Performance Management: Managing Employee Performance

Any business owner will tell you about the immense difference between vision and reality. Performance management is how management works to achieve outcomes that match the vision as closely as possible. While performance management might sound like a specific niche of management, in reality, “management” as a whole is largely made up of performance management. And that’s exactly what we’re going to focus on in this article. Ready to dig into performance management?

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What Is Performance Management?

Let’s start with a simple question: what is performance management? Let’s first think about what management does on a basic level. Managers exist to make sure the vision of a company is carried out. They manage the day-to-day operation of a business and make sure nothing slips through the cracks. Managers oversee their teams “on the fly,” adapting the team’s efforts to changing conditions as everyone works toward shared objectives.

If we were to give a straightforward performance management definition, it would be this: the tools that are used and the work that is done by a manager to monitor employees’ performance. Good performance management keeps a manager aware of the team’s progress and each worker’s individual performance. It requires effective communication so synergies can be created as employees and managers discuss how to reach goals.

Performance Management Process

Many of the instinctive things you do as part of leading a team are part of the formal performance management process. This includes communicating shared goals, strategies, milestones, and Key Performance Indicators (KPIs).

Many organizations have traditionally offered employees only a single manager performance review at the end of each year. However, a performance management framework means managers should look at every interaction as an opportunity to facilitate learning and communication.

It’s critical to have a performance management framework in place to help manage expectations and define objectives across levels. Without a framework for measuring performance, the review “process” becomes driven by chance rather than structure. A clear framework helps address these issues. For example, 1 consulting firm established a system of buckets to capture exactly how consulting capabilities were developed. Each bucket represented clear behaviors. Demonstrating these behaviors, in the right context, could be associated with different levels, titles, and salaries within the firm.

Performance Management Framework

  1. Analysis and Insights

Gathering/analyzing data, identifying interesting insights that lead to recommendations for the client

  1. Project and Work Stream Management

Time management, communication, creating work plans, etc.

  1. Building Influence and Commitment

Engaging with clients, building trust, and influencing them

  1. Building the Business

Networking, marketing, and helping the firm land new clients

All discussions about performance were filtered through this framework. For example, all dialog in the below hypothetical performance management process could be filtered through the above framework:

  • Defining individual goals/roles at the beginning of each year
  • Having a coach who sticks with you, tracks your development, and is different from your day to day manager
  • Define individual and team goals/roles at the beginning of each project
  • Striving for real-time, informal feedback on a daily basis (positive and negative)
  • Conducting monthly “360 review” discussions between colleagues (peer to peer) and between employees and their managers
  • Doing traditional end of year performance reviews

Manager Performance Review Examples

There are commonalities that are useful across a broad variety of performance management situations. See below for best practices that create a good foundation for manager performance reviews.

  • Bring Individual and Team Goals Into Alignment

    • A great deal of sub-optimal performance arises when employees are alienated from the work they do and the team they’re a part of. Good performance management starts by discovering, defining, and communicating how team and individual goals are tied together. Shared goals help to get everyone on the same page. This makes it easier to see how each party is performing against them.
  • Define Individual Roles

    • It needs to be clear who is doing what. Each member’s roles, tasks, and expectations must be clearly defined.
  • Regular Communication

    • Good performance management doesn’t necessarily require constant communication, but it should be regular. The communication should be a two-way street. Managers need to listen to employee input.
  • Be Open and Honest

    • Don’t sugar coat things that need to be said directly, but don’t be afraid to acknowledge the difficulty of various situations.

With that in mind, here are some manager performance review scenarios.

The Annual Review Example

This evaluation should include:

  • Use of examples
  • Multiple managers sharing their perspective (not just one person’s opinions)
  • Discussions that tie back to the performance management framework the firm is using
  • Discussions that tie back to the goals and objectives of the employee’s work

End of Project Reviews

If an employee is engaged in project-based work, it’s important to have an honest review after each project. Performance and capabilities demonstrated could differ across projects, and they should all be captured.

Real-Time Feedback

Real-time feedback is not so much a “review,” but it is a key component of effective performance management. When something goes really well or poorly, talk about it in the moment to reinforce or call out the behavior.

Manager Performance Review Template

Now, let’s look at some brief manager performance review examples. Here, let’s assume we are talking about expectations for a new analyst in an end of project review at a consulting firm. Let’s also just look at one dimension of the performance management framework, Analysis and Insights. You might imagine a list of skills to demonstrate, along with a scoring rubric, as well as a place for the reviewer to use and document specific examples.

Analysis and Insight Activities – Analyst Level

The scoring system for the above example might be something like: if the Analyst checks the “regularly” box 75% of the time, he/she is ready for the next level of Analysis and Insight. Other manager performance reviews could involve a point system (e.g., scores from 1-10) against 10-15 questions or answering true / false questions. Depending on the business, more quantifiable factors could be measured and reviewed.

Performance Management Software

Both off-the-shelf and custom-tailored performance management software is available. The most powerful software can do the work of countless humans, collecting and amalgamating vast quantities of data to aid in performance analysis. Managers are increasingly relying on performance management software not only to measure performance but also to make decisions related to compensation, promotions, hiring, and more.

One popular new performance management software product is called BambooHR. This product touts its simplicity of use and powerful effects on performance. BambooHR boasts that managers will have “higher engagement, more accurate reflections of employee performance, and more chances to address problems in the moment instead of six months from now.” Other examples of performance management software include SAP Success Factors and Cornerstone OnDemand.

If you’re bewildered by the different performance management software options, there are a few features you’re likely to find helpful. First, your software should have an easy-to-use dashboard and intuitive user experience. Depending on the management structure of your company, you may also want to ensure your software allows multiple parties to use it and peer review the results. Finally, it should allow you to easily track, analyze, and display different kinds of data over customizable periods of time.


Performance management may not seem like the most glamorous management activity, but it’s an essential part of being a manager. Without smart performance management, employees can become frustrated if they don’t know how to improve. Communicating expectations and goals is essential in building a supportive work culture. It’s important for everyone in the company to pull in the same direction towards shared goals. The reward is happy employees and a healthy bottom line.

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Filed Under: Corporate Training, Leadership & Management