The Performance Management Quintet

5 Essential Components for Performance Management Success

The process of performance management is vital for every organization seeking to accomplish its strategic objectives. An effective process enables the organzation to align employees with the mission and vision and determine whether they achieve or surpass expectations set by their manager. Other areas in which performance management is important includes training, evaluation of employee’s conduct, as well as salary allocation and promotion.


There are five essential components of effective performance management:


  • Goal setting
  • Performance monitoring
  • Performance development
  • Performance evaluation
  • Compensation and recognition


The performance management process starts with developing goals and objectives. The employees should engage with their managers in setting SMARTT objectives which are specific, measurable, achievable, relevant and time bound. The agreed goals should also reflect the goals of the whole organization or company.


Monitoring involves tracking the employee’s progress in relation to their own set goals. There should be periodical monitoring, performance assessment as well as employing some form of feedback mechanism. Through performance monitoring, managers are in a position to identify any developing challenges and tackle them before they become serious.


Development involves assisting an employee in improving specific skill sets which will help them achieve organizational objectives is performance development. The process should include training, coaching, and mentorship. Performance development assists in preparing employees’ for future roles and responsibilities.


The evaluation step in the process centers around reviewing the employee’s performance relative to the set objectives. This happens mostly in the last instance of the performance cycle like, a quarter, or one year. The performance evaluations must be done on a fair and objective basis in order to give feedback to the employee on one hand and making decision on their promotions or compensation on the other.


The last stage of performance management deals with compensation and recognition. The employees need to be paid based on their performance as well as commendation for a job well done. It ensures motivation of employees as well as it contributes in creating a good working culture.


An overview of research in performance management:


The Five components of performance management are also investigated empirically by a number of research inquiry. Such as a research conducted by Armstrong and Baron (2005) indicates that goals setting is a predictor to employees’ performances. In respect with this, the study revealed that performance monitoring and feedback were critical in enhancing employees’ performance.ICENSE: This is because in some countries it may be seen as illegal.


A research by Al-Ani (2014) indicated that performance development influenced employee satisfaction and job retention. The study established that performance review and pay played important roles in motivating employees and encouraging better results.



There are a variety of ways through which organisations can put into place the five components of performance management. Here are some suggestions:


Goal setting: Ensure that goals are specific, measurable, attainable, realistic, and actionable. The goals have been set in connection with the organization’s general aims and ends.

Performance monitoring: Provide periodic assessments of employees’ progress towards their objectives via periodical check-ins, performance reviews, as well as other sources of feedback. Give feedback to employees about their continuous performance evaluation.

Performance development: Assess training and development requirements of employees, and supply them with necessary equipment to enhance competency levels and capability, including performance management certification and training.

Performance evaluation: Adopt a just and impartial performance appraisal system. Evaluate employee’s performances based on given criteria and then provide them with feedback during the process.

Compensation and recognition: Ensure that you pay your employees fairly for their performance and award them for achievements.



Every successful organization has a set of components upon which good performance depends and there are five of them. If properly conducted, organizations will be able to align their employees’ direction and aspirations with those of the organization and also measure employee performance against standards, ensuring it meets requirements or even exceeds them. As mentioned above, performance management may also serve as an avenue for employee development, identifying performance problems and taking compensation and promotion decisions.





Armstrong, M., & Baron, A. (2005). Managing performance: Performance management in action. London: Routledge.

Al-Ani, A. A. (2014). The impact of performance management system on employee job satisfaction and turnover intention. International Journal of Business and Management, 9(7), 105..