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Performance management should be addressed in organisations. It's a shame, as performance management can significantly impact performance and employee retention. And it can greatly impact women, who tend to be under-represented in management roles.

But performance management is not all about results. Much thought and effort go into best practices in performance management that can help employees work more effectively together and boost employee satisfaction, retention, and performance goals. In this blog, we'll cover the essential performance management best practices you should keep in mind when managing an employee's performance.

Why performance management best practices matter

  • Performance management helps ensure that your business meets its objectives and goals.
  • It identifies areas of performance that can be improved, such as employee performance, organisational performance, and financial performance.
  • It provides a system for tracking key performance indicators (KPIs) and performance goals.
  • This helps stakeholders stay informed about their performance relative to overall goals and targets.
  • By monitoring individual performance, you can identify problems before they become serious.
  • This process helps employees to develop their skills and abilities and work toward their potential. It also helps the organisation build its capabilities and plan for the future.
  • Performance management also helps employees improve their work processes and make improvements based on feedback from customers, peers, management, and other stakeholders.

You can never communicate too much

Communication is critical to effective performance management. Good performance management requires regular and frequent communication between all involved parties, from top management to employees at all levels. To ensure that everyone understands an organisation's goals and objectives, performance management teams must communicate performance results and progress regularly and clearly. Communication is vital in ensuring that people understand their work's results and make changes if necessary.

Communication can also help performance management teams resolve misunderstandings and build trust with each other. While performance management is critical to organisational success, it must be done effectively. Performance management best practices require communication between all members of the performance management team, from top management to individual employees.

Use agile goals and OKRs

Agile goals and OKRs are best practice performance management tools that help organisations track and measure progress against desired outcomes. By using them, organisations can tailor their performance management to the current needs of the business. Agile goals and OKRs are typically based on key performance indicators (KPIs), such as employee, revenue, or cost-reduction metrics. 

They are designed to be flexible, allowing organisations to adapt their performance management processes to achieve success. However, implementing these tools correctly is essential to their success.

Invest in a performance management system

A performance management system can help you track and assess employee performance. A sound performance management system will include key performance indicators to track key business results and progress, as well as goals and objectives for individual employees. It will also include mechanisms to review employee performance, such as appraisal and feedback processes. 

In addition, an exemplary system should allow managers to identify and address workplace issues. A good design can help you make informed decisions about rewards and incentives by tracking employee performance.

Optimise your compensation plans

Performance management best practices can help organisations eliminate performance bottlenecks and ensure that employees are consistently delivering high-quality work. One essential best approach is to use a performance management system to track employee performance and progress against goals and metrics. 

This can help organisations identify areas for improvement, determine employee performance targets, and reward employees for exceeding performance goals. Another best practice is to develop a payment plan for employees who consistently exceed performance targets. 

This can be used to motivate employees and provide them with recognition for their efforts. In addition, effective compensation plans should be designed relatively and equitably, taking into account employee skills, experience, and tenure. You can achieve better results for your organisation by optimising your performance management best practices.

Optimise your onboarding and offboarding processes

A performance management system is a crucial tool that helps ensure that employees are up to speed on company expectations and policies and work within the boundaries of the organisation's strategic goals. It is crucial to conduct thorough performance reviews and evaluations at the start and end of every quarter to identify strengths, weaknesses, and opportunities for improvement. 

These reviews help managers determine which employees need additional training or coaching and can help them tailor their feedback to the individual's level of performance. Once an employee has been onboarded into the team, a performance review can ensure that they are consistently delivering quality work.

A well-designed onboarding process can help new employees feel comfortable and productive. This process should involve introductions to key team members, a review of company policies and procedures, and an overview of how their work will be relevant to the organisation's broader goals. 

It must also include some onboarding training, such as seminars or webinars aimed at helping new hires understand their new responsibilities and the best way to perform their job. Poorly implemented onboarding processes can often lead to high turnover rates among new hires.

Top performance management trends for 2023

1 in 3 employees prefer weekly 1-on-1 conversations

Effective performance management is crucial for employee engagement and satisfaction in today's globalised and fast-paced work environment. 1 in 3 employees worldwide want weekly 1-on-1 conversations with their manager to improve their work performance. As a result, companies must create an environment that supports continuous learning and development.

Employees can learn about their strengths and areas for improvement through performance management conversations and other feedback channels such as performance reviews. These conversations help create a continuous learning and development culture that keeps employees engaged and motivated. 

Additionally, performance management conversations can facilitate the development of organisational goals and strategies, leading to improved business results.

Continuous 1-on-1s are associated with elevated engagement levels

These one-on-one conversations allow managers to get feedback and input from employees regularly. This helps ensure that employees are always up-to-date on their work performance and development goals. Continuous 1-on-1s also help managers implement clear and timely feedback, which can help boost engagement levels.

In addition to one-on-one conversations, a performance management system tailored to an individual company's needs can significantly improve engagement levels. To engage employees effectively, managers must have a transparent performance management system that defines each team member's objectives, metrics, and goals. 

Managers should also implement best practice systems such as performance management software or POM (Ongoing Performance Measurement) that allow them to track employee performance in real-time.

Hybrid and remote workers prefer to have more frequent one-on-ones with their managers

A key trend in performance management is the increased demand for more frequent one-on-ones with managers. This is especially true for hybrid and remote workers, who prefer having regular one-on-ones with their managers to improve communication and collaboration. 

The demand for more frequent one-on-ones will likely continue as businesses explore new ways to improve performance. The increased engagement between management and their employees can benefit businesses in many ways, including improved coordination and teamwork, ultimately resulting in improved performance.

Managers should take note of this trend and adjust their performance management strategies accordingly to best address the needs of their diverse workforces. Companies can improve their overall performance and organisational success by identifying the best performance management practices for each employee population.

Frequent and collaborative goal-setting is associated with higher employee engagement levels

Frequent and collaborative goal setting is associated with higher employee engagement levels. Engagement levels are essential because they directly influence employee motivation, productivity, and satisfaction. Highly engaged employees are more likely to be productive and satisfied with their work. 

In performance management trends for 2023, organisations are increasingly using data analytics to improve decision-making, leading to the use of goals more tailored to individual performance. 

Recognition, fairness, feedback, and alignment are the top drivers of employee engagement

Performance management is an essential part of any organisation's strategy for success. The critical performance management trends for 2023 include recognition, fairness, feedback, and alignment. Each movement has a specific role in ensuring employees are engaged and productive. 

It is crucial for a performance management system to be effective, and to do so, it must be based on clear goals, metrics, and metrics-based feedback. Besides, it must be fair and transparent in its process and provide employees with clear expectations and goals. To ensure that your performance management system is effective, it's essential to understand the drivers of employee engagement.


Performance management best practices help you manage performance and goals effectively. They ensure that performance management systems are effective, balanced, and efficient. With a performance management system in place, employees and managers can set goals and track progress toward them. You can also create employee work plans, appraisals, and feedback processes that support employee development. 

By following the best performance management practices, you're on your way to boosting employee engagement and performance satisfaction. 

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