Performance Management System

Performance management systems track the labor, productivity, and development of employees through Human Resources software. Talent and employee performance management has recently been widely introduced into applicant tracking systems as well as most enterprise HR software suites.
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A performance management system is a technology and/or systematic process where the organisation involves its employees in improving organisational effectiveness by focusing them on achieving the organisation's mission and strategic goals. Not only is it a tool to implement the organisation's strategy, it is also useful for communicating the organisational goals and objectives, reinforcing individual accountability for meeting those goals, and tracking individual and organisational performance results.

A good performance management system has four basic aspects. Firstly, it should provide each employee with a clear understanding of his or her job expectations. The job description should be specific, kept up to date, while clearly spelling out the required skills and goals. Secondly, employees should be given regular feedback about their performance. Together with well-defined performance indicators, employees should be regularly informed of how they are performing. This should also be a two-way channel whereby employee feedback can be used to further improve both the system and the organisation. Thirdly, regular advice and training should be provided to help employees improve their performance. Fourthly, there should be a reward system that is co-related to employee performance.

With a good system in place, the organisation will find it easier to hire talented people, place them in the right position, align their individual performance with the organization's vision and strategic objectives, develop their abilities, and reward their performance and contributions to the organization's success. Moreover, with on-time performance appraisals and commensurate rewards, this will help to improve employee morale and retain the talented ones. In the long run, there will also be a marked improvement in work productivity, which translates to increased profitability for the organisation.