Organizational Wellness

Power Up Your People with Performance Management

Feb 8, 2023
Last Updated May 16, 2024

We know that people are more than their professional success metrics — we are all human, and our contributions can’t be bottled into a nice, concise number. But measuring and understanding an employee’s performance is still an incredibly useful barometer that can help guide a lot of employee relations. It gives you a vital baseline for an employee’s performance to be able to look at trends, improvements, downturns, and other indicators of an employee’s functioning. Plus, employees need feedback to feel like they are succeeding at work — in fact, Zippia found that about 7 out of 10 of employees say they would work harder if they felt their efforts were being recognized using feedback. 

Great performance management isn’t just a yearly check-in: It’s a way to bolster employee morale, set goals, and ultimately improve engagement. The question now becomes, how should HR professionals go about performance management for employees? Measuring performance isn’t the same process that it was ten years ago. As the human resource space evolves, performance management is adapting to modern workplaces and making more data-driven and people-focused efforts.

To make sure the HR department is handling performance management in a productive way that encourages and engages employees, read on!

What is Performance Management?

Performance management is the ongoing process of setting goals with employees about their contributions to the organization. These align with business objectives and individual aspirations, and are monitored through frequent feedback and communication. This happens on a one-on-one basis, but it’s more than just an annual performance review. The strategic process should be a continual discussion throughout the year with a lot of feedback, reviewing, brainstorming, and progress assessment. 

Ultimately, performance management should be a positive process. It allows for clear expectations and career development. For employees, however, this process is often viewed negatively thanks to its intense reputation of their work life being scrutinized and criticized. When improperly managed, the feedback can also be confusing or infrequent enough that it doesn’t make a real impact, either. 

This does not have to be the case. If you have the right program in place, performance management isn’t a grueling or discouraging experience. With modern tools and automation to help collect data and track progress, performance management can be integrated into an annual workflow.

Performance management is also different from talent management. Talent management focuses on engagement for retainment while performance management is more about engagement to meet goals for growth and alignment with company goals.

Why Employees Need Performance Management

It may sound like performance management is primarily for the benefit of the company, but it actually is an important part of an employee’s experience at their organization.

For starters, checking in with employees about their performance (and really, their employee experience) is a positive way to make them feel important and recognized. Companies that make sure each employee is known and accounted for are showing that they value them. Managers that engage in their teams’ work are better positioned to help troubleshoot issues employees encounter.

Communication and expectation setting are necessary to equip employees to do their jobs efficiently and effectively. It’s unfair to criticize or hold someone back from growing because the company fails to adequately communicate its needs or expectations. Most employees, especially if you’ve hired the right people who fit your organizational culture, want to do a good job and experience personal success. This is why it’s so important that performance management establishes expectations for employees, ensuring that they know what success looks like and how they can achieve their goals.

This helps employees develop and grow. People can’t improve without feedback and on their strengths and weaknesses — without it, there’s very little that motivates them, for better or for worse! And even seemingly “negative” feedback can prompt positive changes: One study found that 92% of respondents reported that negative redirecting feedback (when appropriately discussed) is effective at improving performance.

Even though talent management is more focused on reducing turnover, having regular performance check-ins also helps improve employee retention. When employees feel appreciated, like their work matters, and like their leaders take an interest in their efforts, they generally develop greater loyalty and develop within your company.

Best Practices of Performance Management

If you want to make employee performance management a fruitful and profitable business strategy, here are some guidelines that will steer you in the right direction.

  • Setting goals. Employees and managers both need measurable and attainable goals. Simply talking about what is and is not going well is part of the process, but it’s important to create a timeline and milestones that are trackable.
  • Communication and collaboration. Most employees don’t want to be micromanaged, but checking in consistently with care and expertise is a great way to build relationships (and help employees build more confidence).
  • Regular feedback. People need frequent feedback to do their best work and to continue growing, and it can’t happen just once a year during performance reviews. Find ways to discuss performance often, which is easier when you use performance metrics and scheduled check-ins.
  • Employee recognition. Make sure you aren’t only offering “constructive feedback” during performance evaluations. It’s essential to offer employee recognition, too, rewarding excellent work, efforts, and improvements.

How to Build an Effective Performance Management Strategy

Human resources and management have the responsibility of constructing an effective performance management strategy that holds employees accountable while motivating, supporting, and rewarding them. Here are aspects of a program to consider when building one for your employees.

Ensure everyone involved understands the why

When you’re creating a strategy, you’ve got to make sure everyone is on the same page about the purpose of performance reviews. This starts with management!

Managers need to know how to lead their employees and guide helpful discussions. It’s not to tear employees down, it’s to help them unlock their potential and meet their goals. This makes their experience positive and productive.

Employees also need to understand the why behind their performance reviews and other evaluations. Feedback is a key element of development and finding satisfaction at work, and performance reviews are the best ways to set expectations and help employees meet their goals.

Take an individualized approach with employees

People aren’t robots who all think the same, have the same goals, or have the same needs. Employees need a personalized approach to really feel like their efforts mean something and that the company values their work. Some people may need to get their productivity stats up while others need to participate in teamwork more frequently. Their obstacles may be different, so goals and the speed at which those goals are achieved will vary from person to person.

Set clear goals and metrics

Speaking of goals, the objectives that employees want to achieve should be specific and easy to understand. If, for example, an employee wants to try to improve their efficiency on a certain task to boost their performance, they need to be able to select an appropriate metric to evaluate their output and set clear expectations with their manager on how that metric will be tracked.

Schedule regular performance reviews

Throughout this article, we’ve stressed that performance management is more than a performance review. But that doesn’t mean performance reviews aren’t incredibly valuable! When done properly, they are a good contributor to your overall performance management strategy. They just shouldn’t be an annual or foreboding process. Instead, meet regularly and discuss progress (or lack thereof opening) throughout the entire year, with realistic goals for each period.

Work with employees to identify their strengths and weaknesses

No one is perfect — the expectation isn’t for people to become perfect, either. People can, however, recognize and nurture their strengths while understanding and working on their weaknesses. Some common areas people can work on or excel in include these topics:

  • Leadership skills
  • Communication
  • Boundaries
  • Teamwork
  • Culture
  • Hard skills

Reward employees 

When people are appreciated for good performance and their commitment to their personal growth, they are more likely to continue that behavior — this is why wellness gifts can be key to your overall strategy.

What Kills Effective Performance Management?

The fastest way to fail at your performance management strategy is by making the process a checklist item with no real intent behind it. Supervisors that feel like regular performance management is just another thing to check off on their to-do list are missing an opportunity to connect with their employees to foster a culture of understanding, transparency, and growth.

Management that interprets regular performance management as an opportunity to micromanage is also going to damage your performance evaluation efforts. These opportunities aren’t a means to smother employees or keep constant tabs on them. They are meant to create greater trust between management and the workforce.

Finally, don’t set unclear or unfair expectations! Both managers and employees need to have realistic objectives with reasonable timelines. Otherwise, all parties involved will be discouraged and frustrated pretty quickly.

If you want to learn more about how you can support your employees (and even improve their performance), do it by supporting their health. Healthy employees who have the resources they need to take care of their physical and mental wellness are much more productive and present at their jobs, and that care can start with Wellhub. Speak with a Wellbeing Specialist to get started!

Company healthcare costs drop by up to 35% with Wellhub! (* Based on proprietary research comparing healthcare costs of active Wellhub users to non-users.) Talk to a Wellbeing Specialist to see how we can help reduce your healthcare spending!




Wellhub Editorial Team

The Wellhub Editorial Team empowers HR leaders to support worker wellbeing. Our original research, trend analyses, and helpful how-tos provide the tools they need to improve workforce wellness in today's fast-shifting professional landscape.


Our weekly newsletter is your source of education and inspiration to help you create a corporate wellness program that actually matters.

By subscribing you agree Wellhub may use the information to contact you regarding relevant products and services. Questions? See our Privacy Policy.