Performance Management

The Role of Performance Management in an Organisation

It is essential that every employee understands the rationale and process of performance management and should take ownership of performance management in respect of his/her own job. For managers, this responsibility extends to overseeing performance management in their departments and for their direct reports. Performance management is a business improvement system which must be owned and managed by line employees. It is not a compliance system that is owned by HR, though HR provides valuable support.

An effective performance management system is not a “two event” affair but rather continuous throughout the year. Employees and managers should meet throughout the year. During these meetings, performance is discussed, problems and hurdles identified, and support given. If these monthly meetings take place regularly, then the yearend performance appraisal is no longer a stressful and threatening event.


The annual performance management cycle may be depicted as follows:

An effective system is of fundamental importance to an organization’s ability to implement its strategic objectives. And yet, all too often, these systems fail to deliver the expected benefits.

Performance Management, when administered correctly has the following benefits:

Direct financial gain
• Grows sales;
• Reduces costs in the organisation &
• Aligns the organisation directly behind the strategic goals.

Motivated workforce
• Optimises incentive plans to specify goals for over achievement, not just business as usual;
• Improves employee engagement because everyone understands how they are directly contributing to the organisations high level goals;
• Creates transparency in achievement of goals;
• Creates high confidence in bonus payment processes &
• Professional development programs are better aligned directly to achieving business level goals.

Improved management control
• Flexible, responsive to management needs;
• Simplifies communication of strategic goals &
• Provides well documented and communicated process documentation.

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