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Performance management system

What is a performance management system?

Main HR glossary Performance management system

A performance management system is a framework that helps companies evaluate, monitor, and improve employee productivity. It provides methods and tools for setting goals, tracking progress, and giving feedback so employees understand how they’re performing.

For example, if an employee is working on a project, their manager can use a performance management system to track progress, assess achievements, and offer guidance for growth.

A performance management system typically includes:

  • setting goals for employees and teams,
  • tracking task completion,
  • identifying strengths and areas for improvement,
  • facilitating feedback between employees and managers,
  • storing data for performance analysis and career planning.

While software can help implement these systems, the key is having structured processes and principles in place to manage employee performance effectively. Companies that embrace performance management boost productivity, keep employees motivated, and achieve business goals faster.

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