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The ideal Performance Management Cycle

The performance management is still one of the most important HR processes. Sure, many discussions are running that the performance management should be abandoned, because the process does not meet its targets. Many companies developed overly complicated performance appraisal scheme that stops the business for many weeks. Additionally, it does not provide useful outcomes. However, a basic performance management cycle should exist in modern organisations.

The effective cycle always start with the business goals. Just when the business goals are set, the manager can set goals to employees. It should not be left with employees, because they do not know the strategic agenda of the company. The employee and manager should also agree the personal development plan that fits the needs of the department, the employee and the manager. The manager and the employee should not start the year with the disagreement; they have to cooperate closely.

The performance appraisal should summarise the year; it should not be a surprise for the employee; the manager has to provide constant, honest and open feedback during the year. The employee should know what will be the outcome of the performance discussion. After the discussion, the consequences should be executed - the training plan and salary adjustments (if they are included in the scheme).

Performance Management Cycle

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