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Discuss performance management and explain the requirements for a performance management system.

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Hello Selvaraj,
Thanks for bring your question to  I am glad to assist.

Performance management, to be effective, needs to be viewed as a process.  We’ll look at that in a minute.  First, let’s list its impact on the business.  An effective performance management process is the basis for:

•   Managing your compensation system
•   Effectively controlling salary increases and costs
•   Retaining talent
•   Evaluating Functional and Effectiveness Competencies
•   Managing the business’s employees
•   Developing employees
•   And a factor in management and leadership effectiveness

This is too involved a topic to deal with each of the above, however, the process of performance management should give you some insights as to how these things work within the business environment.  

So let’s talk about process.  Performance management needs to be a closed loop process to be effective.  I have attached an example.  The two elements in the center of the diagram, Management Traininig and a performance Rating System that address accomplishments in terms of Functional Competencies (application of skills and knowledge) and Effectiveness Competencies (the observable behaviors by used to deploy skills and knowledge) are critical.  Again, I cannot address the process in detail as it is involved and there a books on the subject.
I hope you find the above information and the attached helpful, Selvaraj.  Thanks for looking to for you answers.  Good luck with your work or school.

I would appreciated it if you could take a few minutes and evaluate this answer using the few multiple choice questions on the website.

Mark, Owner

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Mark Eichinger


Questions related to Performance Management: related systems and processes in organizations, supervisor-employee roles, organization issues, relationship to employee training and development


My Human Resources career spanned 30 years of management and leadership posts covering domestic and international locations and included assignments in operating plants, divisions, business units, and corporate level postings. Experienced in organization culture management and all operating situations with years of experience in matrix organization structures. In the Asia Pacific region, led the multiple-country Asia Pacific H.R. organization, the professional and general manager development programs, China’s university relations program, and managed the Asia Pacific key leaders process. Coached professionals, managers and leaders. Passions are leader accountability, employee engagement, development and performance, and business strategy, planning, deployment and metrics.

Small business administration, Lions, Kiwanis, and other community organizations to included boards of directors posts in public and private organizations. -- Business Consulting.

Bachelor of Science in Business from Youngstown State University; certificates from the Thunderbird School and University of Tennessee in Management and Lean Manufacturing.

Awards and Honors
Corporate level awards for communications and compensation projects.

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