Your Guide to Developing a Performance Management Cycle

performance management processIt’s no surprise that employees who feel aligned, productive, and recognized in their roles perform better. Those who consistently produce valuable business outcomes likely have clear, outlined goals and supportive leaders. Implementing a performance management strategy that prioritizes these principles is an imperative. 

An effective performance management cycle can help you create the competitive advantage your organization needs. This framework helps employees and leaders stay focused on goal accomplishment and productivity. With a clearly outlined path to success, you can celebrate a high performing workforce that consistently drives positive results.

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What is a performance management cycle?


A performance management cycle enables managers to continuously help their employees improve and accomplish business goals. An effective performance management cycle aligns employee and business success through a continuous process of planning, monitoring, reviewing, and rewarding employee performance. 


Why use a performance management cycle?


The reasons behind effective performance management are abundant, but often centered around increased employee productivity. A valuable performance management cycle helps develop, execute, and monitor employee performance plans.

By focusing on goal setting and continuous coaching, you can improve your employees’ performance and help them reach goals that align with your organization’s objectives.


The four stages of performance management.


There are 4 key steps in an effective performance management cycle.  Each of the steps tie together to create a realistic path to employee and business success.




1. Planning

Goal planning and setting is an integral stage of your performance management cycle. It is where employee, team, and business goals are aligned and set.

To ensure small-scale goals are tied to organizational goals, leaders need to outline company objectives before individual goals are set. When company goals are clear, managers and employees can create strategic plans to achieve individual performance goals. 

A SMART goal template is valuable to leverage, as it ensures your employees’ goals are specific, measurable, attainable, relevant, and time-bound. With this structured outline, you can analyze employee goals to ensure they are realistic and aligned to the bigger picture.


2. Monitoring

The monitoring stage is where goal progress is tracked. This step is critical to help employees achieve the goals set in the planning stage. 

To monitor employee goals, plan regular check-ins and 1-on-1s to address any roadblocks preventing employee productivity. These conversations should be on-going to stay up to date with goal progress and needed adjustments.  

Provide resources, discuss performance, and oversee goals with effective monitoring. As these steps are leveraged, employees grow and adapt to produce optimal results. 


3. Reviewing

A comprehensive evaluation of employees’ final results occurs in the reviewing stage. This is where a performance review is implemented to assess employee success or possible shortcomings. 

If leaders have utilized the monitoring stage effectively, they should already have a grasp on how well an employee performed to achieve their goals. But reviewing helps managers evaluate end results and the process leveraged to achieve them. 

This is a great opportunity for management to understand the employees’ perspectives, provide feedback for improvement, discuss future development opportunities, and create a roadmap for the future. 


4. Rewarding

The last step in an effective performance management cycle is rewarding. This is where leaders provide rewards and recognition for employees’ efforts and success

While this step is sometimes overlooked, it is crucial in safeguarding employee engagement and motivation. By acknowledging your employees’ success, you demonstrate their value to the organization, from top to bottom. Without rewards, your employees risk losing motivation and their future performance may decrease.

Common ways to reward employees are through bonuses, promotions, or through public and private recognition. With sufficient, merit-based rewards, employee engagement and performance increase.


Tips for developing a performance management cycle

While a performance management cycle provides a great outline for goal achievement, there are a few best practices to keep your process effective. Keep these tips in mind to support your employees in their initiatives. 


  • Make goal-planning a collaborative process.

When planning a goal strategy, involve your employees. Employee buy-in is necessary for top performance, so creating goals collaboratively is best. Help employees understand the importance of their initiatives to better drive motivation and success.

  • Leverage continuous communication and give frequent feedback.

Prioritize consistent communication throughout your performance management cycle. Check in with employees to ensure progress is being made, ask questions, and provide feedback. This helps to ensure employee goals are achieved.

  • Provide resources and support

Employees often need assistance to accomplish their goals. Ensure your monitoring strategy is effective to stay aware of employees’ needs. When employees feel equipped to accomplish goals and are supported throughout roadblocks, productivity levels surge.

  • Don’t hesitate to assess and adjust goals.

Throughout your performance management cycle, constant monitoring should occur to make adjustments when needed. Business metrics are often unpredictable—adjust to make goals attainable and relevant when objectives change. 

  • Focus on whether the goal is achieved, not how it is achieved. 

To avoid micromanagement, focus on outcomes rather than output. Give employees space to accomplish their goals, their own way. Direct your focus on results—process correction should only be leveraged when employees struggle or fall short.

  • If applicable, adapt your processes to a remote environment.

As remote work grows, it’s important to adjust all your processes to an online environment, including your performance management cycle. Create channels that support continuous communication, feedback, and alignment to offset the lack of in-person collaboration. 

  • Give rewards based on merit.

Rewards are most effective when they are based on the outcomes an employee produces. Employees can identify others lacking in effort. When average performers are rewarded the same as top performers, motivation can suffer. Ensure your rewards are merit-based to safeguard productivity and engagement. 


The benefits of a performance management cycle software


With a robust performance management platform, leaders are equipped to support strategies for employee, team, and business success. Supplement your performance management cycle with a streamlined tool to boost productivity, alignment, and communication.


  • Clear and aligned goals

A great performance management platform makes goal setting and tracking efficient. The right software elevates employee, team, and business goals to the entire organization, and in real-time. With an effective tool, you can celebrate increased goal alignment and accountability throughout your workforce. 


  • Streamlined 1-on-1s

Ongoing 1-on-1s are a key part of an effective performance management cycle. A valuable 1-on-1 tool helps streamline individualized performance conversations, boosting alignment and connectivity among leaders and their employees.


  • Engaging recognition

Rewarding is an integral step in your performance management cycle, and recognition is a motivating reward. A beneficial performance management platform supports public and peer-to-peer recognition to make employees feel valued for their contributions. 

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  • Effective feedback frameworks
Continuous feedback should occur throughout your performance management cycle to safeguard high performance. Drive individual, team, and organizational growth with a two-way feedback tool.

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  • Insightful talent reviews

Reviewing your employee’s outcomes can be tough. But with a robust talent review tool, you can identify top performers and talent risk throughout your workforce. Uncover ongoing perceptions of employee growth and performance to create strategies for success.


When leaders implement a performance management cycle and a strong platform, employee productivity and growth skyrockets. Support and encourage high performance with strategies that help employees reach their full potential to push business outcomes.


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Published November 4, 2021 | Written By Kristin Ryba