Performance Management

Cite this article as:"Performance Management," in The Business Professor, updated April 11, 2020, last accessed October 22, 2020,

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What is Performance Management?

Performance Management is the process of continuously identifying, measuring, and developing workforce performance within the organization. This means aligning the goals and objectives of individuals, groups, and the organization.

Managers project, identify, compare, and foster performance within the organization. It is a systematic assessment of the individual, group, and organizational performance to improve performance over time.

The Performance Management Cycle proceeds as follows:

  • Plan – Develop plans consisting of outcomes and behaviors.
  • Act – Implement those plans at each level of the organization.
  • Monitor – Monitor how closely those plans are followed (behaviors) and the results from those plans (outcomes).
  • Review – Review the results and take corrective actions as necessary to improve any deviations from standards or expectations.

Performance management seeks to improve employee performance by ensuring employees understand their key job functions, creating awareness of the performance level expected, providing continuous feedback on performance, and undertaking training and development.

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