Performance Management

Most employees have a general idea of what performance culture means, but a lack of specifics means that few organizations ever achieve that culture or the levels of performance desired. It is important to start out with a good understanding of what performance is and the levels at which it occurs before considering how to manage it. Performance occurs at three levels: individual, group, and organizational.

Performance at the individual level is a function of ability, effort, and context. The individual must have the ability required and make the effort to do a task or job well. Today, most workers are increasingly interdependent and group performance is often more than the performance of individuals in the group. Organization performance criteria may be found in the mission statement, statements of organizational strategy, cultural definitions, the business plan, and other statements of long- and short-range organizational purpose.

Performance management (PM) is the system used by organizations to tie individual, group, and organizational performance together. It consists of three stages: performance planning, performance period (during which observation and positive and corrective feedback take place), and periodic summary appraisals (which start the planning process for the next period). Performance planning should be constructed in such a way that any manager can do it, regardless of management style or skills. The best managers involve the employee collaboratively in all phases of the PM process.

Positive feedback is one of the most powerful reinforcements available to the manager. It should occur immediately after the high performance is observed. When performance is below standard or below the goal set by the direct report, corrective feedback is used, again relying on the standard and on the goal set as the benchmarks for the observed performance. When discussion about performance is couched in terms of known measures, standards, and goals performance, feedback can be objective, and it is less likely to be seen as criticism of character.


At some point, a summary of performance during the period is provided to the direct report. In most organizations, this is an annual event, but some organizations have quarterly or semiannual performance summaries. Getting from organizational performance to individual performance is not always easy, but the performance management system is the way it can be done. Performance data are critical to the organization if it wishes to achieve its strategies. The performance management system links individuals to the goals of the organization and is critical to development of the human capital of employees.