In the interest of improved employee performance and better business impact, it can be worthwhile for every employer and HR manager out there to acquire a clear understanding of performance management.

In this blog, we will tell you everything about performance management you must know about. So, let’s dive in.


The process wherein supervisors and employees work hand in hand to decide on the tasks, observe at appropriate periods, and analyze improvement along the way is known as performance management. It can also be defined as a process whereby managers help their team members to achieve more optimal performance in the long run.

Now, most of the performance processes comprise the steps listed below:

  • Outlining and Clearing Expectations
  • Observing
  • Growth and Enhancement
  • Periodical Evaluation
  • Rewards


Performance management has always been considered as a process to determine and decide the compensation of an employee. It helps managers to figure out who is eligible:

  • For a bonus of how much
  • Or a salary hike

At the same time, it is wrong to call performance management just a process for determining the compensation of employees. As it is also the key factor that aids companies to resolve a real business problem, i.e optimizing the performance of employees as business performance is directly proportional to employee performance.

Here is when a big question arises- how can a company design a good performance management culture?

Now, getting a relevant answer to this question and understanding its importance is acutely vital as the culture of the performance process can boost both employees as well as organizational efficiency.


So, here are two simple and useful tips to build an effective performance management culture in a company:

  • Create Positive Work Environment

For every company out there, acquiring a satisfactory output from its workforce is one of the most important aspects. Now, it is vital to understand that the atmosphere of a workplace is crucial for any employee to put his or her best foot forward. Besides, a workplace that promotes effective employee practices culture can see wonders in terms of the ROI.

Let’s put some light on two different ways any company can build such a work culture:

Trust & Collaboration: When a company aims to build a trust culture between employees with the help of transparent communication, it will naturally see a positive impact on both work culture as well as ROI. If people within a company trust one another, and leaders focus on a culture where the entire concept of being interdependent while being creatively liberal, is given equal attention to, it will not just increase value to the whole aspect of working collaboratively towards the same goal but also affects the ROI to a greater extent.

Employee engagement: The second thing is engagement. Making sure that employees are engaged is crucial for any business. Need to mention, engagement ensures flexibility. A company with an engaged workforce can easily decline the employee turnover rate, enhance the overall efficiency levels, and improve profits.

  • Effective Discussions

When a supervisor sits with an employee for his or her review, it is necessary to pay utmost attention, discuss vital occurrences, and show compassion. One should try to give smiles for the employees’ achievement and effort. In such a way, any organization can pave the way for improving the whole performance process.

Take a look at some of the critical factors that assure a healthy performance conversation:

Be Honest

Being compassionate and courteous doesn’t mean the supervisor should lie to an employee. In the performance process, honest feedback plays an important role in motivating and helping employees.


Never forget the objective. It should be kept in mind throughout the process.


After the conversation, employees should get a clear picture of what s/he is expected to deliver.

  • Use Feedforward

We all have heard about feedback but only a few of us know about feedforward. So, feed-forward is a method to estimate problems before a problem affects the whole system. The impact of any problem can considerably be cut down by measuring it beforehand and producing a medium or method that will completely prevent it.

In simpler words, the feedback includes the post-execution part of the plan whereas feed-forward is related to the pre-planning of the agenda. Truth be told, feed-forward is an efficient way to make a performance process more fool-proof. It even allows doers to come together and execute things with zero mistakes.

The aforementioned three tips not just assure transparency but also foster a strong culture. Furthermore, acknowledging the hard work of the employees and giving them timely rewards also plays a big role in improving employee performance.

Point To Remember

Now that you know the meaning of performance management, its purpose, and tips to build the right performance management culture, it is time for us to end this blog on a lighter note.

One of the common doubts of many working individuals is that- is performance management and performance appraisal the same thing?

The answer to this question is NO. They are two different concepts.

Performance management includes aiding or supporting an employee to improve and increase his or her performance and productivity. Performance appraisal, on the other hand, evaluates the actual performance of an employee; however, it does not concentrate on the performance or productivity of an individual.

That’s it.

We hope this blog helped you learn more about performance management.

The future of performance management lies in placing ownership in the hands of the employees and teaching managers to mentor instead of police”.

Isn’t that quote very true? Performance management doesn’t mean great systems, rules, data, etc. On the contrary, it is simply about how a company makes the process more optimistic and assertive for healthy work culture and a future-ready workforce.

In addition to this, leaders are also the crucial factor on which both employees as well as the performance of a company hinges upon. Simply put, humane innovation is the key to create a legacy of great performance.

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