How a Performance Management System Can Help Your Team


Businesses are never satisfied. They can’t be. The moment they sit on their laurels, another company comes by and swipes those laurels right from under them. Therefore, any long-term success in business is the result of systematic efficiency assessments, for both processes and team performance.

Evaluating processes and employees by performance is not a simple task, so many companies employ a performance management system to cover all the bases. Setting up a system is ideal because it’s not just about figuring out how you’re performing; it’s also about obtaining clear and actionable metrics, where those metrics can be tracked and analyzed with a project dashboard, tracking template or a basic spreadsheet.

The benefits of tracking those metrics and applying a performance management system will become clear as we define the process and its use. Often, it can help an organization enhance its effectiveness and strengthen its position in the marketplace.

What Is Performance Management?

Performance management is a method for systematically evaluating employees in an organization to determine their effectiveness in carrying out their tasks and achieving the goals and mission of the company. It is not an after-the-fact evaluation, but rather an ongoing process that runs alongside operations to enhance performance.

The following is the process that makes up performance management:

  • Plan: Plan the work of your employee and set expectations, so you have a baseline of what is needed from everyone on the team.
  • Monitor: To see that those expectations are being met, monitor the performance on an ongoing basis and measure if it’s meeting predetermined goals.
  • Develop: As the employee meets, exceeds or falls short of these goals, offer to develop their capacity to perform as needed.
  • Rate: The employee shouldn’t be left in the dark, of course, and therefore a rating system is created and shared with the team member to offer regular performance reviews.
  • Reward: Offer incentives for good performance by providing some reward or benefit to team members that meet or exceed the expectations set for them.

Start Performance Management Process Early

Most performance management systems need to start before the employee has even been hired. Here are steps to follow before an employee joins your team:

  • Recruitment: Begin with a clear job description and posting.
  • Candidates: Interview those candidates that potentially fit the job description and will be complementary to the team.
  • Interview: Use the interview process to narrow down potential candidates through the criteria you created for finding the right recruit.
  • Meet: Once you have narrowed down a selection, have managers meet with the elite candidates to evaluate strengths, weaknesses and their ability to evolve to the demands of the position.
  • Select: Once you’ve done the due diligence, it’s time to apply a selection process to identify the right candidate, with the best fit.
  • Negotiate: Once you’ve made your selection, negotiate salary and benefits, so that both parties are clear on performance expectations.
  • Welcome: Now that it’s official, welcome the new hire and make them feel welcome.
  • Training: Offer continuing education, mentoring and other avenues to help them integrate into the organization.
  • Feedback: Continue the training as needed, but don’t neglect to get feedback to further their coaching and to understand what they need from you to succeed.

How to Implement a Performance Management System in Your Organization

A performance management system helps you develop a method for accurate and effective performance reviews that can help assess where performance stands, as well as provide a roadmap to where you want to go. Follow this guide to make the implementation as seamless as possible.


The more you invest upfront, the better results you get. While it might seem labor-intensive, the work you do beforehand is going to pay off later.

Create the System

This applies to the process you go through, outlined above, in terms of selecting the right candidate for the job. Make sure you have a clear outline of the job duties and responsibilities. Define performance goals and outcomes, prioritize those responsibilities and define the standards they’ll be measured against.

Create a Review

Schedule a meeting in which the performance plan will be explained, and respond to any questions. Provide a self-assessment form, and document all feedback. When meeting to discuss performance, have all personal performance review paperwork and note where the employee stands compared to set expectations. Have answers and examples prepared for questions.

When You Meet

Make the environment comfortable and private to foster a professional and cordial discussion. Begin by discussing and agreeing on the objective of the meeting. Start positive, relating met goals and progress.

Ask the employee to speak about areas of improvement, then offer ways they can further develop their performance. Supervisors should add their comments on performance, and both parties need to reach an accord. Then go over their responsibilities until the next meeting. Set goals, and agree on them.

However, if the performance falls under par, create a written plan for improvement, and note the consequences if these goals aren’t met. Then both parties sign off on the paperwork. End on a positive note, and schedule the next meeting.

After the Review

If you choose to write up a performance improvement plan, then it’s necessary for you to meet again periodically to make sure that they’re meeting the expectations outlined. Even if the performance review was satisfactory, it’s good to follow up to give and get feedback, so the employee isn’t blindsided by something unexpected at the next meeting.

Also, be sure to keep your end of the bargain up, if it was agreed to allow the employee a development plan, paid time off, payment for courses, etc, then follow through on those commitments. Also, be sure to forward documentation to human resources.

How to Keep the Process Effective and Fair

Performance management isn’t always looked at as a great way to assess employees. According to the McKinsey Quarterly, more than half of the respondents surveyed said performance management has not had a positive effect on performance.

Some complain that the feedback they receive is biased or just unrelated to their job. That might be because for some managers the process has become a bureaucratic, box-checking exercise. Employees think it’s unfair, and managers find it ineffective.

The issue with fairness is often tied to how the employee perceives the process. It’s crucial that you impress upon them the fairness of the performance review, that it’s a process equally applied to all, and yet it considers the specifics of their job.

Therefore, be transparent when you talk about how the goals you’re setting for employees are linked to the overall priorities of the business, without becoming too rigid. Invest in coaching skills for managers, so they can handle the review more diplomatically and not make matters worse by accident or design. And, of course, always reward outstanding performance.

By staying proactive with the process and not following it blindly by rote, you’re going to get buy-in from the employees, and you’ll find that criticisms of the process being unfair will diminish.

Software Can Help

That’s the template for performance review, but you’ll also want tools to help facilitate the process. This is especially true for monitoring the performance, so you have hard data to back up whether that employee was performing at, over or under par.

Some cloud-based project management software has features like a real-time dashboard. The dashboard is a set of graphs and charts that are always being updated with the most current data to reflect the progress of tasks, projects and team members.

You can set up metrics to track any aspect of the work you want. The team member can update their status online, which is then instantly reflected on your dashboard. From there, you can filter the data to focus on just the measurements you want. The charts and graphs are also easy to read and can be shared or printed with just a click of the keyboard. Performance management systems can be implemented with accuracy and ease with this kind of instrumental data.

If you’re looking to run a performance management system, then get ProjectManager. Our cloud-based software gives you a real-time dashboard to accurately track team performance and easily print or share reports to back it up. Try it free today by taking this free 30-day trial.