Effective performance management systems typically include the following three broad elements: goal setting, performance review and a performance improvement process. Employers may use a multitude of options in the execution of the performance management process, but an effective system will incorporate the three basic elements in some form.
Goal setting is a process of establishing objectives to be achieved over a period of time. It is the performance criteria an employee will be evaluated against. Performance goals for individual employees should ideally align with organizational goals. Common types of goals include the following:
The Performance review is the process of assessing an employee's progress toward goals. Strengths and weaknesses of all employees are recorded regularly so that the organization can make informed and accurate decisions regarding an employee's contribution, career development, training needs, promotional opportunities, pay increases and other topics. Performance review and evaluation involve the objective and subjective consideration of how to measure and evaluate employee performance results.
Recommendations for an effective performance review process include: