Performance Management- Basic theory

What is performance management?

Performance management is one of management which aims analysis of performance at various levels of any entity and taking corrective actions. It includes attempt to find out the drawbacks in the existing set up and arrange to fill up the Gaps. In short, it supports a company’s overall business goals by linking the work of each individual employee or manager to the overall vision and mission of the company .

Performance management involves:

  1. Analyzing the objectives and goals for each department or units and ensuring that these correlate with overall goals of the company .
  2. Analyzing  the skills and job assignment details of employees in each dept and check whether these helps to achieve departmental objectives/goals.
  3. Also communicating performance goals and targets to each employee and obtain their agreement on those goals and targets. If need be, re-drafting of performance goals can be set or employees job requirements are modified to suit company/dept goals.
  4. To recognize and acknowledge the good performance of employees.
  5. Guiding the employees where improved performance are required and if necessary, recommending for necessary support/training.

Inter-relationship among different organization levels:

  • Company Vision/mission
  • Company’s long term goals/objectives
  • Annual company’s goals/objectives
  • Division of goals and objectives among divisions/depts
  • Manager/Supervisor’s goals /objectives within the dept
  • Individual Officer’s goals/objectives

Difference between Goals and objectives

Goals are statements  of business aims in respect of any corporate. They are broad, timeless.  They are the aspirations of the foundation members. One of the goals can be “ To be among the top ten of automobile industry”.

Objectives are specific statements .  They are specific with men, material , time limit etc. It tells how the results to be achieved, when to be achieved, by whom it is to be achieved .These objectives are sub-sects of goals. While goals are not measurable, objectiv es are measurable, quantifiable. One of the objective may be  “ to reply customer within 48 hours from the time of query”.

C.R. Venkata Ramani


4 thoughts on “Performance Management- Basic theory

  1. Performance management is a broad topic and performance appraisal is one of the element in it. Performance appraisal concerned mainly with achieved results vis-a-vis set out performance template for performance appraisal. Performance management attempts to even modify the performance template periodically based on observations. It is a top management function which is to be careful as it involves human relations vis-a-vis resources needed


  2. This is an open ended question?

    Is there a diffrence between performence management and performence appraisal?

    1. Yes, there is a basic difference between the two. Performance Appraisal is a specific review of performance over a given period of time against the goals that have been set for the period.

      Performance Management on the other hand is a more wholistic approach which looks at all aspects of performance right from setting the goals, expectations and identifying capabilities of an individual. These are both short term and long term. Performance management also includes appraisal as the feedback cycle to ensure the goals set are tracked to completion.

      Hope this answers the query.


      1. Performance management is one of the main function of top management whereas performance appraisal is one of the element of performance management. Normally performance appraisal is to bring out the paper on achieved results vs set out template for performance appraisal. Performance management includes appraisal of even performance appraisal if need be based on trend of market and availability of resources. So performance appraisal is not a static process but dynamic process. Performance management is looked after by top management as it involves human relations, feelings and resources like money outflow etc.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s