Need and Importance, Scope of Performance Management

03/07/2021 0 By indiafreenotes

Performance management is a much broader system as it is linked with the processes of planning, implementing, reviewing and evaluating, for augmenting growth and productivity at both the individual and organizational level.


  • Appraisal data can be used to spot flight risks, underutilized, high performing employees or low performing employees who are consistently below standards.
  • Employees and Managers to set goals and track progress with shared tracking tools.
  • Goal tracking throughout the year leads to improved productivity and improved productivity. Managers and employees can work more collaboratively ensuring expectations are set and met.
  • Collect data and allows leadership to make informed, data-based decisions.
  • Automated reminder emails encourage employees to take notes on their accomplishments all year long allowing for improved communication throughout the year and more well-informed appraisals.


Increases Employee Retention

Performance management also encourages organizations to reward and recognize their employees. Lack of recognition is a big reason some employees leave a job and look for another. They want to be appreciated for their hard work. In addition to the clarity, the ability to share feedback, and the additional training when needed, rewards and recognition can play an important role in employee retention.

Provides the Opportunity for Exchanging Feedback

A lack of communication in a relationship is grounds for trouble, and this includes working relationships. Quite often, management speaks to employees about their performance, but employees do not very often get a chance to voice concerns or frustrations. Effective performance management provides an avenue through which both the employer and the employee exchange feedback. In addition to gaining insight, employees often feel much more valued when they can voice their thoughts.

Provides Clarity in the Organization

It is a common problem that many employees are unsure of what exactly their role entails, what is expected of them, and who they are to report to. Through performance management, the company can make all of this very clear. A lack of understanding often leads to a lack of productivity. Therefore, by providing clarity for employees, the result will often be increased productivity and confidence.

It Provides a Look into the Future

By consistently monitoring and managing workplace performance, leaders can see potential future problems. Like with any type of issue, early detection is key. The earlier problems are confronted the less effect that they will likely have.

Helps Create Development and Training Strategies

As mentioned above, the earlier a problem is detected, the better. One of these problems could be that employees do not know how to perform certain processes correctly. If this continues, the organization might fall apart due to oversight. However, with performance management, this would probably be detected. The organization could then create training programs to change the issue into an opportunity for improvement.

Scope of Performance Management

Recognising and Promoting Performance Culture: It is very important that the employees become used to performing better. If the organisation follows performance culture, every employee would be performance oriented and there are minimal chances of dissatisfaction, errors, and wastages among the employees.

Planning Performance Development Activities: To bridge the gaps between standard and actual performance, performance development activities are planned in the organisation. These activities are in the form of on-the-job training, management games, case studies, outbound training etc.

Planning Performance of all Constituents: Performance management activities involve continuous improvement of all the processes and people in the organisation. So, after setting the performance standards, to get the desired results, it is imperative to mould the behaviour and performance of the employees in a particular way so that it generates the preferred output.

Identifying Performance Parameters: When any organisation decides to go for performance management activity, it is very important to decide the parameters of performance, because when the parameters are clear and set, both, the employer and the employees can better understand their role in the activity and can reach to the goal effectively and efficiently.

Creating Ownership: This is one of the most important aspects in the entire performance management initiative. Until and unless the employees feel that they are the owners of their organisation and their smallest leap of step is going to affect the organisation in either a positive or negative way, they will not behave in an expected manner.

Identifying Competencies/Competency Gaps: When we are in the process of moulding the behaviour of the employees, it is important that we understand the competency gaps if any. Gaps are nothing but a space between standard competencies and expected competencies. Once it is identified that there are gaps, these can be healed with the help of training and development programmes.

Setting Performance Standards: Once the parameters are set, the next step is to identify the performance standards. Performance standards are nothing but analysing and finalising the expected level of performance. This is decided in advance so that gaps, if any, can be corrected at the earliest.