The Purpose of Performance Management

Since the 1980’s, organisations started to realise the importance of the effective utilisation of people as resources, as opposed to the other resources in the organisation to become world-class competitors. All organisations focus on reducing costs, improving quality, and increasing productivity. It is important to understand that collectively, the performance of individuals determines that of teams, departments, and the entire organisation.

A performance management system, therefore, helps an organisation on three diverse but aligned levels:

Benefits of Performance Management

Performance Management is an integral part of day-to-day staff management, but it is specifically focused on improving individual performance and developing individual skills and knowledge, which in turn leads to better team and organisation performance.

People cannot be effective unless:

• They know what they are supposed to do.
• They are capable of doing it.
• They receive feedback on how they are doing.

The purpose of a performance management system is to:

• Help organisations meet objectives and carry out major initiatives.
• Identify ways in which people can contribute to their work team.
• Provide people with a complete picture of what results are to be achieved and how to achieve them.
• Extend thinking beyond a one-time appraisal to an ongoing, day-to-day process.
• Help people improve their performance, ensuring job success.

We can therefore conclude that the purpose of the performance management process is to translate organisational strategy in such a way that everybody in the organisation understands what his/her specific contribution is in achieving the organisations’ strategy.