What is Performance Management. How important is performance management?

 » Performance Management »  What is Performance Management. How important is performance management?

Performance management is a strategy within the management of people who have the greatest influence on the company’s results. And implementing it may be what was needed to achieve the organization’s goals and objectives!

This is because performance management acts directly on the performance of each employee of the company, identifying their points of improvement and working to transform them into strengths.

This factor makes the business more sustainable, that is, producing more with the resources it already has, avoiding necessary expenses.

Despite its importance, many companies still believe that they are not yet ready to implement performance management. But is this strategy really too bureaucratic?

After all, what is performance management? What is it for? How to do performance management? It is about these issues that we will talk in our article. Keep reading!

What is performance management?

Performance management is a people management strategy that aims to make a quantitative and qualitative analysis of the performance of employees on their activities to better direct them to the desired results.

For this, it is necessary to prepare goals properly, align expectations with employees and make an assessment of their performance.

Alignment with each team member is essential for performance management to be applied correctly. In this way, it is possible to ensure that each employee knows exactly what and how to achieve these goals.

Without this aspect, employees’ performance will be based on adjacent issues, making their assessment distant from reality.

Don’t confuse performance management with performance appraisal!

Although the two nomenclatures are similar, they have very different meanings in practice.

Performance management is understood as a structured process of people management that begins with the definition of goals, goes through alignment with the team, until performance analysis.

Performance evaluation is one of the steps in the process. This is a tool that makes performance management viable, since it is its application that leads managers to understand the performance of each team member.

Reading this article is very important, and as you will see later, this worksheet will be very necessary to implement performance management. So, be sure to check and download the spreadsheet, okay? So, you will be able to apply this strategy with adequate resources.

How important is performance management?

Performance management

Any company that wants to promote a true competitive advantage should start by “organizing its home”.

This means that all processes must be in synergy and that the team has the right tools to work with. But, above all, that its employees are in harmony with the strategic planning of the organization.

At the end of the day, it’s your team that brings results. They are on the front lines, making it all happen. Therefore, they represent the most fundamental gear to keep this machine running.

That’s why dedicating yourself to an employee-focused strategy like performance management is crucial to elevating your competitive edge and getting ahead of the competition.

It should be noted: performance management is cyclical, that is, it must be applied continuously. As soon as one goal is achieve, dedicate yourself to a new one. This will increasingly reinforce your results and your competitive edge.

In addition, performance management also provides advantages such as the ones we will discuss below.

Retaining talent

Performance management is a strategy that is applied to each person individually. This attention to employees generates a very important feeling for productivity: belonging.

Employees who feel that their efforts are not even being observed show difficulty in believing that the company’s goals are worth pursuing.

On the other hand, performance management develops more capabilities and skills of employees. In this way, they continue to be increasingly indispensable for the organization, a fact that provides opportunities for professional growth and, therefore, satisfaction.

This reduces the company’s turnover rates, a very significant point to maintain the sustainability of the business.

Furthermore, retaining talent also helps to reduce hiring expenses and, if necessary, hiring is more assertive.

Raises the company’s reputation

Positive results and motivated and satisfied employees are elements that enhance your company’s reputation. In addition to being able to attract the attention of investors, it also attracts qualified talent that can add a lot to the organization’s goals.

With a positive reputation, a company can:

  • have greater recognition.
  • stronger relationship with partners and employees.
  • work with more transparency.
  • enable new businesses.
  • develop greater authority in the market.

More assertive goals 

Have you ever stopped to think if your goals are being built realistically? This could be the reason why your employees are not complying with them, if that happens.

It is often difficult to make this diagnosis. But with performance management it is possible to make a comparative analysis with the performance of employees and understand if the goal is really an issue.

This motivates a reflection on this data and allows the elaboration of more pragmatic goals.

In the infographic, check out 4 essential tips to hit your goals:

Improves the organizational climate

Nothing better than a motivated and synergistic team to make the organizational climate lighter, right?

Of course, there are external factors that influence this, but when your team is performing this way, the environment tends to get lighter. Which, in turn, also contributes to employee satisfaction.

Evolve customer relationship

After all, how can performance management be link to customer relationships?

Simple: a team that knows exactly what needs to be done is prepare to deal with different situations that may arise. That said, the customer can enjoy more assistance and clearer guidance.

Therefore, your customer is more satisfied and the chances of retaining him increase considerably, which also contributes to the more sustainable development of the company.

How to do performance management?

Given all these benefits, it’s easy to want to implement it, right?

Performance managements is really very attractive, but, as we mentioned at the beginning of the article, many companies believe that performance managements is too bureaucratic, or that it is something more complex and entrepreneurs do not see their business prepared to embrace this strategy.

However, all this is not true.

The complexity of implementing this strategy varies according to the size of each company, but it can be very practical.

And with the performance evaluation worksheet that we provide it will be even easier to put it into practice.

For this, 7 steps are necessary. Are they:

  1. Set an objective
  2. Communicate the leadership
  3. set the goals
  4. If necessary, train your team
  5. Conduct a performance review
  6. Give feedback.
  7. Start the cycle again.


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