Defining performance management

Performance management has a significant role to play in enhancing organisational success by ensuring all individuals understand their expected contribution to business objectives, and are both motivated and equipped with the skills and support to achieve this.

In an ideal world, performance management should be a continuous process rather than just a one-off event (e.g. the annual appraisal), which is often part of the process: for while performance appraisal can be an important part of performance management, it is not in itself performance management but one of a range of tools used to manage performance. Article 99 shows the four stages of the appraisal cycle.

The term ‘performance management’ has also come to mean a one-to- one procedure between manager and employee which aims to improve specific issues such as consistently poor performance or unacceptable behaviour.

However, the classic definition of performance management – “a process which contributes to the effective management of individuals and teams in order to achieve high levels of organisational performance” (Armstrong and Baron, 1998) – underlines its ongoing nature, aimed at continuous improvement for the benefit of both the individual and the organisation.

It should be both strategic – about broad issues and long-term goals – and integrated – linking people management, individuals and teams. It should incorporate:

performance improvement – throughout the organisation in relation to individual, team and organisational effectiveness

development – performance will not improve unless there is continuous development of individuals and teams

managing behaviour – ensuring individuals are encouraged to behave in a way that allows and fosters better working relationships.

Performance management is also about sharing expectations in an organisational culture where individuals and groups take responsibility for the continuous improvement of business processes and of their own skills, behaviour and contributions.

Effective performance management processes mean managers are able to communicate what they expect of individuals and teams, while individuals and teams can communicate their expectations of how they should be managed, and what support and resources they need to do their jobs. Performance management is also about maintaining and improving the quality of relationships – between managers and individuals, between managers and teams, between members of teams and so on – and is thus a joint process.