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Performance Management

In a business organisation, an employee’s performance and potential are both important. However, sometimes the two are linked when they shouldn’t be. The downside of linking the two is that you risk promoting an employee who isn’t ambitious or your ambitious employees are overlooked and choose to work elsewhere to your detriment and the benefit of your competitors. The solution? Put a solid performance management policy in place.

What is employee performance management? 

Employee performance management is a process for establishing a shared understanding between employer and employee about what’s to be achieved at an organisation level. It isn’t about pushing employees to work harder or be more productive, it’s more about aligning an organisation’s business objectives with the employees’ agreed measures, skills, competency requirements, development plans and the delivery of results. Along with improving employee engagement, the benefits of implementing a performance management policy include:

  • Aligning employees’ job description and tasks with the organisation’s key objectives
  • Determining relevant goals and areas of focus for training and development
  • Defining and identifying employee performance expectations  
  • Greater workplace autonomy and less micro-management
  • Fewer misunderstandings and less confusion
  • Improved workplace productivity.

Additionally, performance management programs make administrative actions fairer and ensure compliance with legislative requirements which is beneficial for all organisations. However, benefits like these (and many more) can only be achieved with a well-defined and properly implemented performance management process.

Elements of an Effective Performance Management System

Performance management systems can be widely varied, though most will resemble each other in that they feature the following key stages.

Stage 1: Planning Stage

This is a stage that many may feel inclined to rush through, or skip over altogether, in the hopes of seeing results sooner. Those who do this are usually the same people who feel frustrated by a lack of results in later stages.

It is critical that business owner, human resource managers, and other management ensure they have properly planned their performance management. This starts with setting goals that align with and work toward the objectives of the business. 

Stage 2: Monitoring Stage

Once goals and objectives have been set, it is time to determine how what metrics will be used to measure progress toward these goals. These may be KPIs, employee engagement statistics, or some other metric. It’s best to use quantitative and qualitative metrics to assess progress toward your goals, as well as to identify hurdles that need addressing. Employee interviews, surveys, performance data, etc are all valid methods of monitoring your plan.

Stage 3: Reviewing Stage

Have a plan established for how you will review the results of your monitoring. What are you looking for? Where are you hoping to find it? What is the process for learning more about insights as they arise? Depending on how you collected your data and what kinds of data you are working with, there are many options available to you. If you need help deciding how to best review performance, one of our performance management specialists can assist you with your plan.

Stage 4: Rating Stage

It is time to take what you’ve learned from your review and benchmark it against the goals of your performance management system. You should provide feedback to staff based on the insights gleaned thus far, decide what should be done about employees who did not achieve their goals, and reward those who did or went above and beyond.


Performance management should never be treated as a one and done business activity. It’s a process, and one that sees best results when in constant effect. Now that you’ve rated and rewarded employees, it’s time to learn from and improve the system as you prepare to repeat it.

Do you want help with your Performance Management?

Small to medium-sized business organisations which don’t have an internal HR department will find it beneficial to use Akyra’s human resources outsourcing services. As experienced HR professionals, we can help you create a performance management policy that aligns your organisation’s business objectives with your employees’ skills and competency requirements, agreed delivery of results and development plans.

To organise your free consultation with one of our experienced human resources professionals, complete the form below and we’ll be in touch as soon as we can.

Free 30 Minute Consultation

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