3 Key Benefits Of Performance Management

A strong performance management system supplied by International HR software companies, provides many benefits to individual employees, managers and the company as a whole. It ensures achievement and the correct training, while helping people to move up in their careers in a way that suits them. An effective performance management system can play a vital role in any organisation – here’s a guide to performance management systems and three key benefits you may not have considered. 

What Is A Performance Management System?

While there’s no law in place that states that companies have to conduct performance reviews, they provide a great deal of benefits to companies that include them in their practices. A few of

these business cases include the opportunity to document salary actions, providing feedback to employees about their recent performance, documenting personnel decisions and helping management to determine the members of staff that are staying in the company and those whose contracts are being terminated. Performance management is about more than just a traditional appraisal though. It delivers ongoing communication among staff and employers and helps everyone to have a clear understanding of expectations. It also allows for the chance to regularly review results in a way that a yearly appraisal can’t manage, as often too much time has passed between the projects or achievements and the review itself. 

There are a number of benefits to a performance management process, but we’ve identified three of the main advantages of a robust performance management process. These include:


For success as a company, it’s critical that every member of the organisation is motivated. But it can be difficult to stay motivated in your role if you’re unsure how you’re performing and where you need to improve. A performance appraisal gives both managers and individuals chance to identify areas where there have been great successes and areas that didn’t go as well as expected. Each employee will realise that the organisation rewards achievement and that it is noticed by senior members of staff, which is a motivating factor to improve their performance going forward. 

Organisational Impact

Performance management has an impact on the wider organisation too. Studies into human behaviour have found that individual employees will grow more mature and take on more responsibility if their efforts are properly assessed and rewarded. But in turn, the company will see daily benefits, both in terms of productivity and from a financial perspective, by having a more responsible pool of staff working for them. An effective and accurate evaluation system helps to determine the areas where employees can take on more responsibility, as well as identifying the skills they need to develop in their role. If done well, a performance review can help to understand the career ambitions of each employee and this can be an important part of a succession planning process for the business.

Open Communication

A performance management process provides the perfect platform for managers to discuss issues with their team, whether that’s positive or negative. Managers are often busy on a day to day basis with their own responsibilities, and it can be all too easy for these types of conversations to fall by the wayside as a result of a busy workload. But communication between managers and staff is vital to coach them and offer work-related feedback, as well as for individuals to raise their own thoughts or concerns. What’s more, these conversations are all documented so it’s easy to track the performance and developmental journey of each employee, so that new managers who join the company can get a sense of everyone’s progress. 

HR teams should assess their performance management processes and have objective goals which are tied to the strategic ambitions of the business. In assessing and regularly reviewing each team member’s performance, it will be much easier for companies to make decisions and work towards their goals, with the best team behind them all the way. Successful businesses understand that in order to achieve initiatives, everyone needs to be fully trained and skilled in their specific roles to work effectively as a team. A performance management system is the best way to ensure that staff grow in their careers, while also identifying under-performers who could be slowing things down.