What is Performance Management System?

The performance management system is the systematic approach to measuring the performance of employees. It is a process through which the organization aligns its mission, goals, and objectives with available resources (e.g. Manpower, material, etc), systems, and set the priorities.

The execution administration framework is a constant procedure of characterizing and conveying the activity parts and duties, execution desires, goals, and setting their needs between the boss (administrator) and subordinates (workers). It incorporates association, office, and representative shared objectives and targets which are lined up with frameworks and assets. It is the channel of providing clarity about goals and also improving the business processes through various methods and mechanisms.

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The competency, skills, and knowledge gaps are also identified through this process which can be improved by providing guidance, training, coaching, and mentoring to employees or teams at different levels and designations. It optimizes the results through a roper channel and process which reduces the conflicts and grievances among teams or employees. Because each individual is clear about the expectations from his/ her role and puts their efforts to meet performance standards.

This process can be applied to a single department or to the whole organization.  It aims to continuously monitor and measure the performance standards against the desired goals and objectives.

Purpose of Implementing Performance Management System

Managing employee performance is the key objective of establishing a systematic Performance Management system in an organization. These process servers’ six main purposes in the company:

  1. Strategic 

A performance management system is a tool that should be aligned with overall organization goals followed by department goals and individual goals. In other words, the organizational strategic goals should be linked with each activity performed by every department or employee.

  1. Administrative

The performance management system is also set as the deciding factor for employee promotion, demotion, salary increment, transfer, and terminations. It enables to identify the performers, non-performers, or underperformer employees in an organization. It merits the competency and skill level of employees. Hence, it clearly defines the administrative role as well and supports the management decisions.

  1. Communication

It is an effective communication channel to inform employees about their goals, job responsibilities, key deliverables, and performance standards. Further, it is also a structured method to indicate the key areas of improvement required by the employee in order to improvise his performance. In other words, it provides the platform to learn and train on skills, and knowledge for better performance and results.

  1. Developmental

It is the structured method of communicating positive feedback, improvement areas, and development plans. The manager can use various methods like training, mentoring, coaching, etc., and their team members perform better.

  1. Organizational Maintenance

The performance management system is the yardstick for measuring employee, department, and organization achievements and evaluating the performance gaps through various tools and techniques. Hence, it maintains the health of the organization and its performance standards.

  1. Documentation

The performance management reviews, feedback, and forms should be documented and maintained periodically by every organization. It would enable them to look forward, set new targets, design developmental needs, design training and learning programs, and career progression of employees and for the department. Hence, it helps in driving the organizational needs to desirable objectives.

Benefits of Performance Management​

In today’s global environment where the market is evolving at a very fast pace, it is important for an organization to understand the benefits of performance management. Therefore, managing employee performance is the ultimate need of an organization. The employees are considered an asset by the organization. The performance management  system serves various benefits to the organization, which are as follows:

  1. It supports providing data to find the skills and knowledge gaps of employees in order to improvise them through training, coaching, and mentoring systems.
  1. It motivates employees to take on new challenges and innovate through the structure process.
  1. It provides new opportunities to employees for their growth and development in their professional careers
  1. It defuses the grievances and conflicts among team members through a proper performance evaluation system.
  1. It assesses the employee’s performance fairly and accurately against the performance targets and standards.
  1. Employees would enable to provide better results because of clarity on their performance targets.
  1. Performance management system provides the platform to discuss, develop and design the individual and department goals through discussion among manager and their subordinates.
  1. The underperformer can be identified through performance reviews and can raise their skills levels objectively. It quantifies the learning needs through individual development plans or performance improvement plans as well.

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1. Performance Management       &    2.  What is Performance Appraisal