Regular performance management improves employee engagement and satisfaction in their work. This empowers employees to succeed on a personal level and supports organisations to stay competitive. Once it was all about how much a company could get out of its employees. However today, organisations must focus on attracting, retaining and developing skilled employees. This enables the business to achieve its goals now or in the future. Businesses need to help people be their best. And not just now and again but every day too. Switching from annual performance reviews to continuing performance management helps employees and managers build relationships and support each other’s success.

What is performance management?

Performance management refers to the systems and attitudes used to help organisations plan, delegate and assess their operations. It evolves alongside feedback and appraisals to ensure that employees work in line with their company's stated values and goals. When implemented correctly, performance management can guide your employees to develop their skills and careers. But also at the same time meet the needs of the business.

Strong leadership is key

But good performance management techniques will only work with great leaders. The manager's role has transformed from administrator to mentor and coach. This means managers are critical to improving employee performance, engagement and development. Strong and effective leadership enables employees to achieve success by:
  • Agreeing goals that will achieve both personal and business results
  • Developing an organisational culture of regular feedback and acknowledgement
  • Supporting growth and development
  • Holding effective discussions about performance and well-being
These practices help employees feel appreciated and that they contribute to the organisation's success. When employees feel valued it boosts engagement, productivity and retention.

Project Oxygen

It is vital that you build trust between yourself and your team. But to achieve this, employers must always behave with integrity and demonstrate clear leadership. Project Oxygen was a study led by Google in 2009, which identified the traits shared by good managers. Their study found that good managers need to:
  • Be a good coach
  • Empower the team, rather than micromanage
  • Show genuine interest in successes of team members’ and their well-being
  • Be results-orientated and productive
  • Good communication and listening skills
  • Support employees with their career development
  • Create a clear strategy and vision for the team
  • Have appropriate technical skills to advise the team
The study highlighted how people respond well to a manager who enables them to get on with their job. Whether that's through problem solving, protecting their team from external pressures or resolving issues that could impact upon productivity.

Making performance management work for employees

Be present and visible

One of the most vital elements of good day-to-day management is visibility. Spending every day sitting behind your desk in your office, means you cannot know what your team is working on. And, you won't know about any issues they face either. Get to know your employees and make yourself approachable. Make sure you are familiar with their responsibilities and their ways of working. Keeping a regular presence will enable you to resolve problems sooner and allow you to better facilitate your team's workload.

Goal Setting

Success should be every businesses’ primary goal, whether an organisation measures success by market share, brand recognition, profit, or another priority. But achieving that goal is dependent upon all employees pulling in the same direction. This is where setting goals is crucial. Doing so will bring into line their development with the overall business strategy. This also ensures the organisation can fairly and accurately measure the employees’ contribution to it. Many studies have found that goal setting can lead to a significant increase in both employee and business performance.

The most commonly used framework for goal setting is SMART:

  • Specific: The goal is certain and not ambiguous in any way.
  • Measurable: It should be a goal that's empirical.
  • Attainable: The goal is achievable and realistic.
  • Relevant: The goal serves the business.
  • Time-bound: Timeframes to work to.
Setting goals this way will mean that your employee has a structured and practical target to work towards. And one which managers and the employee can assess and adjust as necessary.


Goal setting develops your employees so that they can become a beneficial part of your business. A structured feedback and appraisal process enables managers to steer employee performance through positive feedback, constructive criticism and goal setting. To motivate employees, appraisals require good interview and counselling skills. Poorly-handled critical feedback can have a disastrous, de-motivating effect. The process takes time and should involve a measured approach. And importantly, it relies on a good relationship between manager and employee in order to discuss performance honestly and openly.

Providing feedback

Over the last few years, many employers have begun using 360-degree feedback. This is employee feedback taken from their immediate work circle, their direct manager, and also, sometimes a self-assessment. Together, this creates a rounded and objective view of their performance. Allowing employees to rate their own performance, lets them demonstrate their input into their work. It makes the process more than just about measuring output. And of course, this is useful. But it should not replace regular one-to-one discussions as the primary form of appraisal.

HR should support performance management by identifying how employees' performance goals align with the aims and values of the business. Appraisals and feedback becomes a vital tool to ensure that the whole team is heading in the right direction.

An article by HR Solutions, providers of practical HR advice