What Is Performance Management? 5 Reasons Why It Matters

Gregg Greenberg

performance managementYour business is growing fast, and it’s time to think about implementing or revamping your performance management process that will create an amazing employee experience and help drive your business forward.

Your employees are your most valuable asset to help your business grow. So what can you do to engage your top talent, help them work smarter, and be more productive? How can performance management help?

What is performance management?

Performance management is more than just an annual performance review. It is a continuous, year-round process where your managers and employees work together to plan, track, and review the employee’s career goals, work objectives, and contributions to your company. An effective performance management process ensures your employees get the ongoing coaching, feedback and development they need to succeed in their roles and deliver the results you need to grow your business.

Why performance management matters

If you ask your friends, family or co-workers about performance management, chances are they will tell you how much they dread the process or how useless it is. If that’s the case, why should your business invest in a performance management process?

An effective performance management process can help you unlock your talent’s full potential and turn your small business into a major threat to your biggest competitors. Here are 5 reasons why performance management matters and how it can improve your bottom line:

1. Aligns strategic goals

A well-designed performance management process helps your employees understand how their work contributes to the overall success of your company’s strategy and goals. This connection makes sure your employees know what is expected to keep them focused on the most impactful activities that provide real value to your business.

2. Drives employee development

Performance management ensures your employees are continuously developing their skills and capabilities, and have the knowledge and experience they need to deliver top performance and success for your business today and tomorrow.

3. Engages your employees

Ongoing employee development empowers your employees to take the driver’s seat for their own performance and career advancement, while contributing to the overall success of your business. The business result of engaged employees is a higher level of employee satisfaction and retention, which means your employees are happier, more motivated to work harder, and less likely to leave your company for your competitors.

4. Encourages performance conversations, feedback, and recognition

An effective performance management process encourages your managers and employees to have regular ongoing conversations about goals and expectations, accomplishments and challenges, as well as development needs. This ensures your employees get the feedback and recognition they need to continue to improve and succeed.

5. Improves your bottom line

When done properly, performance management helps you increase employee productivity, improve employee engagement, and reduce turnover, which ultimately lowers your costs and improves your bottom line.

Learn everything you need to know about performance management with the free Ultimate Guide to Performance Management eBook. Fill out the form below to download. 

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Gregg Greenberg

About Gregg Greenberg

Gregg Greenberg is the Senior Director of eCommerce at SAP. He leads a team responsible for driving revenue of SAP and SAP Partner solutions globally. His areas of focus include Quantitative Marketing, Marketing Communications and Marketing Operations: UX/UI/IA, Paid Media, SEO, Content Marketing, and Marketing Automation.