Efficient Performance Management System: Key Elements


Performance management in some form exists in any organization. The simplest form of it is addressing performance issues as they arise, but why not create an environment instead that would motivate employees to do outstanding work? The intention to monitor employees’ performance on a regular basis and identify possible issues at early stages is why performance appraisals, performance reviews and performance improvement processes are implemented.

Performance appraisal is a procedure that is rarely pleasant for both employees and managers, because no one wants to be evaluated and compared to anyone else or to themselves in the past: who would like to hear that they’ve worked worse than in the previous quarter? No one likes to deliver bad news about the difference between the expected and the actual performance, either.

The conventional performance appraisal process, where managers write their opinions on their employees’ performance, actually create more damage than benefits. In it, managers are uncomfortable with their role of a judge, employees experience decrease of workplace trust, and the result is hardly accurate as it is based on what the manager can remember. What’s more, the fact that pay raises are tied to the evaluation makes both sides even more uncomfortable.

There are ways to organize performance management so that it brings positive results without damaging work environment, makes employees more willing to participate, and helps actively engage everyone. This process includes specific elements, and below we’ll discuss how to use them to build an efficient performance management process.

Set performance goals

This applies to individual team members’ goals and expected team results in general. Review the team’s work scope and analyze what time and effort this work would take. Receive feedback from your team members regarding their productivity levels and possible impact factors that can affect performance. Make sure your goals are measurable – otherwise it would be hard to track their achievement.

The following can help you come up with more realistic performance goals:

  • Description of job purposes, duties, and responsibilities;
  • Previous data on how much time and effort regular work tasks tend to take;
  • Feedback from your employees.

Review your current performance management system

Most likely, some of performance management measures are already taken in your organization. For instance, you might have implemented a piece of time tracking software to collect data on employees’ time use behaviors, task progress and project outcomes. Now you need to analyze your tech stack and see how the tools are aligned with the performance goals you’ve defined previously.

Here are some questions you may want to ask when analyzing the currently existing systems:

  • Does the system provide a consistent performance appraisal and improvement flow?
  • Are the measures provided by the system realistic? How do they align with the new goals and desired figures?
  • Is the system specific enough? Does it provide exact description of steps taken in each case?
  • Is the system flexible? Does it allow any changes and modifications if necessary?

Define a clear plan for performance monitoring and improvement

Maintaining a log of performance changes allows to make performance appraisal more fact-backed and accurate. That’s why this practice is worth adopting if you don’t have it yet. Log both positive and negative events so that you have the full picture at the end of a performance evaluation period.

As you can receive any results at the end of the period, you want to have a plan for any case. Develop and document it clearly, and inform your employees about performance improvement procedure in the organization. Train your employees on it if necessary, and make sure the process description is easily accessible. Also, take steps provided in it as soon as you notice any performance issues that need to be addressed.

Provide and receive regular feedback

The importance of feedback cannot be overestimated in any area of activity. In performance management, it is one of the main factors that affect the end result and define the efficiency of taken measures. Depending on the nature of positions and duties, the feedback can be limited to the communication between the manager and the employee or include customers’ reviews and other managers’ observations.

The positive effects of a regular feedback are not limited to a more accurate performance evaluation and more realistic expectations. It also creates a workplace culture where employees feel comfortable asking for help and bringing up issues as early as possible. This is an important part of performance management, as it prevents employees from attempting to self-solve the problems without informing their managers or team members.

Focus on positive reinforcement

Negativity related to performance appraisal processes is the main reason why they tend to be disliked and avoided by all participants. And while it’s hardly possible to entirely remove negative aspects from the performance appraisal and management procedure, focusing on positive events is more efficient than using a penalizing system that makes everyone feel vulnerable.

What’s also important here is using the power of recognition. Depending on the company’s resources and practices, it can take the form of bonuses, pay raises, non-financial rewards, thank-you notes, or verbal conversations. Providing career opportunities is essential for long-term performance improvement: this is one of the biggest motivators for doing outstanding work.


We’ve used to assume that performance management is an inevitably painful but necessary process. However, there are ways to take negative experience out of it and increase its positive effects. Clarity, structure, and focus on recognition is what helps build a performance management process that will bring tangible results and create a productive workplace environment.

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