The concept of performance management has been gaining ground over the past few years, with more and more organizations recognizing its benefits. Performance management acts as a catalyst to employee and organization productivity. Without a proper performance management cycle in place, employees lose focus and managers have to contend with falling levels of performance. But what is a performance management cycle?

  1. Stages Of A Performance Management Cycle

  2. Importance Of A Performance Management Cycle

  3. Going Above And Beyond

A performance management cycle is a recurring process through which organizations measure employee performance, align employees with organizational goals and boost organizational success. It aims to improve employee efficiency and establish a positive workplace culture that fosters quality and productivity.

The terms ‘performance management’ and ‘performance appraisal’ are often used interchangeably, but there’s a subtle difference. A performance management cycle is a wider concept, comprising a variety of stages for overall employee growth. A performance appraisal cycle is a part of performance management that centers on employee evaluation over a set period of time.

Stages Of A Performance Management Cycle

While a PMS cycle in HR includes a performance appraisal cycle, it also focuses on improving employee performance in ways that yield the most favorable results for the organization. An effective performance management cycle involves four main stages:

  1. Planning

The planning stage is a collaborative effort between managers and employees. Together they identify, discuss and set performance expectations and SMART (specific, measurable, achievable, relevant and timely) goals. These act as a roadmap for employees.

Involving employees in the planning stage of a performance management cycle improves their job satisfaction and promotes transparency. Managers are able to establish individual employee performance development plans and address performance gaps.


  1. Monitoring

The next stage is monitoring progress. Employees work toward the set objectives and attempt to execute assigned tasks. Managers track employee development and measure their performance against the set goals.

Careful monitoring of employees helps managers detect unsatisfactory performance, correct errors and steer employees in the right direction. However, experts recommend against micromanagement, encouraging employees to function independently, asking questions as and when needed.


  1. Reviewing

In this stage, managers evaluate employee accomplishments, shortcomings and growth over a set period. Meetings are held to discuss progress, issues hindering performance and advancement opportunities. Employees receive feedback on what they’re doing well, areas they need to work on and how they fit into the bigger picture. Managers make promotion and/or termination decisions based on the reviewing stage.


  1. Rewarding

The rewarding stage of a performance management cycle is fundamental to boosting employee performance. Rewards can take the form of a bonus, a promotion, organization-wide acknowledgment, autonomy over projects and positive recommendations. Proper recognition encourages high-performing employees to consistently deliver quality work. They’re willing to go that extra mile for their own and their organization’s success.

The diverse stages of a performance management cycle in HRM allow managers to align employees with the organization’s vision, maximize productivity and retain the best talent.

Importance Of A Performance Management Cycle

The importance of a performance management cycle can’t be overstated. A PMS cycle in HR ensures employees are performing up to expected standards and allows managers to make informed decisions about future organizational changes. Here are a few ways in which a performance management cycle is important:

  1. Employee Engagement

A performance management cycle is crucial for employee engagement. It fosters open communication between employees and managers, creating a supportive and inclusive work environment. When managers are invested in employees’ development, employees, in turn, are more likely to be committed to the organization’s success.


  1. Exchange Of Feedback

A performance management cycle facilitates ongoing exchange of feedback between managers and employees. Regular feedback helps employees understand their strengths and weaknesses better, improve working relationships and boost self-esteem. Employee feedback on business processes and organization goals are just as valuable, allowing an organization to evolve and streamline workflow.


  1. Adaptability

To keep up in a dynamic environment, organizations need to constantly revisit their goals, modify performance parameters and adapt to changing business needs. A strong performance management cycle lets organizations do just that. It helps build a resilient workforce, capable of responding to evolving trends.

A performance management cycle is instrumental in forging strong workplace alliances and creating an atmosphere of trust. Employees are happy and more productive; organizations gain a competitive edge.

Going Above And Beyond

The success of a performance management cycle rests on the shoulders of the managers of an organization. Managers must lead by example, keeping employees invested in the work they do and inspiring them to strive for success. However, all of this is easier said than done.

Harappa’s First Time Manager Program focuses on crucial outcomes to bring out the best from promising individuals preparing to take on managerial roles. These include increasing self-awareness, transforming into a manager from an individual contributor and creating an environment of trust.

The 15-week program is built on Harappa’s signature 10 on 10 pedagogy and mapped to must-have “Thrive Skills”. New managers learn to effectively delegate tasks, keep their teams informed and give constructive feedback.

With a careful selection of application-oriented concepts such as the Harappa GRIN Framework, SBIS Feedback Model and PACE Toolkit, the program brings together 10 key elements across three critical phases. It Activates, Cultivates and Elevates the cohort’s performance to deliver excellence.

Help your managers go above and beyond with Harappa’s First Time Manager Program. Sign up for your organization today!

Explore Harappa Diaries to learn more about topics such as Performance Improvement PlanPerformance Management ObjectivesAdvantages Of Performance Management and Types Of Performance Management Systems that will help organizations tap into their employee's potential.

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