What Is the Performance Management Process? (With 13 Steps)

By Indeed Editorial Team

Published 26 September 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

For the staff members of a company to continually improve their performance, they may benefit from ongoing conversations regarding the quality of their work. Management and employees can participate in these improvement discussions, ensuring that every team member has an opportunity to be heard. Learning more about performance management can help you prepare constructive criticism of your teammates' work and reflect on the quality of your own work. In this article, we provide the definition of performance management process and share steps to help guide you through this process.

What is the performance management process?

The performance management process is a procedure consisting of regular meetings in which management and employees provide feedback to one another to help improve the team's overall performance. It emphasises the importance of communication as a problem-solving tool, as it provides all parties with the opportunity to voice their concerns or criticisms. Using these concerns as the basis for conversation, these parties then collaborate on potential solutions to the agreed-upon challenges. This process can help improve the quality of the team's overall output and provide employees with clear and attainable goals.

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13 steps to a successful performance management process

To help you establish an effective performance management process, you can review the following steps:

1. Define goals

To initiate performance management, human resources professionals and members of management typically define the boundaries and expectations of employees' jobs. This definition can include a comprehensive list of responsibilities, short-term goals that outline the employee's daily work, long-term goals for which the employee can strive towards and key objectives that can provide a clear metric for how well the employee is progressing. Setting strong goals can ensure that they understand what management expects of them in their position. Additionally, clear expectations can help them realise their value within the company, which may boost morale.

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2. Receive feedback

Once management has set out expectations, the employee then receives the opportunity to respond to them. Given that they regularly perform the work, they may have a valuable perspective on how these goals relate to their everyday responsibilities. They could discuss how feasible the goals are, what kind of support the employee may require to meet them and how they feel about their work environment. They may also offer ideas on other goals that could benefit the company and improve the metric by which management considers their work.

3. Synthesise and approve the goals

After management and the employee discuss their perspectives on these goals, they can begin synthesising the ideas to create an improved final product. Management can engage them in this process by emphasising its collaborative nature, which can help the employee understand that their input is important. They may appreciate knowing that they're involved in setting their work goals. This sense of agency could help improve their overall work performance. This could also help build a positive professional relationship between the employee and management, which could encourage loyalty.

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4. Organise regular meetings

After management and the employee agree on the terms of the process, they can resume their workflow to enact these goals. The employee may benefit from regular meetings with management to ensure that they're making progress and improving their output. Management can review the employee's recent work performance and offer feedback, and the employee can express how they feel about their progression. These meetings can take place at least every three months, but monthly meetings are often the most beneficial. The frequency of these meetings can depend on their progress and the complexity of the goals.

5. Provide necessary training and tools

At these regular meetings, management may encourage the employee to consider if they would appreciate any additional support or training to meet their goals. Providing enough support can help employees feel comfortable in their work in the short term. In the long term, an employee may gain valuable skills that improve their work output and make them an asset to the company. Management could also suggest specific training sessions that might help the employee succeed in their work. This way, both employee and management can nurture the employee's productivity.

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6. Encourage feedback from all parties

As these regular performance management meetings continue, management can prompt the employee to provide any feedback regarding how well they feel the management is performing. Developing an honest and open system of communication can help employees feel a sense of collaboration. An employee can also provide a valuable perspective regarding the management's support of employees. This could help members of management gain a wider understanding of their employees' feelings towards the company.

7. Revisit objectives and revise accordingly

Over time, either management or the employee may wish to revisit the employee's objectives. Either party may gain a more in-depth understanding of proceedings, so updating goals to accurately reflect the employee's process can be very valuable. For example, if the employee is performing above expectations, management may suggest that they expand the breadth of their goals to encourage further success. Management may also take the opportunity to reward the employee if they're successfully meeting objectives, which can motivate them to continue improving.

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8. Review employee performance

Typically, at the end of the year, management may hold a meeting to reflect on the previous short-term goals that the employee completed. This meeting can provide them with a broader perspective on their accomplishments and growth within the company. While the regular meetings focus on problem-solving and developing methods of supporting the individuals' improvement, this meeting can provide a retrospective that emphasises their improvement. Over time, these meetings could help the employee understand the rate at which they're improving, which may motivate them to continue working towards their goals.

9. Review the performance management process

During the annual employee performance review, management may request feedback on what the employee appreciated about the process. By doing so, management can take steps to improve the process for the upcoming year. The following are questions management may ask during this meeting:

  • Did you struggle to meet your goals? Can you describe why or why not?

  • What challenges did you face in this process?

  • What training did you appreciate the most?

  • Is there any additional training that you would prefer to receive?

  • What feedback was most helpful? What feedback was less helpful?

  • Do you feel that the process was effective? Would you change anything?

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10. Determine goal completion

Beyond reviewing their feelings about the process, management can also discuss the objective metrics by which they measure the individual's achievements. Using these metrics, management can determine how successful they are in meeting objectives. If they're successfully meeting the objectives, both management and the employee could discuss the possibility of providing the latter with more responsibilities and potential rewards for their work. These parties may review a combination of long-term and short-term goals to accurately assess their productivity, as this can help identify where they may benefit from education or intervention.

11. Provide constructive feedback

Ultimately, the reason for this review is to provide actionable feedback to both parties. By assessing the employee's performance in relation to their goals, management can develop concrete methods of professional development for them to pursue. This can empower them to improve their workflow by their next evaluation. Management can also invite them to provide specific notes on ways that a company could create a more productive work environment. Actionable feedback can help both parties express themselves clearly, which can improve the communication of expectations within the team.

12. Reward constructive behaviour

As an employee consistently demonstrates their desire and ability to improve as a team member, management may seek to offer them more work-related benefits. This could include a pay raise, promotion or coaching position. By recognising constructive behaviour, management can positively reinforce these valuable traits. They can also vocalise their appreciation for the positive actions that the company is taking for its employees. This can help a company understand what behaviours their employees respond to, which can improve management's interactions with all other staff members.

13. Prepare for the next performance management cycle

After management holds the employee's annual review at the end of every calendar year, the performance management cycle begins again. Management and the employee collaborate on a new set of long-term and short-term goals that build on the accomplishments from the previous year. Both parties can benefit from this moment of reflection, as it allows them to view the entire process from start to finish and contemplate the results of their work.

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