What is performance management and why is it important?

Performance management is conducted to ensure that an organisation’s goals and objectives are on track to be achieved in an efficient way. Performance management doesn’t just concentrate on employees, it can be focused on the performance of a department and the processes of a business. The process of performance management is to review results, set new goals or objectives and provide any feedback, all of which improve the overall function of a business. 

There is a significant importance on incorporating performance management into your business, it helps to align all factors that make up a company and ensure that all objectives are being achieved. Not only does it highlight potential problems to solve in the business but it also allows an employer to see when an employee or department are going above and beyond. 

The benefits of performance management

Boost employee motivation

Employees like to be told they’re doing a good job, so a performance review is the perfect time to compliment them and let your employees know how well they are doing, this builds trust and a stronger relationship. 69% of employees said that they would work a lot harder if their efforts were recognised, so by enforcing performance management, employee morale is going to improve. 

Identifies training needs 

Reviewing an employee’s performance can highlight and indicate where they may be struggling, for example, they could be lacking skills in a certain area. Having an open space for employees to communicate how they feel within their roles or any areas that they may find harder than others, has a beneficial impact on your business as you can identify and require the correct training for them, resulting in improved efficiency where goals and objectives are on track to being achieved. 

Continuous opportunities for development 

Giving consistent feedback to your employees results in continuous development for them, and with that comes higher engagement rates and better productivity. Your employee workforce will grow to be stronger through performance reviews as any problems or worries will be solved, resulting in a faster and more efficient workplace. 

Under performers highlighted

Businesses can be impacted negatively by employees who aren’t pulling their weight or who may not have the required skills, so evaluating performance can highlight this. As hard and brutal as it may be, it gives your company an opportunity to find out who can be impacting the business efficiency in a bad way. 


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