Answered – What is Employee Performance Management

Aug 3, 2023 | Employee Performance Management

2 employees having a performance management conversation

Are you looking to supercharge your organisation’s productivity and create a high-performance culture? In today’s busy and competitive world, organisations are always seeking ways to maximise their potential. One vital part of this is employee performance management. So, what is employee performance management? Let’s start with a simple explanation…

Employee performance management is a planned process that helps organisations to set clear expectations, provide feedback, evaluate performance, and recognise and reward employees. It’s all about getting the best from employees by helping them work in line with the organisations’s objectives.

In the following sections, we will explore the key elements of employee performance management, its benefits, the process involved, and the challenges faced.


The Key Elements in Answering What Is Employee Performance Management

Employee performance management consists of several key elements that work cohesively to drive performance and growth. Here are the main parts:


1. Setting clear expectations and objectives

One of the first steps in performance management is establishing clear expectations and objectives for each employee. By defining what success looks like for their role, employees can better understand how their efforts contribute to the overall objectives of the organisation. SMART (Specific, Measurable, Achievable, Relevant, Time-bound) objectives are a popular framework used to ensure clarity and focus.

2. Providing ongoing feedback and coaching

Ongoing feedback and coaching play a pivotal role in developing employees and enhancing their performance. Regular check-ins, one-on-one meetings and constructive feedback sessions provide employees with the necessary guidance and support to improve their skills and exceed expectations. Ideally, feedback should come from managers
and colleagues. The manager may collate this additional feedback, but it is crucial to obtain it to find a balanced view.

3. Conducting regular performance reviews

Also known as appraisals, performance reviews serve as a formal assessment of an employee’s accomplishments and areas for improvement. These reviews provide an opportunity to review progress against set objectives, identify strengths, and explore development areas. Fairness and objectivity are essential when conducting reviews to ensure accurate assessments.

4. Identifying and addressing performance gaps

There are two ways to think about “performance gaps”. The first that springs to mind involves employees who might be having trouble or falling short. But, that’s not the type of performance gap. Consider an employee who performs well, but has ambitions to grow. The gap here is between where the employee wants to be vs where they are now. Spotting these “performance gaps” quickly and working with the employee to fix them is a sure way to improve performance swiftly. Managers who identify areas where employees may be struggling can create personal development plans to support growth. Following up regularly ensures progress.

5. Recognising and rewarding high performers

Recognising and rewarding high performers is an integral part of employee performance management. Through things like cash rewards, promotions, or non-monetary rewards such as public recognition, organisations can motivate employees to strive for excellence. Celebrating achievements is not only gratifying for employees but also promotes a culture of continuous improvement.


Benefits of Employee Performance Management

Now we have discussed what is employee performance management, let’s discuss the benefits. When done right, performance management offers many benefits:


1. Better productivity and efficiency

When done right, a performance management process increases productivity by aligning individual efforts with organisational goals. By setting clear expectations, employees can optimise their performance and utilise their skills effectively to contribute to the overall success of the organisation.

2. More employee engagement and motivation

Engaged and motivated employees are more likely to be productive and loyal. Through ongoing feedback and coaching, employees feel valued and supported in their growth, leading to higher engagement and job satisfaction.

3. Alignment between individual and organisational goals

An effective performance management process helps to establish a clear link between individual objectives and the broader objectives of the organisation. This alignment ensures that employees’ efforts focus on activities that contribute to the strategic direction of the organisation.

4. Development of a high-performance culture

Embarking on a performance management journey fosters a culture of continuous learning and improvement. When employees see that the organisation recognises and rewards their efforts, they feel motivated to excel and seek growth opportunities.

5. Identification of training and development needs

Performance evaluations and regular feedback offer valuable insights into employees’ strengths and areas for improvement. Managers can utilise this information to identify training and development opportunities, ensuring that employees have the necessary skills to excel in their roles.


The Employee Performance Management Process

The employee performance management process consists of several interconnected steps:


1. Objective setting

The first step in performance management is setting clear and measurable objectives. As a manager, I have found that involving employees in the objective-setting process empowers them and promotes ownership of their targets. SMART objectives can provide a framework for effective objective setting.

2. Continuous feedback and coaching

Ongoing feedback and coaching are essential for performance improvement. Regular check-ins and constructive feedback sessions allow employees to learn, grow, and adjust their performance. Coaching techniques such as active listening and open-ended questions help facilitate this process.

3. Performance reviews

Performance reviews provide a formal assessment of an employee’s achievements and areas for improvement. HR managers should conduct evaluations objectively, reviewing performance against set objectives and providing actionable feedback. It’s important to promote fairness and avoid biases in evaluation processes.

4. Personal development plans

In cases where performance gaps exist, managers should create personal development plans. These plans outline specific actions, timelines, and support mechanisms to guide employees towards improvement. Regular progress monitoring is key to ensuring successful outcomes.

5. Recognition and rewards

Recognising and rewarding high performers is a vital part of the performance management process. Whether through bonuses, promotions, or public acknowledgement, rewarding employees for their achievements reinforces a culture of excellence.


Challenges and Best Practices in Employee Performance Management

While employee performance management is essential for organisational success, it also presents challenges for managers. Here are some common challenges and best practices to overcome them:


1. Addressing bias and fairness in evaluations

Biases can unintentionally influence the evaluation process. To ensure fairness, it is crucial to provide training to managers, define evaluation criteria clearly, and adopt a centralised evaluation process. Don’t forget the peer-to-peer feedback note from earlier. Feedback should come from many angles to ensure you are getting the full picture. This helps to promote consistency and reduces the impact of biases.

2. Ensuring consistency across the organisation

Consistency in performance management practices is vital to maintain transparency and fairness. HR managers should establish clear guidelines, provide training, and regularly review and update processes to ensure consistency throughout the organisation.

3. Overcoming resistance to change

Introducing performance management initiatives may sometimes face resistance from employees or managers who are resistant to change. Effective communication and emphasising the benefits of performance management, such as personal and professional growth opportunities, can help overcome this resistance.

4. Utilising technology for performance management optimisation

Technology can greatly enhance the efficiency and effectiveness of performance management processes. Utilising performance management software allows HR managers to automate administrative tasks, track progress, and generate data-driven insights for decision-making.

5. Emphasising continuous learning and development

Performance management is an ongoing process rather than a one-time occurrence. HR managers should promote a culture of continuous learning and development, encouraging employees to seek opportunities for growth and skill enhancement.



Hopefully, we have answered your question “What is employee performance management”. Remember this is just the basics, but in conclusion, employee performance management is a critical practice that drives organisational success.

So, by:

  • Setting clear expectations
  • Providing ongoing feedback and coaching
  • Conducting regular evaluations
  • Addressing performance gaps, and
  • Recognising high performers

Organisations of all sizes can tap into their full potential.

As an experienced Manager, I have witnessed first-hand the positive impact of effective performance management practices. It leads to improved productivity, enhanced employee engagement, alignment of goals, the development of a high-performance culture and the identification of training needs.

If you want to take your performance management to the next level, why not get a demo of PerformanceHub today.


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