Running an organization is never as simple as it seems on paper. While on the surface, an organization may look like a cohesive machine working as one, beneath that veneer, there are individual parts working together to make the whole thing run smoothly. Coordinating and managing all of those little parts takes a lot of organization and cooperation. Without the proper tool to manage it all, a business would quickly collapse. There’s a definition of performance management that you need to know.

Organizations are not machines run like cogs and bolts, they are groups of people taking on multiple responsibilities to reach the company’s ultimate goal. So, when we say that it takes a lot of cooperation, we really do mean two people cooperating, communicating, and working together. Today, the best way for businesses to do this is through performance management. Let’s take a look at what performance management means and how it can benefit your organization. Download the ebook “The Skeptics Guide to Performance Management and get started on improving your performance management process.

Performance Management Definition

What Performance Management Means

Over the years, the actual practice of performance management has changed quite a lot. At one point, it was limited to just an annual performance review process, but as time has gone on, it’s transformed into an ongoing, continuous process of checking in, modulating, and communicating goals to employees and management. It’s just as the name suggests; performance management is all about managing how efficiently and productively the business runs. Without knowing the modern definition of performance management, however, it can be confusing to find value in it.

But managing performance isn’t as simple as fine-tuning a machine. Because businesses are made of people, boosting performance means making the most of your worker’s potential. The only way to do this is by giving constant feedback, encouraging their growth, and guiding employees in the right direction when they veer off track.

The keyword here, though, is “constant.” Compared to older methods, such as a one-time annual performance review, continuous feedback gives employees the knowledge to make changes and grow throughout the year while they are working on projects, rather than waiting until months later to receive feedback on something they might not even remember. Feedback in real-time is more objective, more consistent, and more effective than a quarterly or annual update.

For many bosses, providing continuous feedback might not sound feasible. There’s only so much time in the day, and holding each employee’s hand through a project just isn’t possible. But that assumption is based on the idea that project management is done manually. We live in the digital age! Automation is king when it comes to the corporate world, and project management is no different. Automating the process makes feedback nearly continuous without the hassle of constant in-person updates.

What Difference Does Performance Management Make?

It might not seem like it, but performance management can actually make a huge difference for your business on multiple levels. The goal of a company is clearly to be as productive as possible, and the point of performance management is to maximize productivity, so that should be the first, most obvious benefit. This works by pinpointing where inefficiencies lie and correcting them before they’ve gone too far to be fixed. This can be problems with the overall objective or with employees. Automated performance management software stores data in real time that can then be exported onto an easy-to-read data report. Using this information, managers can locate the problem, train accordingly, or make slight alterations to the business objectives.

But performance management software does more than just boost productivity. It also makes your business more connected, more transparent, and more equal. While you can buy downloadable on-sight systems, the best way to invest in automated performance management software is through an online cloud-based platform. Compared to on-sight software, online platforms have benefits that we won’t go into here, but by having everything saved to a digital cloud, all information is accessible to everyone in the company. This means that nothing is kept from anyone.

Making a More Human Company

Performance management software makes company goals and objectives clear to employees, meaning that they can watch as their work contributes to those goals. This busts the barriers that keep different levels of employees separate and brings everyone to the same table. Whereas before, employees may have resented or feared receiving feedback at the end of the year because performance management software makes feedback continuous, managers and employees can build healthier relationships, and feedback becomes nothing more than a daily fact of the job.

As we said at the beginning, communication, and collaboration are essential for a business to run at its best. Performance management software is the ultimate way of guaranteeing that communication never breaks down. Where annual performance reviews were often one-sided, performance management makes feedback a two-way conversation between employees and their bosses. Everyone has access to the same information and can communicate exactly what might be causing problems.

Continuous communication also has the benefit of making your company more flexible. Compared to older models, where objectives were set at the beginning of the year and couldn’t be altered easily, the constant inflow of information from performance management makes your business more fluid. Employees and managers alike will appreciate the changeability and flexibility of having access to their information in real time rather than having to wait until the end of the year to assess how well the objective was met.


To sum it all up into a neat definition, performance management is an approach to business built on constant communication and feedback that is meant to not only boost productivity but also bring together every aspect of a business under one clean, straightforward, cloud-based platform. It breaks down walls, brings workers together, and gives employees the tools and knowledge to grow in their careers throughout the year, rather than after a one-time annual performance review. Performance management is the present and the future of maximizing your business’s ultimate potential. To get set up with a performance management platform, contact our people success team today.