Performance Management

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What is Performance Management?

Wondering what Performance management is? Performance Management is a vital process that has been gaining traction from many organizations over the past couple of years. CEOs and managers are constantly trying to figure out how to improve their organizational culture in a proactive manner that benefits themselves as well as their employees. Which brings us to the billion-dollar question: What is Performance Management?


In simple terms, Performance Management is a continuous process involving measuring employee performance and constructive feedback between managers and employees. This process can result in higher levels of productivity and organizational alignment in the workplace and drive overall growth in the organization.




Definition of Performance Management

Performance management is all about being regular with performance checks and guiding your employees on the right track to success for themselves as well as the organization.

Michael Armstrong, author of the best seller ‘Armstrong’s Handbook of Performance Management, gives us the definition of Employee Performance Management as


“the con­tin­u­ous process of improv­ing per­for­mance by set­ting indi­vid­ual and team goals which are aligned to the strate­gic goals of the organ­i­sa­tion, plan­ning per­for­mance to achieve the goals, review­ing and assess­ing progress, and devel­op­ing the knowl­edge, skills, and abil­i­ties of peo­ple.”

Thus, organizations need such an exemplary employee review management system to fast-track overall company growth and scale higher in their industry.




Why is performance management important?

Performance management is important because it helps employees realize their potential and work towards growing and expanding their career paths within an organization.


It elevates employee pulse, boosts morale in the workplace, and enables managers to look at the performance levels of an employee from different perspectives.


Think of it as an athlete training to increase their speed on the track. Their coach wouldn’t measure their running speed only once in a blue moon.


They would consistently measure the athlete’s timings at regular intervals to better understand how far they can go. This finally helps the athlete realize their potential, work harder to achieve their goals, and aim higher in their career.


Similarly, performance management is more frequent and focuses on helping employees realize that they can achieve higher than they believe.


It ensures that both employees and managers are on the same page and enhances communication between the two.

Employees become more open to constructive feedback, and managers gain deeper insights into each employee’s potential and work ethics.




Performance Management vs. Performance Appraisals

Most organizations often confuse performance management and appraisals to be the same thing and often find it difficult to tell apart one from the other. So, let’s dive into the differences between performance management and performance appraisals.


Performance appraisals are a formal, annual review of an employee’s overall performance and contribution to the company.


Performance management, on the other hand, is a more continuous & ongoing process that focuses on the employee’s performance and goals as well as how well it aligns with the company’s mission and vision. Performance appraisals are essentially just one part of the entire performance management process.


The performance management process occurs multiple times a year, say on a quarterly basis. However, performance appraisals are less frequent and occur maximum twice in a given year.


The former focuses on continuous growth, while the latter focuses solely on feedback.


While performance management requires strategic planning and execution, performance appraisals follow an operational process that doesn’t require extensive planning.

Performance appraisals are rigid in nature, whereas performance management is more flexible and considers employees’ inputs.

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What is the performance management process?


Many companies yearn to have an established employee evaluation system but still wonder what the performance management process is.


Let’s dive deeper to answer them and provide more clarity on the topic.


It is a 4-step, year-long process that covers all the aspects needed to measure an employee’s performance levels, guide them wherever necessary, and align their goals with that of the company.



Define each employee’s goals and objectives based on their role so that they align with the company’s mission & vision, develop a work plan that outlines the tasks to be completed, and set forth the standards to be used to measure their performance.


Monitor & Coach

During this phase, managers will monitor how well the employees execute their tasks, follow their work plans, and deliver results.


They will communicate with employees regularly to share feedback, review & modify their workflows if necessary, and guide them on how to overcome any roadblocks or bottlenecks.



Managers and peers will rate the employee and provide constructive feedback based on their performance and behavior in the organization on a quarterly basis.


This is usually done through 360° assessments in order to receive insights across various competencies. This phase is also where the annual performance appraisals take place.



Finally, recognize and reward those employees who have performed exceptionally well. This boosts employee engagement and instills higher levels of motivation in the workplace.




How to Improve the Performance Management Process


Improving your employee review process requires a lot of diligent planning and the right execution. So here are 3 ways you can bolster your 360° performance review process to be nothing short of the best!


Collect organization-wide feedback

Gauge your managers and employees on what can be improved upon during the employee performance review process.


Receiving company-wide feedback can help you gain clarity on how to improve the overall process.


Maintain consistency

Ensure that your process includes frequent interactions between managers and employees where feedback is shared, and concerns are resolved, thus leading to an eventual improvement in company vitals.


Get the right tools

Don’t rely on the traditional pen-and-paper method for feedback collection. Use the right technology that can help to make your performance management process more streamlined and eliminate redundancies.




How to automate performance management?


If your employee evaluation process has well-defined goals and objectives, it would be beneficial to automate performance management in your organization.


Utilizing the best 360-degree evaluation software can greatly help managers streamline their tasks and power through feedback collection.  Not to mention, it will ease the management of the process.


Analysis of the data received can be carried out by smart & sophisticated algorithms that would give you all the insights you need, along with auto-generated reports that are updated in real-time.


Which Performance Management Processes Cannot Be Automated?


The extensive conversations between managers and employees are one aspect of the performance management process that cannot be automated.


Although technology plays an important role in the effective management of the process, complex discussions with managers are not suitable for automation.


The best results are brought forth by communicating in person, backed up by the extensive data analysis received from HR performance management software.

Connect with your employees. Machines have limitations, you don’t!




Performance Management Best Practices


Gauge your managers and employees on what can be improved upon during the employee performance review process. Receiving company-wide feedback can help you gain clarity on how to improve the overall process.


#1 Plan extensively

Create a well-designed framework for your employee performance management system that outlines every aspect of the process from A-Z.


Defining your goals and objectives from the get-go helps you organize the system effectively and flow through the entire process in a breeze.


#2 Communicate openly

Establish a culture of open and effective communication between employees and managers.


Providing constructive feedback is one of the most effective ways to help an employee improve their performance and soar higher in the organization.


#3 Monitor continuously

Your performance management system brings out the best outcomes through continuous processes. Take the time to track your employees’ progress, measure how well they align with the organization, and coach them to reach their best potential.


#4 Gather feedback from multiple sources

Constructive feedback doesn’t just have to be from managers. Collect feedback and inputs from other stakeholders in the organization to get a 360° view of the employee’s performance and behavior. This is where 360° feedback & assessments play a huge role.




5 Benefits of Performance Management


How can your organization benefit from a stellar employee evaluation system? Here are 5 benefits of performance management that can cause a ripple of enthusiasm in the workplace.


Improves organizational performance

What is Performance ManagementA well-designed performance management system can majorly impact the entire organization for the better.


Managers and employees will be on the same page, and everyone will be aligned in terms of personal and organizational goals, which can fast-track company growth.


Establishes a healthy work culture

What is Performance ManagementContinuous and transparent interactions between managers and employees create a positive environment in the workplace. This great stimulus drives passion, dedication, and integrity across the organization.


Boosts employee engagement

What is Performance ManagementThe end result of measuring organizational performance is that employees feel more motivated and invested in their roles at the workplace. Once they understand that their hard work is well-appreciated, it will motivate them to dedicate more to the organization, leading to higher levels of productivity.


Identifies training opportunities

With continuous feedback and evaluations, managers can identify where employees need to refine their skills and take up more responsibility. This would lead to more learning opportunities to expand their overall organizational capabilities.


Increases employee retention

A performance management program that is executed well can increase employee retention in the workplace. Managers who guide and support their employees effectively and help them realize their true potential will create loyal employees who are true brand advocates.

How to choose a Performance Management platform?

Once your employee review management workflow is planned and ready for execution, the next step would be to carry out all the processes according to the plan. This is where an online employee evaluation platform comes into play.

Choosing the right performance management platform can help streamline workflows and increase action efficiency.

Continuous feedback collection

Your platform should have all the capabilities needed to collect detailed feedback from managers, employees, and peers. Schedule your assessments at the right time and gather all the data you need in one single platform.


Analyze and gain deeper insights

No performance management software is complete without a robust reporting module. Once feedback is collected, managers should be able to monitor and analyze employee performance based on the data collected, segment the data efficiently, and customize as per their requirements.


Integrate and automate

Your 360-degree feedback software should be able to connect with other useful platforms to automate certain actions and share data seamlessly. Centralize all activity in one platform while connecting with a plethora of others.


Key features of Performance Management Tools

Here are the key features that any employee review management software should have in its offering portfolio. SurveySparrow’s employee performance management software comes in handy with all the essential features you need for measuring organizational performance.


Increases employee retention

The performance management software you choose must provide the capability of carrying out 360° feedback assessments. SurveySparrow’s 360° feedback & evaluation software can help managers and employees get a wide-angle view of an employee’s performance and help them gain a deeper perspective across various competencies.

Seamless Invitation Capabilities

Your 360° feedback platform should have the ability to invite employees to participate in employee evaluation assessments.

For managers, reportees, peers, or even self-evaluation, SurveySparrow’s 360° employee review management software lets you invite all the relevant stakeholders through CSV imports or add them manually. The power of Admin lies in your hands!

Reports & Analytics

Once all the feedback is collected, the next step is analyzing all the data collected and capturing key insights. An effective performance management tool should be well-equipped with real-time reports, making it easier for managers to identify an employee’s strengths, areas of improvement, and blind spots.


With SurveySparrow’s in-built 360° reporting module, receive auto-generated, custom reports, carry out an in-depth analysis of employee performance, and add comments for personal development.

Efficient Assessment Tracking

Your employee evaluation software would be ideal with an assessment tracking system. Using SurveySparrow’s performance management software, track the progress of 360° assessments based on the status of completion, evaluations, and report availability. Send out reminder emails to those who haven’t completed the evaluation or approved the reports, and stay on top of every evaluation hassle-free.



Getting started with Performance Management Software


On the lookout for evaluating your employees? Enhance your corporate performance management system using SurveySparrow’s 360° assessment software to collect detailed feedback in your organization.


It comes well-equipped with an in-built reporting module, a ready-to-use assessment template, customizable reports, roles, and so much more. Ease the process and elevate your employee evaluation to a whole new level.


Suited for every business with all the features you’ll need and more. Have your pick from our flexible pricing plans to suit your intent, contact our round-the-clock support team for any assistance, and empower your performance management system!

Collect constructive feedback, analyze data, and measure employee performance the right way.
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Performance Management FAQs


What is the objective of performance management?

Performance management aims to identify an employee’s strengths, blind spots, and areas of improvement. This will result in their overall professional development and help them realize their full potential at the organization.


What is the difference between performance management and appraisals?

Performance management is a process, and appraisals are just a part of it. Appraisals are an annual review of the employee’s performance, whereas performance management is a continuous process of monitoring employee performance and providing constructive feedback.


What are the components of performance management?

Performance management consists of planning, monitoring & coaching, performance reviews, and rewards.

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