Performance Management

Quality performance management must begin with the company’s leadership, as the managers or heads of departments are responsible for creating and executing performance management tactics.

Regardless of the business area and other specifics of the company, performance management is implemented in 3 main stages:

  • Goal setting. Company managers need to make a list of goals (individual and team goals), each of which should solve a certain problem, increase productivity, promote professional growth, increase motivation and employee involvement;
  • Creating quality feedback. To ensure that all goals are achieved as quickly as possible, company management should not only regularly set goals and monitor their implementation but also regularly collect feedback from employees;
  • Performance reviews. This will require compiling annual reviews, which contain detailed information on each cycle of work on the goals and the analysis of the results.

Your annual review is the next marker for evaluating the productivity of employees in the company, which should be compared with last year’s reviews so that you can properly analyze the dynamics of team performance management.

An annual review can only be as accurate as possible if it’s created on the basis of weekly, monthly, and quarterly reviews. Company managers can use ready-made templates adapted to the specifics of a particular business to create goals.

It’s important that all team members have at least a minimal understanding of what the performance management process is all about. They will then be able to use their work measurement and make a list of skills and knowledge required to improve.

Tools for Performance Management

To create a quality performance management system, evaluate it, and compile annual reviews, you will need various digital tools. They can be used to speed up the process of creating a system and make the evaluation as accurate as possible.

Web-Based Systems

The main digital tool you need to create a performance management system is data-collecting software. Depending on the stage of the performance evaluation process, the information collected is used to generate a list of goals or collect data for a review.

A web-based performance management system provides the following benefits:

  • Good application consistency across the organization;
  • High accuracy of data collection;
  • Can be applied to different elements of the performance management system.

Dedicated web-based systems automate the handling of large data sets but are not used for data analysis.

Performance Rating Scales

To maximize work evaluation and get quantitative assessments, a special rating scale can be used for the following tasks:

  • Differentiation of performance levels;
  • Visualization of the evaluation process, which, depending on specific conditions, can be numerical or relative;
  • Creation of a unified evaluation methodology for all company divisions.

If the rating scale implies the evaluation with the help of a certain number of points received by the employee for the achievement of a certain goal, it’s necessary to define the purpose of each point in advance.

Skills Training

Every manager in a company should have the 4 most important skills for successful performance evaluation:

  • Proper goal setting;
  • Development planning;
  • Performance evaluation;
  • Coaching skills.

Special trainings for managers should be part of the corporate culture.

Performance Reviews

Regular reviews are used to evaluate the success of the performance management system. These supervisory meetings between managers and employees are required to assess the extent to which goals are being met.

A review can only be effective if department heads, managers, and all employees understand its importance.

Regular Feedback

A performance management system can ensure each employee’s development only if there is real feedback, which should be a basic element of the system.

Not only managers but all employees should understand the importance of regular meetings with experts. Employees will give the most accurate reviews possible if they see the effectiveness of the feedback.

Employee Self-Assessment

In addition to conducting periodic performance reviews, the self-assessment of each employee in the company is an important element of the system. If everyone on the team can participate in the final review, it will cause all employees to have more confidence in the results.

Monitoring the Quality of Performance Reviews

Regular quality monitoring of completed evaluations is necessary to improve the quality of future performance reviews. Therefore, all managers should receive training that results in skills to identify leaders on teams and further develop them.


A performance management system is one of the useful tools to improve the effectiveness of all employees in any company. Such a system involves regular monitoring of productivity through which problems that hinder the professional growth of an employee are identified.

Based on the monitoring results, a list of goals is compiled and a review is used to control the work. This can be annual, monthly, or quarterly reviews. As you can see, this system consists of a series of continuous cycles, and each of them culminates in the achievement of a certain goal or its adjustment.