The Benefits of Performance Management

Picture Credit: Mitchell Lokiec looks over the shoulder of operator chairwoman Ablina Galderisi for a time-motion study, February 8, 1957.

Performance management is defined as “the systematic process by which an employer works with employees to improve effectiveness in the accomplishment of work objectives or goals.”

Its fundamental purpose then is to promote and improve an employee’s productivity through planning, monitoring and a review of their overall contribution to the business or organisation.

So, what do employers learn from their teams by using a performance management system? Below, we’ve listed some of the benefits effective performance management can have:

Training Needs

The accurate evaluation of employees can help identify those who require training in certain areas. By providing a robust performance management system, employers will be able to develop and nurture the skills of individual employees.

Performance management training, provided by HR, can also help to create a positive and cohesive company culture.

Morale & Retention

Using performance management to set goals can boost the morale of staff and ensure both the employer and employee are clear on the priorities and direction of the business.

The higher an employee’s morale, the more likely they are to be loyal to the company, thereby improving retention rates and increasing productivity.


Performance management is an effective tool for growth and success. Regular one-to-one meetings demonstrate recognition by employers of the input of their employees and this can go a long way to boost motivation.
Using performance management to give positive feedback and appraisals reinforces a strong company culture, as part of which social engagement is valued.


Improved employee performance and engagement is a result of consistent feedback and coaching. The consistency of performance management will also give the employer a better idea of the next path employees should be taking in their career with the company, whether that be a promotion, transfer or other action.

Identifying Weaknesses

Performance management programmes are also a good way to deal with troublesome employees without resorting to terminating their contracts of employment.

Employers can identify employees who are underperforming, enabling them to provide that person with additional training or support which plays to their strengths, helping them to feel valued as a member of the team.