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 Cycle*

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.

The term “performance appraisal” refers to the regular review of an employee’s job performance and overall contribution to a company. Also known as an annual review, employee appraisal, performance review or evaluation, a performance appraisal evaluates an employee’s skills, achievements, and growth, or lack thereof.

Companies use performance appraisals to give employees big-picture feedback on their work and to justify pay increases and bonuses. They can be conducted at any given time but tend to be annual, semiannual, or quarterly.

The Purpose of Performance Appraisals?
Performance appraisals are usually designed by human resources (HR) departments as a way for employees to develop in their careers. They provide individuals with feedback on their job performance, ensuring that employees are managing and meeting the goals expected of them and giving them guidance on how to reach those goals if they fall short.

Performance appraisals also help employees and their managers create a plan for employee development through additional training and increased responsibilities, as well as to identify ways that the employee can improve and move forward in their career.

Types of Performance Appraisals

Most performance appraisals are top-down, meaning that supervisors evaluate their staff with no input from the subject. But there are other types:

Self-assessment: Individuals rate their job performance and behavior.

Peer assessment: An individual’s work group or co-workers rate their performance.

360-degree feedback assessment: Includes input from an individual, supervisor, and peers.

Negotiated appraisal: This newer trend utilizes a mediator and attempts to moderate the adversarial nature of performance evaluations by allowing the subject to present first. It also focuses on what the individual is doing right before any criticism is given. This structure tends to be useful during conflicts between subordinates and supervisors.

Some Criticisms of Performance Appraisals?

1. Performance appraisals are designed to motivate employees to reach and/or exceed their goals. But they do come with a lot of criticism.

2. Distrust of the appraisal can lead to issues between subordinates and supervisors or a situation in which employees merely tailor their input to please their employer.

3. Performance appraisals can lead to the adoption of unreasonable goals that demoralize workers or incentivize them to engage in unethical practices.

4. Some labor experts believe that the use of performance appraisals has led to lower use of merit- and performance-based compensation.

5. Performance appraisals may lead to unfair evaluations in which employees are judged not by their accomplishments but by their likability.

Benefits of a Performance Appraisal?

1. When executed correctly, performance appraisals can pay off significantly. Among other things, they are capable of boosting employee morale and engagement, clarifying expectations, helping to get the best out of staff, and incentivizing hard work and dedication.

2. It’s not just companies that benefit, either. Open lines of communication make it easier for employees to raise concerns, express themselves, find their right path, feel appreciated, and be rewarded when they do a good job.