Improving Productivity with Effective PERFORMANCE MANAGEMENT

The most important and critical resource of any organisation are its employees. The level of performance of the people working in an organisation will determine how far the company can go in achieving its goals. A small company with an effective performance management system is far more likely to succeed than a large company where employees’ performance is rarely rated or measured, thus highlighting the significance of a performance management system.

We are all familiar with terms such as performance appraisal and performance evaluation; however, they are just steps in the overall performance system. An effective performance management system is the complete process designed for an organisation in an effort to optimize and improve the productivity of all the individual employees and teams so as to enhance overall performance and better achieve the organisation’s goals. Herein, clear job descriptions are detailed for all employees based on their role with specific KRAs (Key Responsibility Areas) and PIs (Performance Indicators) as discussed with them. Employees and teams are given detailed targets and parameters for the basis of their evaluation.

This is followed by continuous evaluation of the employee’s performance with regular feedback. The manager is attentive to an employee’s output levels and provides positive feedback when the employee does well and at the same time offers them guidance if they go off track. Finally, an appraisal of the employee is carried out based on his ability to meet the required targets in the pre-determined time frame.

The main focus of a performance management system is in optimizing one’s productivity in line with the company’s goals. An effective system helps motivate the employees to perform better as well as provides them with a better focus of their responsibilities. In many instances, companies observe a significant dip in the employee’s performance over time. This can be due to several reasons. At times, there isn’t sufficient communication between the manager and the employee leading to a disconnect; or maybe the individual’s goals were not outlined clearly causing them to keep working aimlessly hampering their productivity. Overtime, this can cause demotivation and low morale amongst the employees resulting in low performance levels.

An effective performance management system is extremely significant to boost the performance of a team too. Many a times employees in the same team feel like they are evaluated differently leading to disappointment. The existence of a transparent and effective performance management system enables everyone to identify the parameters for their performance as well as have a clear understanding of their goals and possible rewards or compensation. Performance appraisal is also an important part of performance management system. Rewards in the form of bonus or promotion opportunities will motivate employees to work harder thus increasing their productivity. Further, if an employee doesn’t reach his goals, the transparency of the system allows the company to refuse any reward in a fair manner. This also enables managers to identify aspects that a particular team or employee may struggle with and help them overcome it with adequate training and guidance.

An important point to remember when designing a performance system is that it is to motivate employees and play to their strengths so as to improve overall productivity and not to play favourites by providing employee’s tasks that they might get away easily without putting in any effort. However, designing an effective performance management system is not an easy task. One needs to identify and analyse the requirements of the organisation as well as assign these tasks to individuals and teams in a fair and optimum manner. Also one needs to take into account current industry benchmarks and standards. This is where the proficiency of professional consultants comes in handy. A team of experts is more likely to have a fair and unbiased look at your organisation’s goals and employee’s productivity. With an overall industry experience, consultants are able to pinpoint specific areas of attention best suited for the organisation. Further, there is less likely to be a feeling of discontentment or peer bias amongst colleagues as it is approached in a more professional manner.

To know more about how we can enhance your company’s productivity and devise an effective performance management system best suited to your organisation, please visit; or connect with us at


Share this: