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Performance Management Definition
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Performance management is the process of planning, implementing, monitoring and improving and sustaining the efficiency and effectiveness of organisations, teams and individuals.
When examined closely, it is clear that this definition contains three main concepts.
They are the following:
It indicates that the process applies at three integrated levels namely:
- The organisation as a whole
- Units within the organisation (divisions, departments, teams, etc)
- Individual staff members
It indicates that the process has five major components:
- Planning and contracting performance requirements
- Implementing planned activities
- Monitoring and measuring performance levels
- Improving activities
- Sustaining achieved performance levels
It is important to realise that improving efficiency and effectiveness refers to both:
- Improving individual performance; and
- Developing individual skills and knowledge.
In summary, it can be concluded that Performance Management encompasses both the aspects of performance improvement and the development of human resources. Performance can only be improved to a limited point without the development of the skills and knowledge of the people from whom the improved performance is expected. The most effective performance management system, therefore, focuses on these two diverse aspects of performance management separately: “What the company gets out of it” and “What the employees get out of it”. It needs to be a balanced, two-way beneficial agreement if you want to ensure success.