How Important Is Performance Management in Achieving Organizational Goals?

By Marianne Chrisos - Published on September 26, 2019
Important of Performance Management in Organizational Goals

When HR team recruit employees, they focus on several things to identify the best candidates for the job. From company and cultural fit to how the experience will translate into a specific position and help elevate the business, HR has an important responsibility to hire the kind of employees who can and will work collaboratively and successfully towards the goals of their position and the mission of the business. Businesses and HR teams are also smartly turning to performance management processes and tools to help them increase the effectiveness of their employee performance and maximize their contributions. A better performance management system has been linked to better employee retention and companies reaching more of their business goals.

Why is performance management important in accomplishing organizational goals? A modern performance management process takes a 360-degree view of performance management, not just focusing on the performance appraisal or annual review, but integrating feedback and goal review throughout the year. This helps boost employee productivity and morale, as well as gives businesses a chance to continue to align how an employee’s contributions with overall business goals.

The importance of performance management in accomplishing organization goals

Here are several ways that effective performance management can help businesses accomplish more of their organizational goals.

  • Employees who are recognized and rewarded for their performance are more likely to be invested and engaged in their jobs and responsibilities. Regular performance management that spans the day to day can keep employees motivated, which will drive them to be more productive and invested in their tasks, all of which roll up to supporting organizational goals.
  • Performance management helps to empower employees. Managers and supervisors who connect with their employees about business happenings and goals give their employees a better sense of where they fit into the big picture. This kind of perspective can drive performance. When employees know why their job matters and how it fits into the overall goals of an organization, they are often both more motivated to perform better and also in ways that help the business reach milestones or align better with goals. For instance, if a finance professional knows that their job isn’t just to examine expense reports to prevent fraud and because that’s was required of the role, but also because greater fiduciary responsibility allows businesses to reinvest in technologies that could lead to business growth, promotions, and bonuses, that finance employee may be more motivated towards excellence in their role.
  • Continued and ongoing performance management gives managers and supervisors an opportunity to regularly assess how an employee is being used within the business. Asking questions like “are these job responsibilities the best use of this employee’s time and skills or are there other tasks they can pivot to create more value for the business?” and “are these job responsibilities necessary to move us closer to our business goals or are they just a continuation of doing things the way they’ve always been done?” Regular performance management can help employers understand if their employees have the right skill sets to be moved into more value-adding positions and also refine positions to better reflect work that helps to better meet the overall business goals.
  • Ongoing performance management can support better employer-employee relationships. More 1-on1 discussions can improve a boss-employer dynamic more than meeting once in a while or just annually to discuss an annual review and raise. Better relationships can lead to more engagement and also encourage employees to reach out to their boss if they have a question or want to make a suggestion – both of which can lead to the more effective realization of company goals.
  • Employees and managers who meet regularly to discuss employee goals and overall business objectives are able to define not just what the organizational goals are but also strategize around how the employee can best meet their goals – which in turn support company goals. Overall, effective employee performance management helps to better align how individual employees work together and in tandem to support organizational goals. If there is a question as to how an employee or role is effectively supporting company objectives, that’s usually a sign that HR and leadership should have a larger conversation regarding employee and roles.

Performance management plays a huge role in the overall success of a company, not just an individual’s career. Remembering why performance management is important in accomplishing organization goals is an important step in being able to continue business growth and ensure long-term success.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a company near Dallas and contributing writer around the internet. She earned her master's degree in Writing and Publishing from DePaul University in Chicago and has worked in publishing, advertising, digital marketing, and content strategy.

Marianne Chrisos | Born in Salem, Massachusetts, growing up outside of Chicago, Illinois, and currently living near Dallas, Texas, Marianne is a content writer at a c...

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