What is Performance Management and Why Should We Use It?

Performance Management focuses on the performance of an organisation, a department or employee to meet the objectives of the organisation.

Performance Management links the employee’s behaviour to their results and can thus be used to increase productivity and profitability of an organisation by all employees reconciling their personal goals with the organisational goals.

Armstrong and Baron (1998) defined Performance Management as a “strategic and integrated approach to increase the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”

All good performance management systems must have:

  • Realistic objectives which the employee is expected to achieve
  • Competencies or behaviours which show the way in which employees work towards their objectives
  • Personal development – the development employees need in order to achieve objectives and realise their potential

There should be regular conversations, both informal and formal, between the manager and the employee to monitor how the employee is performing, how the employee is doing in terms of objectives and competencies, any areas to work on and any concerns about performance.

At the end of the appraisal year there should be a formal annual appraisal review where the work of the year is discussed and feedback given.

Ashworth Black have had years of experience in designing and implementing successful performance management systems for organisations in different sectors, as well as training managers to develop the skills to use them. These systems are tailored specifically to meet the needs and culture of the organisation and whether or not the system is linked to pay.

Give our Pay and Reward Consultants a call on 01506 828767 to discuss the support we can give you to enhance the performance of your organisation through the design of a performance management system to increase employee engagement levels and company profitability.