Strategies for Effective Performance Management

  • Post last modified:20 April 2021
  • Reading time:5 mins read

The performance management is a highly collaborative effort that involves multiple internal and external stakeholders. These are working through how goals and objectives translate into lower level KPIs, which in turn link to front line metrics.

It is only after an organization creates these linkages that alignment can occur. It has been seen that a common thread for any strategy – regardless of industry – is that with time it will somehow change as organizations react to internal and external events.

Therefore, one can also look at it as an evolutionary process that involves everyone working towards a common set of goals and objectives which at some point over in the future will be changed or modified.

Strategies for Effective Performance Management

6 Strategies for Effective Performance Management are:

  1. Supportive leadership and management
  2. Performance Oriented Work Culture
  3. Providing Training and Feedback
  4. Building Participative Environment
  5. Effective Communication Strategy
  6. Benchmarking Best Practices

Supportive leadership and management

The HR professional and top management plays an important role in successful implementation of performance management and at the same time, a supportive leadership and management make the implementation strategy easy and effective.

Performance Oriented Work Culture

An organization becomes successful by developing a real and meaningful culture where performance is one of the core values because work culture drives organizational performance. If the work culture is performance oriented, it means launching a variety of improvement efforts, including designing high-performance work systems.

Providing Training and Feedback

To enhance the performance of employees, training is an important tool. Every employee should get proper training and timely feedback.

Building Participative Environment

This is the need of the hour that the organizations should introduce a participative work culture where both the managers and employees can discuss their views.

Furthermore, the involvement of employees is also crucial but it should be handled carefully. In any organization, inviting managers and employees to assist in the development of the system facilitates their buy-in, and enhances their trust, understanding, and ownership of the performance management system.

Effective Communication Strategy

Ineffective implementation of performance management, communication is one of the most important factors. It provides feedback of work performance, clarifies all the important aspects related with performance management.

The whole process facilitates the buy-in from the people in the organization without which performance management is less likely to be successful. In the organization, there should be effective communication of performance objectives to all the employees and it should be done properly.

The performance-oriented work culture encompasses the following characteristic features:

  • The quality of work challenge, interest, achievement, freedom and autonomy, workload, quality of work relationships in the organization.

The performance-oriented work culture encompasses the following characteristic features:

  • The quality of work challenge, interest, achievement, freedom and autonomy, workload, quality of work relationships in the organization.

  • Work-life balance supportive environment, recognition of life cycle needs flexibility, security of income, social environment etc.

  • Future growth opportunities learning and development beyond current job, career advancement opportunities, performance improvement, and feedback system.

  • Tangible rewards competitive pay, good benefits, incentives for higher performance, ownership potential, recognition awards and fairness of reward.

  • Enabling environment caring attitude, encouragement for risk-taking and acknowledgement of failure without fear, knowledge sharing and instilling ownership among everyone.

SMARTER performance objectives mean:

S – performance objectives must be specific
M – performance objectives must be measurable
A – performance objectives must be attainable
R – performance objectives must be realistic
T – performance objectives must be time-bound
E – performance objectives should be exciting
R – performance objectives should be recorded

Benchmarking Best Practices

In order to be more competitive the organizations need to continuously improve their performance, and benchmark against best practices in performance management. If the organizations want to undertake benchmarking, they can equip themselves with insightful and measurable information on improving organizational performance.

The organizations should freely share with their employees such benchmarked information, so as to create a role model to emulate, which is appropriate for the organization.

The other key strategies for effective implementation of performance management system are as follows:

  • Relying on Objective Assessments
  • Adopting Performance Management Policies
  • Honesty and Transparency
  • Encouraging Participation without Punishing Poor Results
  • Incremental Improvements
  • Dedicating Staff and Resources
  • Clearly Defining Organization Direction

Factors Affecting Performance Management Implementation

The factors affecting effective use of performance management are given below:

  1. Corporate culture
  2. Skilled Staff
  3. Leadership and Commitment
  4. Alignment
  5. Ongoing Monitoring and Mentoring
  6. Effective Communication and Reporting
  7. Employees Participation
  8. Reward link Pay

Corporate culture

It is the culture of the organization on which the implementation of a performance management system depends. The corporate culture should be such that it encourages team working, ownership of problems, risk-taking or entrepreneurship, and orientation towards continuous improvement.

Skilled Staff

The dedicated, knowledgeable and skilled staffs required in performance management.

Leadership and Commitment

The leadership and commitment are very much required and it actively supports and sustains performance management throughout the organization.


It is a must condition that the alignment of individual goals and strategies with the organizational goals because it helps in the effective implementation of a performance management system.

Ongoing Monitoring and Mentoring

In a performance management system, a continuous review of the strategy is very important. It should be used for improvement and learning, rather than control.

Effective Communication and Reporting

It is very essential for organizations to have ongoing communication and reporting of performance and feedback.

Employees Participation

Employee participation plays an important role in implementation of PM system. The involvement of employees in the selection and definition of measures can reduce the employees’ and the manager’s resistance to performance management, and increase their usage level of performance measures.

Reward link Pay

If the reward will be linked with pay, it improves the employee motivational level and affects the performance of employees.

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