Performance Management
Performance management drives employee development through structured reviews, goal setting, and continuous feedback. This guide covers the complete performance management cycle.
Overview
The performance system enables you to:
- Conduct structured performance reviews
- Set and track employee goals
- Monitor key performance indicators
- Provide continuous feedback
- Create improvement plans
- Link performance to compensation
Accessing Performance Management
Navigate to HRM → Performance to access performance features.
Understanding Performance Management
Review Types
| Type | Frequency | Purpose |
|---|---|---|
| Annual Review | Yearly | Comprehensive evaluation |
| Mid-Year Review | 6 months | Progress check |
| Quarterly Check-in | 3 months | Goal alignment |
| Probation Review | End of probation | Confirmation decision |
| Project Review | Project end | Project-specific feedback |
| 360 Feedback | As needed | Multi-source input |
Rating Scales
5-Point Scale
| Rating | Label | Description |
|---|---|---|
| 5 | Exceptional | Consistently exceeds expectations |
| 4 | Exceeds | Often exceeds expectations |
| 3 | Meets | Consistently meets expectations |
| 2 | Needs Improvement | Sometimes meets expectations |
| 1 | Unsatisfactory | Does not meet expectations |
Letter Grade
| Grade | Equivalent | Description |
|---|---|---|
| A | 90-100% | Outstanding |
| B | 80-89% | Very Good |
| C | 70-79% | Satisfactory |
| D | 60-69% | Needs Improvement |
| F | Below 60% | Unsatisfactory |
Performance Cycle
Goal Setting → Mid-Cycle Review → Year-End Review →
Calibration → Feedback → Development Planning → CompensationSetting Up Performance Reviews
Creating Review Cycles
- Go to HRM → Performance → Cycles
- Click New Cycle
- Configure:
Cycle Details
- Name - "FY 2026 Performance Review"
- Period - Start and end dates
- Review Type - Annual/Mid-year/etc.
- Applicable To - All employees or specific groups
Timeline
- Goal Setting - When goals should be set
- Self-Assessment - Employee self-review window
- Manager Review - Manager evaluation period
- Calibration - Rating alignment period
- Feedback - Discussion period
- Set up review template
- Publish cycle
Review Templates
Create standardized templates:
- Go to Settings → HRM → Performance → Templates
- Add sections:
- Goal achievement
- Competency assessment
- Behavioral evaluation
- Development areas
- Overall rating
- Configure rating scales
- Add guided questions
- Save template
How-To Guides
How to Create Performance Reviews
Manager Creates Review
- Go to HRM → Performance → Reviews
- Click New Review
- Select:
- Employee
- Review cycle
- Review template
- System loads goals and data
- Complete review sections
- Save as draft or submit
Review Sections
Goal Achievement:
- List assigned goals
- Rate achievement (1-5)
- Add comments
- Calculate weighted score
Competency Assessment:
- Rate job competencies
- Provide examples
- Identify strengths
- Note development areas
Overall Assessment:
- Summary rating
- Key accomplishments
- Areas for improvement
- Recommendations
How to Set Employee Goals
Goal Framework (SMART)
| Element | Description | Example |
|---|---|---|
| Specific | Clear and defined | "Increase sales" |
| Measurable | Quantifiable | "by 20%" |
| Achievable | Realistic | within market conditions |
| Relevant | Aligned to role | for assigned territory |
| Time-bound | Deadline | by Q4 2026 |
Creating Goals
- Go to HRM → Performance → Goals
- Click New Goal
- Enter:
- Goal Title - Brief description
- Description - Detailed explanation
- Category - Business/Development/etc.
- Weight - % of total (all goals = 100%)
- Target - Success metric
- Due Date - Completion deadline
- Link to organizational objectives
- Submit for approval
Goal Cascading
Align goals top-down:
Company Goals
↓
Department Goals
↓
Team Goals
↓
Individual GoalsHow to Track KPIs
KPI Setup
- Go to HRM → Performance → KPIs
- Define KPIs:
- Name - "Customer Satisfaction Score"
- Metric - Percentage
- Target - 90%
- Frequency - Monthly
- Data Source - CRM system
- Assign to roles/employees
- Set up tracking
KPI Dashboard
Monitor performance:
- Current vs target
- Trend over time
- Team comparison
- Alert thresholds
How to Conduct 360 Feedback
360 Process
Setup
- Go to HRM → Performance → 360 Feedback
- Select employee
- Choose reviewers:
- Manager
- Peers
- Direct reports
- Self
- Set deadline
Collection
- System sends requests
- Reviewers complete feedback
- Responses are anonymous (except manager)
Analysis
- Aggregate scores
- Identify patterns
- Generate report
Feedback Session
- Share consolidated results
- Discuss insights
- Create action plan
360 Questions
Example competency questions:
- Communication effectiveness (1-5)
- Team collaboration (1-5)
- Problem-solving ability (1-5)
- Leadership qualities (1-5)
- Technical expertise (1-5)
How to Create Improvement Plans
Performance Improvement Plan (PIP)
For underperforming employees:
Go to HRM → Performance → Improvement Plans
Click New PIP
Document:
- Employee - Select employee
- Issues - Performance gaps
- Expectations - Required improvements
- Actions - Steps to improve
- Support - Resources provided
- Timeline - Duration (30/60/90 days)
- Consequences - If not met
Get HR approval
Meet with employee
Both sign acknowledgment
Monitor progress
Document outcomes
PIP Monitoring
Track progress:
- Weekly check-ins
- Document improvements
- Adjust support as needed
- Final evaluation
How to Link Performance to Compensation
Merit Matrix
Link ratings to raises:
| Rating | Performance | Merit Increase |
|---|---|---|
| 5 | Exceptional | 10-15% |
| 4 | Exceeds | 7-10% |
| 3 | Meets | 3-5% |
| 2 | Needs Improvement | 0-2% |
| 1 | Unsatisfactory | 0% |
Bonus Calculation
Bonus = Base Salary × Target Bonus % × Performance Multiplier
Where Performance Multiplier:
- Rating 5: 1.5x
- Rating 4: 1.2x
- Rating 3: 1.0x
- Rating 2: 0.5x
- Rating 1: 0xAdvanced Features
Calibration Sessions
Ensure rating consistency:
Prepare
- Managers submit preliminary ratings
- HR compiles distribution
Review
- Compare across teams
- Identify outliers
- Discuss borderline cases
Calibrate
- Adjust ratings for fairness
- Document rationale
- Finalize distribution
Continuous Feedback
Real-time feedback system:
- Quick recognition
- Instant feedback
- Peer appreciation
- Manager notes
- Aggregated for reviews
Goal Progress Tracking
Monitor goal completion:
- Milestone tracking
- Progress updates
- Blockers identification
- On-track indicators
Performance Analytics
Insights and reporting:
- Rating distribution
- Goal completion rates
- Team performance trends
- Year-over-year comparison
- Correlation analysis
Best Practices
🎯 Goal Setting
- Collaborate on goals
- Ensure alignment
- Regular check-ins
- Adjust when needed
📊 Reviews
- Prepare thoroughly
- Use specific examples
- Focus on behaviors
- Be constructive
💬 Feedback
- Timely delivery
- Balance positive/constructive
- Actionable suggestions
- Follow up
📈 Development
- Create growth plans
- Provide resources
- Track progress
- Celebrate improvements
Configuration
Performance Settings
Navigate to Settings → HRM → Performance:
- Review Cycles - Annual/Semi-annual
- Rating Scale - 5-point/letter grade
- Goal Weights - Enable weighting
- 360 Feedback - Enable/configure
- Calibration - Required/optional
Template Settings
- Default Sections - Standard sections
- Competencies - Job competencies
- Questions - Guided questions
- Rating Labels - Custom labels
Notification Settings
- Goal Due - Reminder before deadline
- Review Start - Cycle notification
- Pending Reviews - Manager reminders
- Feedback Requests - 360 notifications
Troubleshooting
Common Issues
Cannot create review
- Check review cycle active
- Verify employee eligible
- Confirm permissions
- Check template assigned
Goals not showing
- Verify goal period
- Check employee assignment
- Review goal status
- Confirm visibility settings
Rating calculation wrong
- Check weight totals (should = 100%)
- Verify formula configuration
- Review component ratings
- Audit calculation
360 feedback incomplete
- Check deadline not passed
- Verify reviewer access
- Send reminders
- Extend deadline if needed
Next Steps
Learn about Training & Development to support employee skill development.