Performance management is a tool that helps managers monitor and evaluate employees’ work. The goal is to ensure that employees are performing efficiently throughout a particular period of time.

1. Performance management is intended to help people perform to the best of their abilities in alignment with the organization’s goals.

2. It views individuals in the context of the broader workplace system and encourages their input in goal-setting.

3. Performance management focuses on accountability and transparency and fosters a clear understanding of expectations.

4. Rather than just annual performance reviews, performance management provides ongoing feedback to employees.


1. Aligning employees’ activities with the company’s mission and goals: Each employee should understand how their job contributes to the company’s overall goals.

2. Developing specific job-performance outcomes: Through performance management, employees should understand: What goods or services does my job produce? What procedures does my job entail? What effect should my work have on the company? How should I interact with clients, colleagues, and supervisors?

3. Creating measurable performance-based expectations: Employees should have the opportunity to give input into how success is measured.

4. Defining job-development plans: Employees should have a say in what types of new things they learn and how they can use that knowledge to the company’s benefit.


The performance management process or cycle is a series of five key steps. These steps are imperative, regardless of how often you review employee performance.

1. Planning
This stage entails setting employees’ goals and communicating these goals with them. While these goals should be disclosed in the job description to attract quality candidates, they should be communicated once again when the candidate becomes a new hire.

2. Monitoring
In this phase, managers are required to monitor the employees performance on the goal. This is where continuous performance management comes into the picture.

3. Developing
This phase includes using the data obtained during the monitoring phase to improve the performance of employees. It may require suggesting refresher courses, providing an assignment that helps them improve their knowledge and performance on the job, or altering the course of employee development to enhance performance or sustain excellence.

4. Rating
Each employees performance must be rated periodically and then at the time of the performance appraisal. Ratings are essential to identify the state of employee performance and implement changes accordingly. Both peers and managers can provide these ratings for 360-degree feedback.

5. Rewarding
Recognizing and rewarding good performance is essential to the performance management process, You can do this with a simple thank you, social recognition, or a full-scale employee rewards program that regularly recognizes and rewards excellent performance in the organization.