Developing a Performance Management System

Managing and rewarding performance isn’t something you can wake up one morning and decide to do. The system used to manage the performance of your employees must be carefully constructed and include several important checkpoints.

First, it’s important for your employees to have a clear understanding of what their job expectations are. This means giving them a set of specific job duties, preferably in writing, and clearly outlining what is expected.

You should then, at regular intervals, give your employee feedback about his or her performance. You should never wait until it’s time to conduct an annual review to give this type of feedback. Give your employees feedback as they work so that they can easily make adjustments to enhance their job performance.

There should be points within the review process in which you are able to give your employees advice or guidelines for improving their job performances. This may mean recommending additional training or encouraging someone to take continuing education classes. Don’t forget to document your recommendations.

Finally, it’s important to reward great performances. You should have an incentive plan in place, whether you are merely giving out raises at the time of the annual review or adding additional bonuses or prizes along the way.

Make sure you include each of these steps as you develop your own performance management system. The methods you use to implement each of these steps is up to you and can be tailored to the needs of your department, but make sure you don’t skip any of them completely. Managing performance is critical to the success of your department, but everyone needs to be on the same page. You can only accomplish these goals with a solid plan.

Do you have a formal performance management system? Does it include each of the four steps outlined above? What do you think might need to be changed to make your system more effective?

Thanks again,


Sean McPheat

Managing Director

MTD Training   

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Updated on: 12 February, 2009

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