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Performance management

What is performance management?

Main HR glossary Performance management

Performance management is the process companies use to evaluate and improve employee productivity.

For example, a company may have employees completing their tasks, but leadership wants to assess how effectively they are performing. Performance management helps set clear goals, track progress, and keep employees motivated to improve results.

Key elements of performance management:

  • Goal setting: defining clear, measurable, and achievable objectives for employees.
  • Feedback: providing employees with regular, constructive feedback on their strengths and areas for improvement.
  • Employee development: offering training and skill-building opportunities to enhance performance.
  • Motivation and rewards: implementing incentives such as bonuses or recognition programs for high-performing employees.

Companies that effectively manage employee performance not only boost individual productivity but also improve overall business efficiency. Clear expectations, continuous development, and fair recognition systems help build a strong, results-driven team.

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