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What is Performance Management?

Performance management identifies the work that individuals need to do to be effective and contribute to the mission and objectives of an organization. The process should also encourage, measure, and evaluate job performance so that improvements can be made. Finally, it seeks to communicate, improve, and reward performance. Performance management is a series of activities designed to ensure that the organization gets the performance it needs from its employees. The performance management process starts by identifying the goals an organization should accomplish to remain competitive and profitable. Managers then identify how they and their employees can support these objectives by successfully completing work. Of course, the sum of the work completed in all jobs should advance the strategic plan. Performance appraisal is the process of determining how well employees do their jobs relative to a standard and communicating that information to them. This tool is a key part of performance management because it helps employees improve their job performance. Successful performance management allows managers to prepare employees for work by focusing on the most important components of their jobs. This is often done by using evaluations to identify the level of performance and then providing feedback about how work can be improved. One report suggests that while 86% of firms actively use performance management, around 70% of those surveyed thought that the process was not positive, and 29% believed that is was unfair. A mere 3% of companies plan to alter their current approaches.