What is a performance management system?

A performance management system is a mechanism for tracking the performance of employees

consistently and measurably. It allows the company to ensure that employees and departments
across the organization are working effectively towards achieving the business’ strategic goals.
Successful businesses gain an advantage from having employees better aligned with corporate goals.

Top features of the best performance management systems

Most performance management systems have several different components built into them.

1. Past performance details

This allows managers and employees to review achievements and successes and put the current
performance in context. It also shows how they have performed against their role profile, and gives
set objectives for the year.

2. Feedback mechanisms

A good performance management system includes a section for capturing 360-degree feedback on
an employee’s performance.

3. Personal performance objectives for the future

You and your co-workers will set SMART goals for the coming year, along with agreed actions on
how to achieve them.

4. Ratings and scores

You will be able to assign ratings to your team’s performance, and a good performance management
system will allow the business to customize these options to fit in with their existing performance
scoring process.

5. Development plans

This part of an employee performance management systems allows employees and managers to
detail the expectations relating to what they should work towards and achieve in the future, as well
as capturing any associated information about potential future training needs, promotional
opportunities or other development related topics.