Performance Management Cycle

03/07/2021 0 By indiafreenotes

The performance management cycle is a part of the performance management process or strategy, it is shorter and utilizes a continuous four-step procedure of planning, monitoring, reviewing and rewarding.

Benefits of utilizing this method include increased competitiveness, more structural flexibility, and higher employee motivation.

Performance management involves much more than just assigning ratings. It is a continuous cycle that involves:

  • Planning work in advance so that expectations and goals can be set
  • Monitoring progress and performance continually
  • Developing the employee’s ability to perform through training and work assignments
  • Rating periodically to summarize performance
  • Rewarding good performance.


“Planning” means setting performance expectations and goals for groups and individuals to channel their efforts toward achieving organizational objectives. It also includes the measures that will be used to determine whether expectations and goals are being met. Involving employees in the planning process helps them understand the goals of the organization, what needs to be done, why it needs to be done, and how well it should be done.

This involves the overall strategy for the business, but also the personal objectives for all employees and teams, including development goals, specific tasks, targets, actions and behaviors.

SMART goals are:

  • Specific: The goal is clearly outlined, with detailed information such as what is to be achieved, how well it must be done, and why it is important.
  • Measurable: The goal must have a definite and measurable indicator to tell if it has been achieved.
  • Achievable: While the goal should stretch the employee, it should not be so lofty as to not be realistically achievable at all.
  • Relevant: The goal is in line with both the employee’s job and the overall goals of the organization.
  • Time-bound: There should be a definite timeline as to when this goal should be completed.


Monitoring” means consistently measuring performance and providing ongoing feedback to employees and work groups on their progress toward reaching their goals. Ongoing monitoring provides the opportunity to check how employees are doing and to identify and resolve any problems early.

The monitoring will not be as effective, however, if it is only done once or twice during the year. It is advised that management meets with employees on a monthly or quarterly basis to check in on progress, offer help if needed, assist in solving any problems that might have arisen, and adjust goals, if necessary.


Developing” means increasing the capacity to perform through training, giving assignments that introduce new skills or higher level of responsibility, improving work processes, or other methods. Development efforts can encourage and strengthen good performance and help employees keep up with changes in the workplace.

Rating & Review

Rating” means evaluating employee or group performance against the elements and standards in an employee’s performance plan, summarizing that performance, and assigning a rating of record.

This is another opportunity to build a collaboration with the employee. The more involved they are in the other stages of the performance management cycle, the more motivation they will have to continue working diligently to achieve their goals and those of the organization.

If proper monitoring was done, the management will have already have a good idea of how well the employee did during the year. The review is a chance for management and employees to evaluate both the final result and the process itself.


Rewarding” means providing incentives to and recognition of employees, individually and as members of groups, for their performance and acknowledging their contributions to the agency’s mission. There are many ways to acknowledge good performance, from a sincere “Thank You!” for a specific job well done to granting the highest level, agency-specific honours and establishing formal cash incentive and recognition award programs.

The final stage of the performance management cycle plan is the reward. This is a stage that cannot be overlooked, as it is the one that is the most important for employee motivation.

Employees who do not receive a proper reward after a year of striving to meet organizational goals, and succeeding in doing so, will lose motivation for the next year. They might lose faith in their organization, feel that their talents are not appreciated, and begin searching for another job.