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Meaning & Definition

Performance Management

Performance Management is a process of linked activities that aim to ensure goals are being met in the most efficient and productive way possible. Within organisations, performance management attempts to drive efficiency of operations by aligning internal and external activities with the company’s objectives.

Some of the cited benefits of performance management include improvements to the bottom line, including a reduction in project overruns and a reduction in costs through improved process efficiency. Employee engagement may also improve due to the realignment of goals within teams, and with the overall corporate vision.

Frequently Asked Questions (FAQ's)

  1. What is performance management process?

    Performance management is the process of creating a work environment in which employees are enabled to perform to the best of their abilities. It is a continuous process rather than a one-time event, to monitor, influence and manage the performance of an employee.

  2. What are the stages of performance management?

    According to Schneier, Beatty and Baird (1987), the key elements of a performance management system are classified into planning, managing, reviewing and rewarding phases.

  3. What are the key elements of performance management?

    According to Schneier, Beatty and Baird (1987), the key elements of a performance management system are classified into planning, managing, reviewing and rewarding phases.

  4. How do you plan a performance management?

    Planning is the first stage in the performance management cycle and thus builds the foundation for an effective process. It includes outlining plans for evaluations, setting objectives and getting commitment activities. Planning is a continuous process in performance management and should be executed with SMART goals. It helps in encouraging commitment and understanding by linking the employees' work with the organisation's goals and objectives. This phase involves communicating the vision and working towards achieving it as a whole.

  5. What are the benefits of performance management?

    Here are some benefits of the performance management process:

    • Ensuring that the employees understand the importance of their contributions to the organisational goals and objectives.
    • Promoting transparency and the sense of ‘equals’ amongst employees across the organisation.
    • Expectations are set right from Day 1 and discovering whether they possess the required skills and support for fulfilling such expectations.
    • Facilitating effective communication and engagement throughout the organisation.
  6. What are the best practices in performance management?

    Updating ..

  7. What is the difference between performance management and performance appraisal?

    Performance management is about actually helping an employee to develop and increase his performance and productivity. Performance management looks at an employee’s performance keeping in mind the present and the future. Whereas Performance appraisal evaluates the actual performance of the employee, but it does not focus on the employee’s performance productivity. Performance appraisal evaluates the employee’s performance based on how he has performed in the immediate past.

  8. What are the key features in a performance management system?

    A performance management system includes various important HR functions like goal-setting, feedback, rewards and performance review. An effective performance management system helps HR managers establish clear performance expectations through which employees can easily understand what is expected of their job.

  9. What are the basic components of performance management systems?

    All five component processes i.e planning, monitoring, developing, rating, rewarding work together and support each other, resulting in natural, effective performance management. Effective employee performance management encompasses the five key components presented above.

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