The Essentials of Performance Management

Over the years, performance management has evolved from a once-a-year formality to a more fluid and continuous process. Even today it is a time of nervousness and anxiety for both employees and managers (and companies). The key is to focus on clarity, fairness, communication and engagement rather than just ticking boxes.

Listing a few practical points to from my experience to help ensure smooth appraisals:

1. Set Clear Goals (Not Just for the Sake of It)

Start the year by setting SMART goals (Specific, Measurable, Achievable, Relevant, Time-bound) that are relevant to business objectives. Employees need to know why their work matters and how it ties to the bigger picture. Measurable metrics and clearly defined targets are the key here.

2. Feedback Isn’t only for the annual employee-manager review meet

If you’re waiting till year-end to talk performance, you’re already too late. Regular, real conversations—monthly or quarterly—help people stay on track, make adjustments, and feel valued. Good feedback isn’t just about solutioning; it’s about development of confidence and capabilities

3. Mid-Year review: Are we moving in the right direction?

The business world is dynamic, company goals, market dynamics, even job roles will always be in a state of flux to align with supply and demand. A mid-year review is not just about ‘progress tracking’; it’s about ensuring alignment, removing roadblocks, and staying realistic. Course corrections are not a failure; they are a necessity.

4. Appraisal Time: No Surprises, Please

A fair and transparent year-end review should be based on facts and figures, not biases and talk. Performance should be measured against outcomes on set metrics and targets. The year end appraisal meeting is not the place where one hears about what they should or should not have not done for the first time in that year.

5. Linking Performance to Growth & Rewards

Let’s be real—money, promotions, and recognition matter. High performers should be rewarded fairly, and career conversations should happen proactively, not as an afterthought. A reward system linked to achievements keeps motivation high and attrition low.

Performance management isn’t an HR ritual—it’s a business enabler that drives engagement, accountability, and results. Thanks for reading and feel free to leave your views in the comments section for people to enable more learning.

-Shankar Balasubramaniam