Business & Finance

The Performance Management Process

Performance management is a process based on communication that allows its employees and the top officials to work in unison aimed at developing the company in delivering their goals. The effectiveness of a performance management system can make a significant difference in maintaining employee performance in alignment with the company’s goals while giving these employees the motivation to develop. 


With a continuous process, performance management allows managers, leaders or general staff to voice any concerns regarding the entire setup or their progress towards meeting their performance goals.


In order for the performance management process to work, there should be a well-drafted performance management cycle which makes use of a trusted performance management system.


Performance Management Steps

The procedures followed in this process of performance management are divided into four comprehensive sections: planning, coaching, reviewing and rewarding. All of these operations are vital in the success of a performance management system as they form the backbone of a company’s performance management process. They also support in forming a strong foundation that determines the result of the organisation and its goals. 

  • Planning 

Planning is the first step of shaping the performance management cycle, so it’s important to get it right. In order to make performance management effective, there should be some planning involved to discuss the performance of an employee and their desired goals they would like to achieve in developing their role, knowledge and confidence.


With a performance management system, employees and their managers can add goals and objectives into the system to ensure collaboration and unity. These employees are then responsible for all the tasks that have been set to come up with which push the company forward and allow employees to see how their role fits in with this vision.

  • Coaching

After objectives and goals are planned and implemented into the performance management system, employees should then be coached to ensure they achieve these objectives and to guide them every step of the way.


The coaching process is extremely important and should be prioritised on a regular basis, with weekly, monthly, bi-monthly or quarterly meetings to touch base. The purpose of this meeting is to fill in any blanks and ensure that employees feel confident and comfortable in achieving their goals.

  • Reviewing 

Towards the end of the performance management cycle, there should be a formal review held to discuss the previous period and how the employee has been able to achieve their goals, or, if they haven’t been able to, it should be discussed why.


These reviews are typically held on an annual basis and are most commonly referred to as performance appraisals. While ongoing coaching ensures that employees are on track, these formal reviews identify the behaviour of the previous period and how the employee has made progress. 


This step is also the time when managers are able to provide feedback to their employees so that it’s made clear what can be improved. Also too call center monitoring tools.

  • Rewarding

Reward and recognition are crucial in providing employees with a sense of appreciation for their hard work and encourages them to maintain their progress and performance. This step is absolutely key, as employees will not stay motivated if they are given no reason to.


These employee recognition and rewards typically range from bonuses, additional paid days off work, prizes, promotions or even leadership opportunities. This is also the ideal time to declare desired ambitions for employees’ performance for the following year, with perfect timing ahead of the performance management cycle to begin again.