Steps to an Effective Performance Management Process

Table of Contents

After talking about what is a performance management process, let’s talk about the steps to effective performance management.

Most leaders often downplay the importance of performance management, never making time for it and feeling their employees are too busy to carry out the program. And some feel like it’s too expensive or they just aren’t sure about where to begin, so they just wave it aside.

The traditional performance management is not effective anymore because it is not designed for the current workforce. Today, the nature of work is very different from the past. So, companies must focus on developing their workforce instead of rating them. This is why performance management should change in a company.

Steps to an Effective Performance Management Process

Since leaders are not sure where to begin the performance management process, below are a few helpful steps to an effective performance management process:

Set a foundation

Laying a foundation for the performance management process is an essential thing to do. To do this, the leader must engage with the employees as well. The leader must let employees know what they expect from their employees and make sure all employees know about it. With this, employees will be fully aware of what they should do and what leaders expect them to be, especially their behavior and responsibilities.

On this step, the leader must decide what kind of performance management they want to apply. Is it an old performance management method or a hybrid approach? For example, some companies are not using performance reviews and employee ratings anymore. They change to a more complex performance management process.


Evaluating employees is one way of taking care of the company. But, listening to employees’ concerns somehow also taking care of the company. The leader can have a one-on-one meeting with employees to listen to their concerns on designated time. This method gives room for employees to relay their concerns without fear of opposition. This might be time-consuming, but it’s effective to gain a balance between taking care of the company and employees.

Begin the process

After laying a foundation and listen to employees’ concerns, the next step of the performance management process is to start employee assessment using the already decided way of performance management. Make sure that all employees know that they are being evaluated. The leader must give praise where performance is strong. If employees appear to be struggling to meet the expectation, talk with them and see if the leader can offer any support.

Analyze the data

After the process, the next step is to analyze the data. From this, leaders can see the outcome of the data. Thus, leaders can make organizational decisions. Furthermore, the result of the analysis can be used in making certain changes to the company, such as hiring and training.

The leader also must provide feedback to employees’ performance as specific as possible. Give employees a reward if they meet leader expectations. Let them know if they are on probation, getting raise in pay, changes in paid and unpaid leave and any other actions.

Evaluate the process

Now after all the steps are done, what is the last step that a leader must do? The leader must ask a question like how did it go for the company? Are companies spending too much or too little time on evaluating the employees? Was the data properly collected? All these questions will improve the next performance management process, which will lead to better business productivity. 

Is there any HR software to help with this?

Of course, there is! HRMLABS is designed to be economical and less time consuming to bring maximum benefits of the performance management process. HRMLabs feature lets you set up goals, track goals, and get insight into each employee’s performance. You can access HRMLabs from anywhere and anytime. HRMLabs lets you streamline the performance management process by setting the assessment based on your business needs.

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