What are the benefits of a good Performance Management System ?


The benefits of a good performance management system

You are trying to convince Top Management to redesign the Performance Management System at your organisation, because the existing one is not producing the desired results and has lost its shine internally.What are the benefits of a good Performance Management System ?

Here are some of the positive outcomes you can describe to the Executive Leadership Team as the introduction to the changes you want to introduce.

Benefits of a good Performance Management System for employees

  • More motivation to perform
  • If feedback is delivered properly and a genuine opportunity for improvement is given, the self-confidence of the employee can raise
  • The job is defined more clearly and expectations are clear, providing the required direction and aligning with the strategic goals of the company
  • Development opportunities

Positive Outcomes of a good Performance Management System for the manager

  • Better knowledge of her team members
  • Increased team and individual productivity/performance
  • Prevention of larger issues through an on-gong discussion around performance (on-going feedback) 

Benefits of a good Performance Management System for the company

  • The strategy and company goals are better communicated, understood, and acceptedEfforts are aligned in the direction of the achievement of the strategic goals.
  • If there is a link to pay, the increase and/or bonus budget will be spent on a fairer basis, will be more credible, and should yield better returns in terms of recognition / motivation aspects.
  • The content of the appraisals will help do the manpower planning and adapt the training plan to the needs expressed to perform well in the job.

Of course, all these positive aspects will only happen if the system which is put in place :

  • is aligned with the company strategy
  • fits with the company culture
  • is supported by the top management (through leadership by example)
  • is an on-going process, not a once-a-year administrative event
  • is not “stand-alone” but well integrated with other people management processes and managerial activities.

In short, a good Performance Management system has the objective, and potential, to increase the performance of the organisation through that of its members. You need to make sure it is supported by the management, aligned with its culture, and becomes an on-going people management activity for it to deliver all its potential benefits.


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  1. Well said! and Nice Article. Informative for all the business owners.

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