What are the Objectives of Performance Management System?

Published On: January 13, 2021|Categories: Performance Management|

What are the Objectives of Performance Management System?

Published On: January 13, 2021|

While our earlier articles talk more about the aspects of OKR and feedback, we would like to share a few insights into the objectives of performance management. Firstly, one needs to be aware of what performance management actually means. Performance management is simply described as:

“A continuous process that seeks to identify, measure and develop the performance of the workforce periodically”

There is a fair chance that the organizational performance report has not met the expected level. Also, the existing performance management system is not enough to elevate employee performance.

Instead of pushing your performance management system to the edge, a touch of the redesign will bring great results.

The first step in establishing a performance management system that actually works is to understand the objectives behind it.

We also should pen down clear and concise objectives of a Performance Management System

What are the Objectives of Performance Management System info graphics

Objectives of Performance Management

  • Setting and defining goals to fulfill organizational objectives
  • Setting the right expectations for each employee – managers and employees
  • Setting Performance Standards and metrics to measure
  • Establishing effective communication channel between managers and sub-ordinate
  • Determining training plan.
  • Review the process periodically.

1. Setting and defining goals to fulfill organizational objectives

Goal setting is the most profitable way for initiating better performance among employees. It has been constantly demonstrated that effective goal setting

– allows employees to focus on what’s important.

– aligns individual objectives to the business objectives.

– optimizes employees’ individual performance.

– helps to identify the Key Results and work upon delivering them.

An efficient performance management system will ensure that goal setting is one of its integral requirements. As an employee/manager, one should set goals that benefit both- employee performance and business performance.

2. Setting the expectations right for each employee – managers and employees

An efficient performance management system should set expectations right for each employee – managers and employees. As a manager, it’s crucial that you place manageable expectations from your employee. It is absurd to expect a poor performer to start giving good results right away. Or a star performer to stay consistent every other week.

Similarly holding managers to high expectations will only bring in poor management decisions.

How then do we set expectations to bring in desired results?

• Define the expectations of your employees in clear terms and communicate the same. Get acknowledgment to avoid any misinterpretation

• Document expectations and the progress towards it periodically. Review conversation and feedback are very important without which any performance management system will only be a check in the box activity.

• Once every employee understands his/her roles, responsibilities, and accountabilities they are more consistent and productive.

This will facilitate better business performance and also encourage the personal development of the employee.

3. Setting Performance Standards and metrics to measure

Once the goals are set and communicated, there have to be set standards of deliverables. There should be metrics to measure the objectives defined and keep it simple. They have to be realistic and in line with the industry practice and most importantly ensure the deliverables are adding to the company objectives.

4. Establishing effective communication channel between managers and sub-ordinate

There is a long existent gap in most of the PMS that is a lack of conversation between managers and their team members. It is not a standalone activity to achieve rather as a team they need to contribute to the overall organizational goals. Hence it is important to communicate and have discussions regularly. This would give the employee an understanding of how well he has been doing and how to prioritize the remaining goals. This is possible through conversations being done periodically. This channel also gives an opportunity to both – the managers and the team member to have a better connection and address many other employee issues that may be underlying. Not just addressing issues, but also identifying HiPos at an earlier stage is possible. There is always room for improvement and a need for up-skilling among the employees. All of these can be addressed through a proper communication channel.

5. Determining training plan.

As it is important to fuel our vehicles for better efficiency, it is highly important to upskill your employees in order to perform with better efficacy. From amongst the practices prevalent in the industry for recruiting talent which is Build-Buy-Borrow, what could be more cost-efficient than cross-department training. This ensures the skill available within the organization is shared with a larger talent pool. This ensures the knowledge is not vested in only one/few talents rather the talent pool is larger. This also ensures lower dependency and identifies talent and better means of engagement and recognition.

6. Review the process periodically.

Once the system is functioning well, it needs to be counter-checked to avoid any missed chance. There should be a regular audit of the reports and fine-tune the process and system at least 3 years once. This not only eradicates the loopholes but also allows for alignment with the industry practice.

On this note that it is important to have a robust PMS in an organization, we would share articles on how to set objectives and key results, followed by the benefits of having a good PMS system and its challenges. Keep watching this space for more updates. You can share your views in the comment box below.

Feel free to browse our products session to have a glimpse of what we offer.

Reach out to us at www.datalligence.ai or write to us at cs@datalligence.ai to implement OKR based performance management.

Frequently Asked Questions

During the last few decades, there are quite a few performance management system has emerged. Few well known are


  • MBO(Management by Objective)
  • BSC (Balanced Scorecard)
  • 360-degree appraisal
  • 180-degree appraisal
  • BARS Behaviorally Anchored Rating Scale
  • 9 box matrix

Performance management helps in identifying the top talent of an organization and also helps them to manage their talent. The skill analysis and the gap can be identified through the performance management and organizations work towards upskilling their team. This also serves as a feedback to an employee

Gone are the days when performance management has been half-yearly or annually. Now, most the adopted continuous performance management as it helps organizations to understand the gap and share feedback continuously. It also allows managers to appreciate and recognize the team constantly to create employee engagement.

It is essential to migrate to continuous performance management as the workforce has got shifted to millennials and they also need constant feedback and recognition. Post-pandemic where the workforce is both remote and hybrid it helps organizations to run continuous performance management.

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