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Modern Work: Fundamentals For Performance Management

25 December, 2021
5 mins

Gone are the days when people used to walk into work. Ever since the global pandemic, logging into work sitting at the corner of your home has become the new norm. After all, a safer approach was required to maintain the effective functioning of the organization. This has resulted in a significant shift in management strategies. An effective management process now revolves around channeling employee value, focus and engagement. Such a process is possible by having an effective performance management system at its core.

Performance management

Source: Pexels

Performance management is highly in the buzz, and rightly so. Catering to the needs of the disruptive market- performance management has taken a new shape by calibrating its traditional approach. There is enough written about how performance management is increasing effectiveness at the workplace. Thus, it’s important to understand the fundamentals of performance management and its importance to the organizational culture.

As the name suggests, performance management is done by establishing individual and team goals that are aligned with the organizational goals. The most crucial point here is that it is a ‘continuous method’ and not a once in a while activity. Since 2015 alone, more than 50 major top companies such as Google, Netflix, Accenture, and Adobe have revamped their performance management process. 

Trends change, people, change, technology changes. Although, the fundamentals of performance management generally remain the same. In modern work culture, the fundamentals of performance management are: 

1. Align people with business strategy

Organizations that are known to have the most effective and successful performance management process have a clear sense of the need for performance management. This clarity is shared by all the people involved in the process like the employees, the hr function, and the line management. Aligning and implementing is the first important purpose that drives performance management in the organization. One of the most essential needs for performance management in any organization is aligning the efforts of the employees with the goals of the organization.

Alignment helps with:  

• Ensuring people understand the purpose behind their work

The initial and important part of making performance management effective is to ensure that there is a clear understanding of the purpose behind performance management amongst both the managers and employees.

• Increasing productivity 

Performance management is known to play a highly important role in promoting and improving the productivity of individuals, teams, and the organization. Consequently, the individuals, teams, and the organization are able to achieve their goals in a more efficient manner

• Development of talent and potential

Developing talent and helping the employees to work at their full potential is a key purpose of performance management. This is known to be highly motivating for the employees as they will want to develop and enhance their talent/potential to work effectively.

2. Increase the sense of ownership at the company

While the process of performance management is usually facilitated by the HR team, evidence suggests that it is the line managers who were the main contributor. Performance management is a manager-run approach and is governed by the business units. It is the senior executives who play the role of leaders in the process of performance management. Thus, it is important for them to take ownership of their direct reports by offering recognition and constructive feedback.  

3. Improve goal setting 

Backed by numerous researches, setting challenging but achievable goals for all types of work is one of the important pillars of the performance management process. These researches help in setting an effective goal designing process. Most organizations are already aware that the goals have to be SMART – Specific, Measurable, Achievable, Realistic, and Trackable. To maximize efficiency and commitment, it is important to include the opinions of the employees in the goal-setting process. Moreover, awareness of the significance of setting goals is reflected in the practice and work as well.

Although goal setting is practiced universally, the way the goals are set varies on different grounds:

• Level of centralization

The approach to setting goals can vary from top-down, in which goals are established centrally and then streamed down the levels in the organizations, to a decentralized method which includes the local management to collaborate with the individuals and teams to set targets. Most organizations follow the centralized, top-down approach for setting goals. Although, employees are provided with some kind of inputs in this method as well before goals are set for them.

• Scope of the process

The clarity of the purpose of performance management also holds important significance in the goal-setting process. Some companies can focus on their business results while others may focus more on the development of employees. For example, some organizations may not keep in mind personal development during the process of goal setting. On the other hand, some organizations usually have development objectives set for each of their employees.

4. Enhance Feedback Culture

One of the most critical pillars of performance management is the requirement of feedback. It serves as a core part of performance management. If there is no feedback, there can be no room for any individual, team or organization to learn or improvise. The point from where the feedback comes and how it is delivered can vary from company to company. People thrive on feedback from their respective colleagues and managers. Feedback helps in letting people know how they are performing and in which areas an improvement is needed. A performance management process can only be effective when it involves giving ongoing feedback to promote consistent improvement.

Some aspects to keep in mind are: 

• Frequency and focus of the feedback

Interim feedback is now a common part of the annual cycle of performance management. Owing to technological development, real-time constructive feedback has also been found to be mainstream across various industries now. 

• Who gives the feedback?

The traditional performance management process was a binary approach that involved an employee and their manager. 360 feedback was used by only the senior management due to the cost involved. However, 360-degree feedback exchanges can be extremely valuable to mature organizational culture. Thanks to technology, this process is now available to a larger set of companies.  


Performance management has always been used at a large scale globally. However, it has become even more renowned in the current times. Now everyone is familiar with the fact that performance management is extremely critical for an organization’s effectiveness. 

Schedule a demo today to see how JOP can give your business the performance management system it needs to perform better.