Performance management, in order to be the most effective, should be applied to companies as a whole and employees as well.  According to an article on Wise Geek, performance management is comprised of both analyzing the effectiveness of managers and employees, ensuring that goals are met.  This assists in exceptional company performance as a whole.

The information provided on Wise Geek focuses solely on performance management as it applies to employees.  According to this article, performance management in regards to employees differs between workers because each individual employee may need to improve in specific areas.  Generally, performance management related to employees covers the areas of planning work, setting and achieving goals, being offered learning opportunities by management, rewards for a job well done and feedback or reviews on the performance of the employee.

Clear communication is essential in performance management; employees must know what is expected of them currently as well as upcoming projects or tasks they will be facing.  In order for performance management to be most effective, those in management should always define what they expect from an employee in terms of work accomplished and achieving goals, so that employees are not taken by surprise come evaluation time.

Performance management that includes planning and setting goals also helps in employees being able to predict the consequences of their job performance; they realize that if they do exceptional work and reach goals, they will be rewarded.  They also realize the consequences if they fail to do the job expected of them.  Good performance management involves giving feedback regarding job performance on a regular basis, such as monthly.  This allows an employee to realize how they are doing overall, so that they can make changes if they aren’t up to par regarding work performance or meeting goals.

Offering feedback throughout the year is beneficial to employees; it also prevents them from feeling they are being overly criticized during an annual evaluation, since they have been made aware of critical issues throughout the year.  Providing employees with methods to grow and develop in their position and acquire new skills through more difficult projects and working in a team environment are also elements of performance management.  Employees who are given the opportunity to expand their skills and prove their capability are generally happier employees, which often means they are more productive.

Bonuses, raises and the opportunity for advancement within the company are a huge aspect of performance management.  When employees are given incentives to do their best and take on new challenges, the entire company will benefit.  Employees need to be motivated, to feel that their contributions are important to the success of the company.  Even through criticism, workers grow by learning what they have done wrong, and how they can improve in those areas where they lack.   Its people make up the “whole” of a company, which is why effective performance management is so essential.

John Clarke, CIO of Nokia shares his tips and strategies on how to enhance business performance in this exclusive video interview with Meet The Boss TV.