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What Are the Functions of the Performance Management System?

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Businesses establish performance management systems to monitor productivity. The best business management teams constantly seek areas in need of improvement and develop plans for optimizing existing procedures. Employees themselves often demonstrate the area most in need of fine tuning. Annual evaluations for promotion, wage raises or simply identifying areas of weakness most commonly fulfill these tasks.

Improving Productivity

Productivity represents the measure of output increase over the amount of input. Management must develop all team members in order to reach ever-increasing productivity goals. This practice is much more cost efficient than firing and hiring new employees. The evaluation process ensures that employees understand the components of given tasks and perform them correctly in the specified amount of time.

Employees receive periodic feedback on what is expected and how their work compares. Management motivates team members to achieve completion in a timely manner, thus accomplishing improvements in productivity overall. Most companies utilize the performance management system annually for the purpose of determining annual raises. Those who perform best or show the most improvement earn a raise, while others receive directions for improvement.

Employee Growth

All employees develop strong skills in different areas and need encouragement or incentives from business management to inspire growth. Periodic performance evaluations are a way to ensure each team member receives the right amount of training and coaching in the needed areas and to help decide when rewards such as raises are in order.

The management team leader will review all personal goals with individual team members and evaluate what areas need improvement. This allows each employee a clear and specific time line for focusing on improvement with guidelines for what is acceptable.

Time Management

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Management savvy of the current capabilities of a staff best delegates tasks for optimum productivity results. Knowledge of the weaknesses and strengths of team members is imperative when working against tight deadlines or attempting to beat new goals by simply appointing the right employee for every task. Delegating efficiently ensures tasks are completed as quickly as possible and as accurately as possible. This strategy saves time without compromising quality.

Evaluating performance also makes it easier to accurately define the length of time a particular task should take from start to finish. Once managers have decided upon the necessary time span for each task, scheduling flows more smoothly.


PaTreshena Thompson has been writing since 2006. Her articles have been printed in Saige Woman magazine as well as Courage By 8 magazine. Thompson achieved a Master of business administration at the University of Houston and completed a Bachelor of Arts in journalism at Sam Houston State.

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