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Up the Value of Your

Performance Management System

Integrity Staffing & Solutions 

Is the performance management process in your organization considered a value-add activity by managers and employees?  Do managers and employees understand the goals of the performance management process?  Are your organization’s managers and employees well-trained in the performance management process?  If the answer to any of these questions is “no,” it’s time to consider revamping your performance management process.

Key Elements of an Effective Performance Management System

  • Define the purpose of your performance management system.
  • Align a performance management system with the company goals and objectives.
  • Make sure the performance management system works for the organization.
  • Make sure the performance management system is legally sound.

Defining the Purpose

There are two primary purposes for a performance management system: a) employee decision-making and b) employee development.

If the purpose of your performance management system is employee decision-making, then the information generated in the performance management process is used to decide pay raises, promotions, transfers, reductions in force, etc.

If the purpose is used for employee development, the performance management system is used to determine organizational and individual training needs, job experiences, mentoring, and other developmental activities.

Aligning with Company Goals and Objectives

Your workforce should function as a cohesive unit, focused on the same overall goals and objectives.  Your leadership team should develop the organizational goals and objectives that are then cascaded down through the organization to the individual employee level.

Making It Work for the Organization

Your organization’s leadership needs to understand the value a strong performance management system can add to the organization.  Senior level support is critical to the system’s success.  Additionally, it is important to create a design team with representatives from key internal constituencies.  Members of the team can solicit valuable feedback and concerns from their business units and advocate for the system as it is developed.  It is also critical to regularly train both managers and employees on the performance management process.

Making It Legally Sound

A legally sound system is important as well.  Your system should ensure employees are told at the beginning of the review period to what expectations and performance standards they will be held.  Employees should be evaluated on only factors related to their jobs.  The performance management process should be documented.  Managers should maintain records of both the things the employee has done well and the things on which the employee can improve.  Evaluations should be reviewed by others and there should be an appeals process in place if the employee disagrees with the evaluation.  Decisions based on the evaluation should be consistent with the ratings given in the evaluation.


A well-developed performance management system can add tremendous value to an organization by creating a high-performing pool of talent whose behavior is aligned with the culture and business needs of the company.  Performance management systems can consume a great deal of your organization’s internal resources; make sure the value added is worth the effort.