What is Performance Management? Definition and Cycle

What is performance management? Management in performance is one of the keys to success in a company. The collaboration and communication that take place between management and employees will be an important foundation that should be paid attention to.

There are roles of the management in performance systems that need to be fulfilled to ensure a smooth run in the company.

This time, Clockster will provide a complete explanation of everything you need to know about this topic.

Understanding Performance Management

The concept of management in performance is a continuous communication effort that happens between employees and the company in order to accomplish certain goals.

It is considered that the technique is effective to achieve a company’s vision since there’s an effort to make in line work goals within the employees and company.

Performance Management Definition By Experts

In order to clearly understand the concepts of this management, here are some definitions according to experts.

• Baird (1986) defines performance management as a series of processes that are carried out by a group in order to achieve the goals that have been set.
• Robert Bacal (1999) defines it as a series of communication within the relationship of employees and superiors, in order to unify the understanding over the work that’s being done.
• Michael Armstrong (2004) defines performance management as an approach to succeed the company’s goals by improving employee’s performance and developing their competencies.

Role of Management in Performance

Throughout the process, there’s a lot of tasks that can be fulfilled by implementing this management concept in the company. Here are the roles that you need to understand.

Company Development

As mentioned before, applying this management is one of the efforts to achieve the company’s targets. The better it is done, the more likely it will bring a great development impact to the company.

Administrative

This approach can be a factor in evaluating other systems in a company. One of them is done by making decisions for the company’s administration. If it is done properly, the company’s administration will be able to produce a more effective output.

Strategic

One of the stages involved in this management process is a strategy to do detailed planning of the company’s goals, in order to achieve the targets.

Benefits of Performance Management

These management techniques are not being carried out, solely just to achieve organizational goals. Instead, all parts of the organization that’s involved can also benefit from it. To understand the benefits better, read the points below.

• Equalize the perception of each member in the company about the vision that wants to be achieved
• Improve the company’s work culture internally
• Increase employee’s performance motivation
• Develop employee’s competencies and skills
• Improve the performance of employees who have been lacking
• A tool to evaluate the company in order to achieve future growth

The Performance Management Cycle

Basically, the management of each company will be different from each other, depending on the culture and goals that want to be achieved. However, in the process, there are at least four stages incorporated in the management system. Some of these stages are:

Planning

The first step is planning. Through this process, the company’s goals will begin to be determined by the superior, but not only at the base of “what is to be achieved” but also when and how to achieve it.

This stage is often being carried out by using the SMART method (specific, measurable, achievable, relevant, time-bound). Making a detailed goal plan, instead of a general one.

Monitoring

Moving on, after being planned carefully, it is necessary to carry out monitoring. The purpose of this stage is to ensure that achieving goals can be done smoothly and if any time there is a problem, the organization can immediately find a solution for adjusting and completing the plan.

Reviewing

Next, both superiors and employees can collaborate to review the plans that were prepared at the beginning. Usually, this stage is carried out at the end of the year and also involves the board of management.

Rewarding

The last stage which is a crucial part is rewarding. This management process will always involve the employees, so giving an award or reward is important in order to maintain their motivation to work in the company.

Example Case Study of Management Performance in Company

In the midst of intense competition in the business industry, management in performance becomes very vital. If the management process is being done well, then the company is estimated to continue to survive.

On the other hand, if the company’s activities run irregularly, then it is possible for the company to go out of business. The following are some good examples of corporate performance management cases to illustrate.

AX Company is a manufacturing company that’s engaged in the field of consumer goods, especially foods and beverages. So at least, the process they do as a management effort is: