HR glossary / P / Performance management

Performance management


Performance management is a process where an organization sets goals and standards for employees, monitors their progress in achieving those goals, and provides feedback on their performance. The aim is to ensure that individual employee goals align with the organization’s objectives and that employees are meeting the expected outcomes.

Good performance management starts with clearly defined expectations for employees. For this, managers and employees regularly meet to discuss objectives, expectations, and any potential barriers to achieving them. Subsequently, the progress of employees is monitored, and the results are analyzed and compared with set standards.

Ultimately, based on the performance assessment results, managers can make decisions regarding rewards, promotions, training, or other actions aimed at improving an employee’s performance. Through consistent monitoring and communication, performance management aids in talent development motivates employees to achieve better results, and fosters a culture of continuous improvement.


What is the purpose of performance management?

The primary purpose of performance management is to ensure that employees’ activities and outputs align with the organization’s goals, thereby improving the company’s overall performance. It serves to optimize efficiency, reinforce behaviors that the organization values, and address any areas of potential improvement.

While annual performance reviews are common, many organizations are moving towards a model that encourages more frequent reviews, such as quarterly or even continuous feedback. This shift aims to address performance issues and development needs more promptly and to keep pace with changing objectives and market conditions.

Yes, performance management can significantly impact employee motivation. When effectively implemented, it helps employees understand their role in the organization, clarifies expectations, and provides clear criteria for what success looks like. Positive reinforcement and constructive feedback can enhance motivation, while unclear expectations or unfair evaluations can diminish it.


Goal alignment

Ensures that individual goals are in sync with the broader organizational objectives.

Employee development

Identifies employees' developmental needs and tailors training programs accordingly.

Decision making

Informs management decisions regarding promotions, compensations, and employment continuity.

Feedback mechanism

Provides a structured platform for offering constructive feedback and recognizing employee contributions.

Organizational growth

Drives overall organizational growth by improving individual performance and accountability.

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