What is Performance Management?

So you want to know what is performance management? Here you will find a pragmatic explanation:

To give you a clear idea, I will mention two areas of performance management:

1) Purpose
2) Tools

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1) What is performance management? Its purpose?

If it is true that performance management is a system-wide process that helps you measure progress in attaining goals, it is also true that the purpose of performance management is NOT to measure whether goals were achieved or not.

Contrary to what many managers wrongly believe, the true purpose of performance management is two fold:

  • To create competence so that your direct report is cable of performing current tasks
  • To grow your direct report so that she may do more complicated tasks in the future

    And the same holds true for the performance review (also known as the performance appraisal). The purpose of the performance appraisal is NOT to assess the performance of your direct reports, but to help them grow and develop.

    Both in performance management and in the performance reviews you must measure whether goals were achieved or not, but keep in mind that this is NOT their purpose.

    It is critical that you be clear on this.

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    2) What is performance management in relationship to its tools?

    Some of the most common tools and activities in performance management are the following:

    - Goal setting
    - Ongoing assessment activities to measure progress
    - Analyzing performance gaps
    - Identify development needs
    - Providing action plans for improvement
    - Documented feedback
    - Coaching
    - Mentoring
    - Developing competencies
    - Ongoing feedback
    - Performance appraisal
    - Career development

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    What is performance management? To get a more detailed view of performance management specific processes, take a look at some of the articles on this page.

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    Final words about what is performance management:

    Most organizations use performance management as described here above. However, performance management can also be used to create and reinforce your desired culture – in other words – to create your culture by design and not by default (unfortunately, most organizations unconsciously build their cultures by default).

    By pinpointing desired behaviors – such as corporate values for example – you can practically build any culture you want through a well-designed performance management system.

    Furthermore, by pinpointing behaviors that are 100 per cent aligned with well-known best practices in leadership, management, team effectiveness, etc., you can build a high performance organization system-wide through performance management.

    But once again, most organizations use performance management to only assess the performance of their people (they don’t exploit the full potential of this tool).

    What is performance management? When used well, it is a tool to design, create and reinforce a high performing culture.

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    If you would like your organization to learn more about what is performance management through my speaking, training, or consulting services, please, click on this link.

    To learn about the skills you need to manage the performance of your direct reports, go to my Management Skills page.

    To learn about the skills you need to lead the performance of your entire organization, go to my Leadership Skills page.

    To learn about other useful skills, go to my More Skills page.

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