Performance Management System Objectives

One of the most important aspects of an organization’s performance management system is having a purpose. This is the reason why companies have to set the system up in specific ways, or else employees in the organization won’t see it as an essential component of their day-to-day responsibilities.

When their superiors are not continuously setting and communicating performance goals, employees will feel useless, unmotivated, and unproductive. It is for this reason that companies need to dedicate a great deal of resources to performance management systems objectives.

Performance management is a company’s tool for managing performance, which will lead to the achievement of the organization’s strategic goals. The main objectives of a performance management system is to help an organization encourage, motivate and reward its employees in such a manner that they will work at peak efficiency and produce the best results.

In order to achieve this objective, organizations have devised performance appraisal systems.

Performance Management System Objectives Process

This section will go in detail about how the objectives of performance management system is set up across the entire organization.

The activities included are:

  • Setting goals and objectives,
  • Reviewing employee progress toward achievement of goals and objectives,
  • Making progress reviews,
  • Seeking feedback

Setting Goals & Objectives

Performance management system objectives are the steps a company uses to manage their employees. The first step of implementing a performance management system is setting objectives or goals that would be beneficial to the company and based on what the company wants to achieve within a period of time. These can include such things as:

  • Increase in sales
  • Decrease in costs
  • Better product quality
  • Fewer errors/improved efficiency
  • Increased teamwork
  • Customer satisfaction

The second step in implementing performance management system objectives is establishing an evaluation procedure which will determine how effective a person is meeting the objectives. There may be several ways to evaluate each objective, but there should only be one primary method. For example, if an employee’s objective is to increase sales and an individual’s evaluation procedure is based on sales alone, it could have a negative effect if the sales associate does not have good people skills and is unable to make customers feel comfortable about buying the product.

In addition, performance management system objectives should include methods of measuring progress towards achieving them.

Reviewing employee progress toward achievement of goals and objectives

The performance management system is an integral part of a successful HR administrative system. The first step in setting up a performance management process is to define the objectives of the system and determine the best process for your organization. An effective performance management process creates an environment that encourages employees to:

  • Be proactive in achieving their goals and objectives
  • Be accountable for their actions, results, and behaviors
  • Be active is seeking feedback from their manager regarding their performance
  • Be committed to continuous improvement and self-development

The objective of the performance management system is to help people achieve the goals set by their supervisors. It also aims to improve the organizational effectiveness and efficiency by improving the productivity and performance of each employee. The system will also serve as a tool for managing workflow, employee growth, job enrichment, and career development.

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Establishing Effective Communication

Communication is critical, especially now, when so many workplace dynamics are evolving to meet new needs or adjust to external situations. When a strong organizational culture is devoted to clear, effective communication, the consequence is a motivated workforce that has linked its individual goals with the company’s broader goals.

Transparency is an important part of efficient communication; employees should know what other ongoing projects their peers are working on. A team that lacks communication will eventually lack the cohesion that any high-performing team needs. Consider the following suggestions for creating a communicatively engaged environment:

Team leaders, or managers, should take sufficient time to indulge in one-on-one interactions with their team members; regular touch-points and contact.
To build a workforce with varied skills that fosters further career development, continuous feedback and coaching are critical. This can be done through performance reviews, or 360-Feedback resources.
Set and conduct regular team building activities
Promote and encourage collaboration and communication among team members, and as an essential part of the workplace culture.

Promote and encourage collaboration and communication among team members, and as an essential part of the workplace culture.

Determining training plan

As it is important to fuel our vehicles for better efficiency, it is highly important to upskill your employees in order to perform with better efficiency. From amongst the practices prevalent in the industry for recruiting talent which is Build-Buy-Borrow, what could be more cost-efficient than cross-department training. This ensures the skill available within the organization is shared with a larger talent pool. This ensures the knowledge is not vested in only one/few talents rather the talent pool is larger. This also ensures lower dependency and identifies talent and better means of engagement and recognition.


The performance management system has a number of targets to achieve.

  • Present an objective picture of each employee’s strengths, weaknesses and potential to decide on the development areas they have to improve on.
  • Help employees through their career development and make sure they reach their full potential to ensure that they can help the organization better in any way possible.
  • Provide a mechanism for employees’ feedback and suggestions. to voice out any issues hindering their progress or affecting their motivation in the workplace.
  • Aims to create a reward system for employees who excel in their jobs.

Making progress reviews

Before you put an employee in for a performance review, you need to know what you’re trying to accomplish and make clear objectives.

The objectives should be based on the job description, the company’s business plan, and any other documents related to the job and its expectations. The goals may be subjective but they should be specific enough so that everyone understands them.

Let’s say that your employee is supposed to increase sales by 10% by year’s end. If this objective isn’t specific enough, it might not be measurable and it could cause a great deal of confusion for your employee.

Instead, break down these objectives into smaller objectives that are specific enough for everyone involved to understand what needs to happen. And don’t forget to include how success will be measured. This helps eliminate ambiguity and makes it easier for everyone to see if the objective has been achieved or not.

Then, set a timeframe for each objective so there is a time limit on each goal. For example, if your objective is to increase sales by 10% by year’s end, then have smaller objectives that can be achieved throughout the year to reach the overall target.

The next step is to review your performance against those objectives. This is where you might be given feedback as to whether you have been successful or not, or what you could do better next time. But the important thing about this kind of review is that it allows for a steady and continuous improvement of skills, rather than a sudden shift from good to bad or bad to good.

Seeking feedback

A performance plan is a process of self-assessment that an individual, group, or organization conducts to identify specific behaviors and activities to improve performance. It is a document that details the areas needing improvement and provides action steps to achieve those improvements used by managers and supervisors to help direct employees toward greater performance.

The PIP process can be very helpful in improving the employee’s performance, but it does not have to be punitive. It should not be used as a way for management to “catch” an employee doing something wrong or as a chronic problem solver that forces incompetent employees into better performances without providing them with better tools or resources. Instead, managers should use this tool as a way to give employees positive feedback on their strengths while simultaneously identifying areas they need to improve upon so they can develop new skills or work habits.


Each objective should be clear and short. It should not take up more than a page in your performance management system objectives document. It is vital that the objectives are stated in such a way that it is easy for the manager to understand them and easy for the employee to perform them. Your organizational culture will largely determine your needs when establishing performance management system objectives.

Also Read – Benefits of PMS

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