Performance Management: Meaning, Objectives, and Benefits Explained

The role of Human Resource (HR) department in any organization has moved to new standards over the past few years. The focus of the department now lies in enhancing the level of functional strategies of the employees.

One of the best options in the direction of improving corporate functional results is Performance Management. Performance management essentially seeks to monitor if the organisational activities lead to the achievement of the business objectives efficiently.

How does Performance Management work and what are its objectives? Find the answers to these questions and our inputs about performance management in detail.

Page Contents

What is Performance Management?

Performance management is essentially a program within corporate management that aims at implementing an employee development approach.

It involves a range of options and function areas and focuses on setting goals for the employees, reviewing their performances, recognizing the efforts and rewarding them and developing an overall employee development portal.

Performance management is an ongoing process and is aimed at continually offering development options. The program stays running right from the day an employee joins an organization to the day he or she leaves it.

Performance management or performance appraisal is aimed at creating a high culture performance for both the individuals and team performance. The program aims at raising the bar for the competence of an organizational workforce.

The Objectives of Performance Management

Like it has already been clearly outlined, performance management is an attempt at raising the bar of performance and achievement to a better extent. It is aimed at making people do the right things at the right time.

From that perspective, the major objective of any performance management or performance appraisal is to achieve the full potential of employees to the maximum possible extent.

Some of the major objectives of Performance Management can be summarised as here below

It aims at enabling the employees to achieve better standards in terms of work performance.
Performance management lets you help your employees detect the skills and knowledge required for efficiently achieving the expected performance from them. This will assist you in letting your employees indulge in the right tasks at the right time in the right way.
Enhancing employee empowerment. This can only be done through motivation and implementation of an effective reward mechanism. This will go a long way in promoting employee morale, and thereby boost the performance of your employees.
One of the important objectives that performance management can work towards achieving is the two-way communication between the employees and supervisors or management. This can help clarify the expectations and actual performance in a positive manner. The two-way communication can be an essential element in improving the level of transparent feedback for improved performance of the employee. It can also help offer continuous coaching.
Performance management is also helpful in detecting any barriers that come between the employee and the optimum performance of these employees. These barriers are taken care of through monitoring and coaching regularly.
Performance management can come in handy in taking a few important administrative decisions that involve strategic planning, succession planning, promotions, and performance-based rewards.
It will also be an effective option for enhanced personal growth and career advancement of the employees. This can best be achieved by proper training and guidance along with motivation.

Objectives of Performance Management from Human Resource Development Point of View

The performance management or performance appraisal also needs to focus a few other objectives that are aimed at providing access to an effective human resource development initiative.

Some of these objectives which are also important are as follows

Create a compelling job description that will be assistive in hiring the right kind of people with the most needed skill sets. This will help in creating effective employee performance plans replete with performance indicators and key result areas.
Development of a strong hiring process so that the right candidates are chosen for the key result areas outlined as above.
Configure and define the benchmarks so that the actual performance of the employees are compared with these standards to arrive at the right evaluation.
Measure the performance and productivity of each of the employees against the set guidelines and take up corrective actions like training.
If the employees are leaving, the performance management conducts exit interviews to find the reasons for the discontentment of the employees with the organization or the reasons for leaving.

Benefits of Performance Management

As a forward-looking organization, Performance management should be an excellent option for the development of the managers, organization and the employees.

What are the advantages you stand to gain? Here are a few parameters that may be interesting enough.

1) For the Employees

The advantages that the employees stand to gain include

It offers a clear indication and guidelines about what is expected of its employees in specific roles. This includes the key result areas.
Employees gain an option to self assess their capabilities. This includes self-reviews, introspection, and improvement.
It helps employees to improve themselves and provide enhanced performance and better productivity levels.
Performance management ensures that employee is always satisfied and improves the existence of a positive mindset towards the responsibilities in particular and the organization in general.

2) For the Organisation

From the organization’s point of view, Performance management has the following benefits –

It helps in improving employee loyalty levels and improves employee retention to a significant level.
This can help a lot in promoting the overall performance of the organization and offers you a better brand image.
It can help improve the productivity of the organization and help you reduce the cost factors associated.
Performance management and appraisal can help set the responsibility on the right individuals, and this can help your employees become accountable.
This will assist you in overcoming the communication errors in the organization.

3) For the Managers

What do the managers stand to gain with the performance management –

It saves enough time and efforts for the employees so that they can take an initiative in other important aspects of their day to day work.
It will improve the performance levels of the team members. This can improve performance further ahead.

The Concluding Thoughts

Performance management has become an inevitable tool that aims to improve the performance of an organizations workforce and subsequently the organization as a whole. It can help a corporate to achieve the best results in upholding the values to a greater extent and thus help in achieving the goals and vision set.

It is indeed a procedure that always is forward-looking and can be an indispensable tool for the betterment of the employees, management and the organization.