Performance management refers to the act of continually ensuring that your business organization’s goals are being met effectively and efficiently. Effective performance management strives to improve the overall organizational performance of any business organization but can be limited to an employee or a department.
Because performance management requires some sacrifices from the management or business owner, it might not be attractive to business organizations especially small businesses. However, its advantages make it an easy yoke to bear. These include:
#1. Increased income
Performance management makes it possible for you to improve the efficiency and effectiveness of your employees and business organization as a whole. Improving your efficiency and effectiveness would also mean your productivity is increased and the time needed to accomplish tasks is decreased.
This all round increase in productivity, reduction in time wastage, and costs that would have been incurred by decreased efficiency and effectiveness, would prevent wastage of available resources while leading to an overall increase in revenue.
#2. Focus on goals
Performance management involves constant interaction between members of a business organization’s workforce, particularly between management and employees. This constant interaction makes it easier for better explanation of management’s goals, reinforcement of performance in line with the goals, and prompt discontinuation of substandard and out of course performance.
#3. Better employees
Performance management increases the efficiency of your employees by providing a platform by which they are able to understand what is required of them and work to achieve it. In addition, it creates a medium by which employees can receive feedback and reinforcement, both of which would help increase their motivation levels.
Performance management helps you weed out employees who are not productive, enabling you to have only those employees who are beneficial to the growth and productivity of the business organization.
#4. More efficient operations
Performance management makes the job of management or the business owner, easier. It fosters a close professional relationship between employer and employee which makes it easier to implement marketing strategies, display data relationships and implement new organizational goals.
It is important to remember that although performance management is advantageous, it also is associated with certain disadvantages such as being time consuming to the manager or business owner, possibly discouraging employees and increasing bias.