People Innovation Excellence

Introducing Performance Management

The organizational success equation is quite simple. Organizations that have more and better resources are more successful compared to those that don’t. This applies to large corporations, small start-ups, not-for-profits, and to organizations of every size and in every type of industry.

Here’s the complicated part. In today’s globalized and hyper competitive world, it  is relatively easy to gain access to the same resources as your competitors — particularly when it comes to technology and products. For example, most banks offer the same products such as different types of savings accounts and investment opportunities. If a particular bank decides to offer a new product or service, such as an improved mobile phone app, the competitors offer precisely the same product.

But, a key differentiating resource is people. Organizations with engaged, motivated, and talented employees offering outstanding service to customers and coming up with creative ideas pull ahead of the competition, even if the products offered are similar to those offered by the competitors. Performance management is the ideal tool to have this type of workforce.

There are 100s of books on talent management. Why? If you manage your talent right, you create a sustainable competitive advantage.

A performance management system is a key tool to transform people’s talent and motivation into a strategic business advantage.

Performance management is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning their performance with the strategic goals of the organization.

Let’s take a look at the two main components of the definition of performance management:


» Continuous process: Performance management is ongoing. It involves a never-ending process of setting goals and objectives, observing performance, and giving and receiving ongoing coaching and feedback.

» Alignment with strategic goals: Performance management requires that managers link employees’ activities and outputs with the organization’s goals. Making this connection helps the organization gain a competitive advantage because performance management creates a direct link between employee and team performance and organizational goals, and makes the employees’ contributions to the organization explicit.



Performance Management for Dummies

By Herman Aguinis, PhD

2019, John Wiley & Sons, Inc., Hoboken, New Jersey

Published at :

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