11 Best Practices for Effective Performance Management

Editorial Team

The term performance management is synonymous in any workplace anyone is working at. The members of a company play an equal role in monitoring their performance management, formally or informally. Performance management is a process of several activities and output to effectively meet the goals established in a company. In most cases, performance management standards are set up and organized by employers or senior employees. The person responsible for managing performance needs to state the tasks and outcomes expected, give regular feedback, provide coaching, monitor performance, and so forth. Performance management is not only focused on the product, but also the processes in achieving the desired objectives.

Great performance management ensure mutual understanding and engagement for both employees and managers. Employees could feel connected and motivated to perform their job while managers would expect and be assured of better performance among employees.

There are a lot of strategies that could be done to improve performance management in an organization. In this article, the author will list down eleven best practices for effective performance management.

1. Setting Benchmark

Performance benchmarking is crucial especially for startup firms or companies in evaluating the competitive position in their field market. This will allow them to compare the performances, products, and services from existing successful companies.

You may start by comparing the performance metrics and approaches with other companies. The choices are either to refer to the best company in the field or companies that implement a similar operation with yours. In the benchmarking process, a certain specific indicators will be paid attention to such as cost, productivity, time, or quality. Benchmarking helps a company to be aware of the specific parts that could be improved on as well as noticing what is the aspects that make one company more successful than others.

After benchmarking has been conducted, further adaptation can be done with to improve necessarily as well as trying out new approaches that work well with the other companies. Benchmarking may be done once or several times depending on the needs of the company.

2. Involve Employees When Establishing Goals

Involve your employees as much as you can when setting up goals. This will enhance their understanding of the standard performance they are expected to achieve. Strong engagement could also pull out the best from employees as they are best aware of which area they excel the most. By involving the employees, this could ensure achievable and realistic plans as the employees themselves are well aware of their limitations given the difficulty of the task and time assigned. It is commendable to challenge oneself but the company should avoid pressuring and pushing the employees to their limits. This will only frustrate most people involved. There are several guidelines that could be referred to in creating objectives be it short or long-term which could be found in the internet.

3. Enhancing Understanding

Establishing clear objectives is indeed important but how well do the employees understand the goals outlined by the companies? Most employees do not take the initiative to come forward and enquire about any confusion they had on the goals established by the companies. How do we counter this unseen issue?

It may help to consistently remind the employees of the objectives that are set by the companies. The presentation of the goals is another important aspect as well. Managers can vary how they present the objectives such as in the form of graphic, pictograph, or any other concise yet meaningful presentation. Holding meetings regularly may aid employees’ level of understanding as well. To be more assured, the managers should try to approach their employees in surveying their understanding of the goals that they are expected to achieve.

4. Set Up Personal Performance Record

Encourage employees to have a sense of accomplishment for the tasks they have done. As time goes by, it won’t hurt to encourage employees to set up more challenging goals for them to reach greater heights, exceeding their limitations.

Staying in one comfort zone is not recommended to sustain a secure spot in the market. Aside from maintaining a good place, it is crucial to strive for better performance in competing with other similar competitors so as not to be left behind in nowadays market.

5. Using Performance Management Software

In this digitalized era, it is common to find any tools or software that could be utilized for miscellaneous things. Performance management is no exception. If your company has not introduced and utilized any performance management software, it is best to slowly try this out. There is many accessible and available software that you can find in the market that may ease your management process.

In case your company has been utilizing software but the process is still not manageable or you receive complaints from your employees, it may be best to review the software used, upgrade or consider changing them. It is undeniable that most software is created to ease manpower’s tasks but some software interfaces may be quite confusing to be adapted in a short period. It is advisable to try out one software and review it first. Once the smoothness and better performance are acquired by using the software, then only you may gradually assimilate it into your company’s existing system.

6. Track the Current Performance

One of the easiest tips to track your progress is by providing a list-to-do plan. This may sound mediocre for many but the effectiveness is not impending. It is one of the most preferable ways due to its simplicity. Hence, it is good enough to encourage your employees to stick a list-to-do plan somewhere they could often see like on their table or notice board.

Some of the subjects that should be reminded frequently are analytics, expectations within a time frame, and so forth. Aside from the list-to-do, it is best to work together to create a performance plan. This plan serves as the blueprint which touches on approaching the goals specifically. By narrowing down the goals into smaller matters, the employees will not be too overwhelmed with the broad yearly goals. This performance plan could also act as the guidelines for tracking the employees’ performance.

7. Provide Feedback

Achieved performances should also be complemented with constructive and constant feedback. While managers expect good performance from their employees, the employees themselves expect to receive remarks on their performance.

By providing feedback to good performance, it will enhance good behaviors among employees and paving a clear path to improve on. Good performance aside, the performance that has not meet the expectations needs to be given feedback too. By providing constructive feedback or comments to the tasks the employees are working on, it may encourage them to improve themselves not only for the sake of the company productivity but also to maintain the good rapport built between the managers with the employees themselves. This kind of reassuring measures will build their intrinsic drive to accomplish their goals. Aside from managers-employees interaction on feedback, the employees could also provide peer reviews among each other.

It is advised to provide feedback in real-time, not only during the annual meeting or performance appraisal. It should also be fused as part of the company culture so that it is not rare for managers or employees to praise or constructively critique each other’s work. Bear in mind that good performances deserve to be rewarded while underperforming tasks should be addressed accordingly.

8. Encourage Adaptation and Flexibility

There are cases where objectives that have been established seem impossible to be achieved within the allocated time. For this circumstance, it is advisable to allow changes to be done by the employees under the supervision of managers. Early adaptation may help to prevent the potential issue from worsening thus disrupting the performance and morale of company members.

Some adaptation also helps in considering the relevance of one task. This could prevent from performing irrelevant or pointless tasks that are deemed not important at the time being. However, avoid doing changes too frequently because it may signify inconsistencies and incompetence of planning among the team players aside from making it difficult for the employees to boost their momentum again.

9. Work on Documentation

In managing any sectors in the company, documentation plays a huge role in providing the most precise information on performances. There should not be any false information recorded in the documents. This is very crucial so that the follow-up process could be done effectively. Imagine if one decided to hide an issue and did not mention it in the documentation. If the matter worsens, it would bring harm to the sector or worse to the company as a whole. By being truthful in documenting, any issues could be addressed early and it could also record any improvement accurately. In ensuring this step is taken seriously, it is advised to provide coaching and constant training in note-taking. By getting sufficient note-taking skills, every company member would be able to include every significant information which will later be written in the documentation.

10. Build Trust between Managers and Employees

Trust is a fundamental drive in ensuring the constant improvement of performance. One of the best ways to strengthen the trust is by providing organizational transparency. Nowadays, most employees expect a broader level of openness delivered by companies. Transparency will not only build trust from the employees but also improve engagement and overall performance in a company.

When employees truly trust the company they are working for, they can align their personal goals alongside the company’s goals.

11. Appraisal Done More Regularly

There have been many cases where the company regards performance appraisal as an annual event. This is not recommended due to many reasons. To improve performance management more effectively, it is more advisable to perform the performance appraisal at least thrice a year. In case your company has been performing annual appraisal and decided to start making it more regularly, you may start by doing it at least three times annually. Then the number of appraisals could be gradually increased throughout the years so that each team player is not pressured with the abrupt changes. A regular appraisal conducted in a company is truly beneficial and has been proven by existing companies.


Efficient performance management is fundamental in any workplace to sustain the order and improvement of ones’ performance. Besides, it could be essential in keeping track of objectives be it among the employees or the company as a whole.

Some companies only appraise performance management yearly. However, a more regular appraisal is more recommended to keep track of current performance. This could also help boost motivation and providing a clearer view to improve on where is lacking.

Effective performance management will help both employees and managers to tally up their strategic objectives, resources, and system. It serves as the tracker so that company members won’t go astray from the company goals.

Employers or senior employees play an important role in managing performance in a company. There are countless tips and guidelines that could be referred to in practicing effective performance management. These eleven practices mentioned before could act as a brief guideline for both employer and employee in a workplace who strive to refine their performance management.