What is Performance Management?
How to Do It Effectively With or Without a Formal Process
Performance management is the ongoing process of helping people understand what good work looks like, supporting them to do that work well, reviewing progress, and taking fair action when performance needs to continue, improve, change or be formally addressed.
A useful performance management definition is this: performance management is a continuous cycle of setting expectations, supporting people to meet them, reviewing progress, learning from what is happening, and taking aligned action when performance is strong, drifting, blocked or below the required standard.
This is broader than annual reviews, ratings, forms or difficult conversations. The performance management meaning has changed over time. Modern performance management includes goal setting, feedback, coaching, development, review and accountability (Aguinis, 2019; DeNisi & Murphy, 2017; Pulakos et al., 2019).
In simple terms, performance management defined means creating the conditions where people can understand the work, do the work, improve the work, talk about the work and take responsibility for the work.
Why Performance Management Matters
Performance is rarely only about individual effort. It is shaped by role clarity, capability, motivation, relationships, leadership, systems, resources, inclusion, feedback, psychological safety, organisational culture and external pressures.
This is why performance management becomes limited when it focuses only on the individual. A person may be underperforming because of capability, motivation or behaviour. They may also be affected by unclear goals, poor processes, workload, team conflict, exclusion, inaccessible communication or inconsistent leadership.
The Include-Performance Framework® offers a useful way to think about this. It connects inclusion and performance by asking whether people have the clarity, access, relationships, support, accountability and conditions needed to contribute to shared outcomes.
This does not excuse poor performance. It makes the analysis of performance more accurate.
In Inclusive Leadership: Navigating Organisational Complexity, Walsh (2024) argues that inclusion is not a separate activity added onto real work. It is part of how leadership, organisational behaviour, team performance and decision-making become more effective. This matters because performance happens inside relationships, systems, priorities and power. People do not perform in isolation.
The Performance Management Cycle
The performance management cycle is the repeated pattern of planning, supporting, reviewing and improving performance.
A practical cycle can include:
Clarify the work: What matters most now?
Set goals: What outcomes, behaviours and standards are expected?
Agree support: What resources, clarity, training or adjustments would help?
Check progress: What is working, what is blocked, and what has changed?
Give feedback: What needs to continue, adjust, stop or develop?
Coach and develop: What capability, confidence or judgement needs strengthening?
Review evidence: What does the data, work output, behaviour and stakeholder feedback show?
Take aligned action: What is the next most effective step?
Using the Include-Performance Framework®, this cycle also includes purpose, needs, barriers, aligned action and impact review. This keeps performance management connected to both inclusion and effectiveness.
Performance Management Goals
Performance management goals are the agreed outcomes, behaviours and development priorities that guide performance over a defined period.
Good goals can include business goals, team goals, role goals, behavioural goals, development goals and inclusion goals. For example, a person’s goals may include delivery, quality, collaboration, communication, leadership, stakeholder management, learning or fair decision-making.
Goal-setting research suggests that specific and appropriately challenging goals can support performance, especially when people are committed to the goals and receive feedback on progress (Locke & Latham, 2002).
Performance Management for Managers
Performance management for managers is the everyday leadership practice of clarifying expectations, giving feedback, supporting development, addressing concerns, recognising contribution and creating the conditions where people can perform.
Managers often need practical support to clarify expectations, give specific feedback, discuss underperformance early, balance empathy and accountability, recognise strong contribution, document conversations fairly, and know when HR support is needed.
ELIS Advantage line management programmes build this capability through practical performance conversations. The focus is not only on what managers say, but also on how they interpret what is happening. Managers are supported to pause, examine the evidence, consider the wider system, name the impact clearly and choose the most effective option.
Performance Management HR
Performance management HR work is about designing and supporting the conditions that make fair and effective performance conversations more likely.
HR can support performance management by creating templates and guidance, supporting managers with difficult conversations, helping ensure consistency and fairness, reviewing patterns in ratings and progression, advising on formal performance improvement processes, and supporting inclusive and accessible review practices.
From an ELIS Advantage perspective, HR can also ask:
Whose needs are built into this process?
Whose needs are assumed?
Whose needs are missing?
Where could the process unintentionally advantage some people and disadvantage others?
What evidence are we using to understand performance fairly?
These questions matter because performance management can either strengthen trust or damage it.
Performance Management System and Tools
A performance management system can mean the whole organisational approach to managing performance. It can also mean a software platform used to document goals, feedback, reviews and development plans.
Both meanings matter, but they are not the same.
A software platform is not a performance management system by itself. It can hold the process, but it cannot create the quality of the process. It can prompt check-ins, but it cannot make the check-in honest. It can store feedback, but it cannot make feedback fair.
A real performance management system includes a clear performance philosophy, defined roles and responsibilities, fair processes, manager training, useful data, inclusive decision-making, review and improvement.
Performance management tools can include goal-setting templates, one-to-one meeting guides, feedback prompts, performance review forms, development plans, skills matrices, 360-degree feedback tools, team performance check-ins, calibration guides, employee feedback platforms and cloud-based performance management solutions.
The value of these tools depends on how they are used. A simple one-page performance conversation guide can be more effective than an expensive platform if managers use it well.
Performance Management Courses, Certification and Books
People searching for performance management courses, performance management certification or a performance management book are often trying to build confidence in how to manage performance fairly and effectively.
A useful learning pathway can include a performance management book for theory and evidence, performance management courses for practical tools and examples, performance management certification for structured professional development, manager training for difficult conversations, and coaching or supervision for complex people situations.
Aguinis’s Performance Management is a useful academic and professional text for understanding the field (Aguinis, 2019). For readers who want to connect performance management with inclusion, power, complexity and organisational behaviour, Inclusive Leadership: Navigating Organisational Complexity offers a complementary lens (Walsh, 2024).
Inclusive Leadership 101 and ELIS Advantage course materials also support managers and HR professionals to build practical capability where performance management needs to become more inclusive, reflective and needs-based.
How to do Performance Management with or without a Formal Process
A formal process is useful when an organisation needs consistency, documentation, fairness, data and shared standards. This is especially relevant as organisations grow, operate across locations, manage hybrid teams, or make decisions about promotion, pay, performance improvement or succession.
A formal process can include goal-setting, regular check-ins, mid-year and end-of-year reviews, feedback from stakeholders, development planning, manager calibration and HR guidance.
Without a formal process, leaders and managers can still create a simple rhythm:
Weekly or fortnightly: short check-ins on priorities, blockers and support.
Monthly: review progress against goals and adjust priorities.
Quarterly: discuss performance, development, workload and contribution.
Twice yearly: review role expectations, growth and feedback patterns.
Annually: summarise achievements, learning, contribution and next-stage priorities.
The key is not the formality of the process. The key is whether people know what is expected, receive timely feedback, have access to support and experience fair accountability.
Common performance management mistakes
Common mistakes include confusing activity with performance, delaying feedback, using vague language, individualising systemic issues, ignoring high performer sustainability, separating performance from inclusion, over-relying on software, and measuring what is easiest to see rather than what matters most.
Performance management becomes more effective when managers look at evidence, context, patterns, needs, barriers and impact before deciding what action to take.
Performance Management as Everyday Leadership Practice
Performance management is not only about improving individual output. It is about creating the conditions where people can understand the work, do the work, improve the work, talk about the work and take responsibility for the work.
A formal process can help. A good software platform can help. HR guidance can help. But the real quality of performance management usually lives in everyday leadership practice: the clarity of expectations, the fairness of feedback, the courage to address what is not working, and the willingness to understand the wider context before judging the person.
The ELIS Advantage view is that high performance requires everyone’s needs to be included. This does not soften performance management. It strengthens it. It makes performance management more accurate, more human, more evidence-informed and more effective.
To review your current performance management approach, develop your managers, or design a more inclusive and effective performance management framework, book a consultation with ELIS Advantage.
References
Aguinis, H. (2019). Performance management (4th ed.). Chicago Business Press.
Chartered Institute of Personnel and Development. (n.d.). Performance management: An introduction. CIPD.
Chartered Institute of Personnel and Development. (2025). Effective performance management: Guide for HR professionals. CIPD.
DeNisi, A. S., & Murphy, K. R. (2017). Performance appraisal and performance management: 100 years of progress? Journal of Applied Psychology, 102(3), 421–433.
Kluger, A. N., & DeNisi, A. (1996). The effects of feedback interventions on performance: A historical review, a meta-analysis, and a preliminary feedback intervention theory. Psychological Bulletin, 119(2), 254–284.
Locke, E. A., & Latham, G. P. (2002). Building a practically useful theory of goal setting and task motivation: A 35-year odyssey. American Psychologist, 57(9), 705–717.
Pulakos, E. D., Mueller-Hanson, R., & Arad, S. (2019). The evolution of performance management: Searching for value. Annual Review of Organizational Psychology and Organizational Behavior, 6, 249–271.
Walsh, S. (2024). Inclusive leadership: Navigating organisational complexity. ELIS Institute.
Walsh, S. (2026). An exploration of the perceptions and experiences of inclusive leadership in for-profit organisations in Ireland and the UK [Unpublished doctoral thesis]. Canterbury Christ Church University.