What is the first thing you notice when you’re about to download a mobile application? In addition to different features and specifications, you’ll also see customer reviews and ratings. Developers take customer feedback into account while working on new and improved iterations of the application.

This is why you have so many app updates! This is one of the many ways in which businesses build effective performance management systems. Let’s look at how the process of performance management improves modern-day operations.

What Is Performance Management Process?


The process of performance management is collaborative and communication-driven. It allows organizations to plan, monitor and review their employees’ long-term goals and contributions to the business. The process is continuous, letting both employers and employees revisit their strategies and development plans.

At its core, the performance management system involves goal-setting, performance evaluation and incentives. When properly executed, the process of performance management has several benefits. It boosts productivity, promotes morale, produces better business outcomes, and creates a system for continuous guidance.

Steps In Performance Management


Here are a few steps to effectively utilize the process of performance management.

Step 1: Preparing

The first and foremost step in performance management is preparing your business objectives. You’re better equipped when you understand what the organization is trying to achieve in the long-run. It’s a three-pronged process.

  1. There is an overall goal-setting process to define the larger objectives of the organization.

  2. Each department establishes team goals or collective objectives.

  3. Every department further breaks down the team goals. Tasks are assigned to individual team members and employees.

Step 2: Planning

In this step, businesses organize performance planning using two key components

  1. Establish Employees’ Functions: 

Often, the job description alone doesn’t communicate an organization’s purpose. It may confuse you and consequently affect your performance levels. If managers take the time and effort to clearly communicate the overall objectives of the organization, a clear picture of expectations and duties emerges.  This will enable you to set individual milestones.

  1. Define Strategic Plans:

Employers develop plans because they want to add to your skills and help you improve your attitude. In other words, your competencies are best utilized when there’s a concrete plan to guide you along the way. Good managers encourage team members to share their opinions when business plans are being defined. Bringing in different perspectives can improve the quality of development plans.

Step 3: Coaching

The coaching or guiding process is extremely crucial to reach business targets. Here are the ways in which your office can effectively support you:

  1. Training Or Mentoring Programs:

One way to stay up-to-date with evolving industry trends is to organize training programs. It’ll help you re-skill or upskill and feel more confident about performing your role.

  1. Ask For Feedback:

Through a continuous loop of feedback and advice, you must keep identifying areas for improvement. This will further help you challenge yourself. Feedback is effective when it is constructive, actionable and encouraging.

Step 4: Reviewing

In this stage, businesses evaluate individual and team performance. Performance appraisals or assessments are needed because they help you reflect on your progress. Here are a few factors that lead to useful  performance reviews:

  1. Both managers and employees should be involved in the process

  2. Everyone’s feedback should be treated with equal importance

  3. Every achievement (no matter how big or small) should be rewarded or recognized

Step 5: Renewing

The performance management system is also called the performance management cycle because the process is continuous. The new cycle should align with the objectives of the new financial year. There are a few things to remember before you move on to the next performance cycle

  1. Have the new targets been recognized and communicated to everybody in the organization?

  2. Are there new strategies in place to help align individual goals with the collective goals?

  3. Has there been a change in the external environment that can affect someone’s performance?


Harappa Education’s Leading Self course will teach you to get on the path of becoming the best possible version of yourself. You’ll learn about the different obstacles that often disrupt performance. The Performance Equation Framework will help you identify potential challenges and interferences. The Balcony and Dance Floor Model will teach you to balance action with awareness. Identify areas for self-improvement by taking ownership of your responsibilities. Embrace new opportunities for personal growth and overcome limiting beliefs. Don’t wait for performance reviews to realize your potential.

Explore topics such as Performance ManagementChange ManagementChange Management Strategies & Types of Organizational Change from our Harappa Diaries section and lead on a path of self-development.

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