June 15, 2021
Performance Management 30 September 2020
What the Performance Management Cycle Can Do for You
Dillon Chen

Performance Management is more than the quarterly performance interview or the annual performance review. Contrary to popular belief, it’s actually not any single evaluation meeting, but an ongoing process that allows the employee and company to be in a constant state of growth and improvement.

Continuous Performance Management can be applied to each individual position in the company. The procedure starts when a needed position is created, continues throughout the hiring process, and doesn’t end until the employee is promoted or leaves the company.

This process goes hand-in-hand with Succession Planning. While Succession Planning defines the standards and measurements to be used, Continuous Performance Management is the ongoing process of monitoring and evaluating employee performance to make sure it meets the standards set by Succession planning.

Performance Management often takes the form of a cycle with three parts:

 We’ll be going through each of these steps in-depth so that you can best know how to apply it to your organization.


Performance Management Planning

The first step to any successful management process is, of course, the planning! You should have already decided what the standards and checkpoints laid out from your succession planning. Now, you need to plan out the “how” to achieve those standards and checkpoints.During this process, you need to be able to define the job description and the tasks involved with the day-to-day of each position. Performance Management is about clarifying expectations. Define the expected results, objectives, and performance measurement standards for each position in your succession planning.

As stated before, Performance Management starts before the hiring process even begins. It helps prepare the framework for the hiring process and helps the process go smoothly. Recruiters will be better able to evaluate candidates for cultural fit, find qualities to measure for during performance-based hiring and negotiate terms like salary and benefits when they are armed with the standards needed for the job.


Performance Management Coaching

In the second stage of the cycle, managers evaluate and mentor the employee on a frequent basis. Mentoring shows you are willing to invest in improving employees. It’s important to not confuse mentoring with micro-management during this stage as that can have the opposite of the desired effect on employees and decrease performance.

Through the coaching stage, employees receive ongoing training and education to improve themselves personally and become better assets to the company. Aim to have employee performance achieve desired results for the company.

As managers monitor performance, they can give constructive evaluations as well as advice on problem-solving if needed. Instruct employees on ways they can improve and make them aware of all the resources available from the company.

One of my favorite stories is about a conversation between a CEO and a CFO. The CFO who is worried about employee turnover asks the CEO, “Why are we investing so much into our employees? What happens if they leave us?” The CEO responds, “What if we don't invest in our employees and they end up staying?”

If done properly, Performance Management will raise your employee retention and provide a boost to your company’s culture. Employees will feel valued knowing you have long-term expectations of them, and they will invest themselves more in your organization and feel increased loyalty.


Performance Management Appraisal

This important stage in the cycle is sometimes confused as being the entire process of Performance Management. Some people might think that appraisal is the only step that really matters, but it should be the final concluding step in the process.

Managers have the opportunity to summarize the employee’s performance. Problems that arise with the employee should have mostly been dealt with in the coaching stage as they come up, but the Appraisal stage is where feedback is formalized and reported. It's a great opportunity to recognize their achievements and contributions to the company and make it known to the rest of their coworkers.

It allows you as a manager to identify challenges that arose during the year and plan out employee training necessary to develop the employee in order to overcome those challenges in the future. This is where you reward good performance with pay raises, bonuses, or promotions when applicable.


So the benefits of Performance Management that we have so far are:

  • Improved hiring process: Recruiters know what is expected from candidates and new hires.

  • Employee Growth: Employees receive training and feedback regularly to improve their work and access company resources

  • Increased employee retention: Having a Performance Management system shows your investment in employees and they feel valued

  • Clear feedback system in place: Able to measure performance, plan how to improve for the future, and establish a reward system.

Beyond these listed benefits, Performance Management allows for better overall transparency between the company and employee. The company’s goals are made clear and employee goals can be set to parallel those goals. Job responsibilities and training have more purpose and communication channels are opened with supervisors.

Performance Management also allows for company flexibility and adaptability. If job standards and responsibilities need to be redefined or changed, managers will know right away and be able to adjust the employee’s trajectory.For example, an employee is hired to fill a marketing job. As the employee progresses during the year with coaching and mentoring, managers find that the employee has a good understanding of technology and work with the employee to develop their technical skills with training programs alongside their marketing responsibilities.

Meanwhile, your company finds that its online presence needs a boost. Succession planning analysis shows that this employee would be able to fulfill the new SEO role in your company which the employee is very interested in. This change is brought up and confirmed with the employee during a Performance Management Appraisal and adjustments are made. The employee can happily start down the adjusted career path knowing that their previous training helped them prepare for this role. The cycle then starts over for the new position.



It may take time to implement this into your organization, but once it gets going and everyone is on board with this process, you will find that it becomes second nature. Instead of one annual performance review at the end of each year that is quickly forgotten, establishing a continuous feedback loop around each employees' performance will allow incrementally small improvements throughout the entire year

By implementing the Continuous Performance Management using this cycle, you will see immediate results and long-term improvements to your overall business methods. Start familiarizing yourself with each stage because each step of the cycle is important in the development of your employees and your company.