What are the Benefits of Performance Management?

Malcolm Tatum

Performance management is an essential tool in business management today. Management activity of this type makes it easier to evaluate the productivity of individual employees as well as entire departments. As a result, the company will function more efficiently, keep overhead low, and has a better chance of succeeding. There are many benefits of performance management that have a direct bearing on the day-to-day operation, which in turn makes the overall picture for the company much brighter.

Performance management can be used to establish reasonable expectations that are understood and supported by both employer and employee.
Performance management can be used to establish reasonable expectations that are understood and supported by both employer and employee.

Because performance management processes tend to focus on what is actually being accomplished rather than on the behavior and apparent activity generated by an employee, the danger of personalities influencing productivity are decreased. Assessing the performance rating of an employee becomes more of a task of noting how well he or she functions within the scope of his or her responsibilities as indicated by following established procedures and producing the amount of work expected within a given point in time. As a result, the employee is less likely to feel singled out because he or she is less social or possesses some physical characteristic that would lead to criticism in other settings where the benefits of performance management are not as well understood.

This same aspect of using performance management tools comes into play when dealing with problems within the operation. Rather than focusing on the behavior of an irate employee, performance management processes call for concentrating on the issue that caused the employee to be upset. By taking personalities out of the equation, it is often easier to assess the true nature of the problem and find a solution that will restore peace and productivity to the business, without any employee feeling as if he or she were slighted or overlooked in the process.

Another of the benefits of performance management has to do with the establishment of reasonable expectations that both employer and employee fully understand and support. One of the common issues in many workplaces is a lack of communication between those who manage and those who are assigned specific tasks for which they are accountable. By taking the time to make sure everyone is on the same page regarding rights, responsibilities, company goals, and departmental procedures, a great deal of frustration is removed from the work environment. This more harmonious setting makes it much easier to achieve maximum productivity.

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One of the most important benefits of performance management has to do with developing responsible ways to measure productivity levels and compare them to the goals of the company. By using such tools as performance management software to help employees understand how important their roles are to allowing the company to reach a specific goal, there is less of a chance that employees will consider their tasks unimportant or unappreciated. As they come to understand how their work adds to the whole, there is also a better chance they will take pride in what they do, even if some of the tasks are repetitive.

The benefits of performance management go far beyond assessing the skill levels and compliance of an employee. They can also help to make sure employees feel free to discuss matters of importance with managers, that both supervisor and employee can exchange opinions without taking criticism personally, and that each employee has the tools on hand to be successful in the workplace. Because performance management is an ongoing process, managers should make use of the essentials of this management tool each and every day, not just when an employee is up for a performance review.

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Discussion Comments


Good article on performance management. Taking personalities and physical characteristics out of the equation creates a fair playing field.

Employee performance should be fact/data based for reliable measurement. We use software at our business called ManagePro that helps to measure projects and goals as well as employee performance.

Thanks again for the article.


Sunshine31- That is really true. I want to add that organizational performance management can also be made easier with the use of software.

A company by the name of Pacific Data Marketing provides human resource management software that automates the employee appraisal program.

The Talent Management software program that they have provides the employee’s history, salary, training, and goals to the employee's manager.

This paperless system allows each subsequent manager to approve the appraisal with just the click of the mouse. The paperless system also keeps the employee data more secure and private.


There are a lot of advantages of performance management. First, performance management is based on the employee’s objectives.

The employee is made aware of what satisfactory performance should look like as well as what exceptional performance should look like. Since the employee is aware of what the minimum goal is, they will also know when they are underperforming.

The concept of performance management creates an objective way to measure employee performance. The benefit of a performance appraisal allows the employee to receive valuable feedback regarding the work performance only.

The feedback is objective and is based on the work performance, so most employees do not take offense and actually improve their productivity as a result.

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