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Performance Management: Definition & Process

Lesson Transcript
Instructor: Brianna Whiting

Brianna has a masters of education in educational leadership, a DBA business management, and a BS in animal science.

Performance management is the negotiation of expectations, goals, and results from a manager to employees. Learn the steps in planning, monitoring, developing, rating, and rewarding in performance management. Updated: 11/30/2021

Performance Management Defined

Let's imagine that you work for Bottles and More, which is a company that produces baby bottles. Your job duties include packing up the bottles and getting them ready for shipment. Lately, you have noticed that your boss has been approaching you and asking questions about if you are aware of the target goal of 3,000 bottles shipped a month. She also asks if you know the objectives of your job position. She even sat you down one day to go over the results of last month's total shipments and provide feedback about your performance.

What your manager is doing, is partaking in a process known as performance management, which is a process that involves communication between a manager or supervisor and an employee that focuses on expectations, objectives, goals, feedback, and results. In other words, it is the process of letting the employee know what is expected of them, watching to see if they perform as expected, rating their performance, and ultimately rewarding them if their performance is good. So, your manager is letting you know that you are expected to reach the target of 3,000 shipments per month, that you are being watched to see if you meet that goal, and providing feedback about how well you are doing to meet that goal.

So, if this is performance management, how does the entire process really work? There are five major steps involved in the performance management process: planning, monitoring, developing, rating, and rewarding.

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  • 0:02 Performance Management Defined
  • 1:23 Step 1: Planning
  • 1:42 Step 2: Monitoring
  • 2:10 Step 3: Developing
  • 2:34 Steps 4 & 5: Rating…
  • 3:07 Lesson Summary
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Step 1: Planning

Planning is the first step, and it involves outlining expectations. During planning, supervisors will establish goals and indicate how an employee's performance impacts the company as a whole. So, if your boss comes to you and lets you know what she expects from you and what the goal is for total shipments, then she is completing the planning step.

Step 2: Monitoring

Monitoring, obviously, is the step where performance is monitored. Through continued monitoring of progress, a supervisor can make adjustments and changes where needed so that an employee can meet the expected goals outlined in the planning stage. Monitoring also allows a supervisor to identify any problems. In the earlier example, your boss was monitoring your progress when she asked about your monthly shipments. She wanted to see if you were aligning with the company goal of 3,000 shipments.

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