• Retention

  April 4, 2023

Key Components of an Effective Performance Management System

Several elements are involved in the success of a performance management system.

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3 min read


A performance management system is intended to clarify the job expectations of employees but also to help develop their abilities, often through on-the-job training. It’s in developing abilities that you can tap into the motivation of your employee.

When hiring, you will have ideally looked for employees who embrace challenges, persevere in achieving their goals, and enjoy being a positive, contributing member of a team. Employees with these attributes will be motivated by taking on challenging goals and putting effort into the company’s success.


The culture of a company is simply how you do things in your company. When you set clear expectations of what employees are to do for their jobs, you can also set expectations about how they do their jobs. These expectations in most successful companies include ways of acting such as honest and timely communication, collaborating on projects, being friendly and responsive, suggesting new ideas, or any number of other ways of acting that will move your business forward.

How you establish the culture of your company is by stating the expectations clearly and simply and then consistently modelling these ways of acting on the job. Clear expectations remove any uncertainty employees may have and encourages them to work harder for your company. It also doesn’t hurt if they are recognized for their efforts and achievements with a public thank-you or a reward, such as a bonus, extra time off, a promotion, or something else that is personally rewarding to the particular employee.


Another key element of performance management is providing effective feedback. A recent concept of ‘feedforward’ instead of feedback has been suggested. Feedforward focuses on the future (we can’t change the past) and allows people to learn the correct way to do something instead of focusing on what they did wrong. This way of looking at corrective actions is not taken as personally as feedback while covering the same material. It’s also often faster and more efficient because people feel less need to justify their actions.


Performance conversations typically include five or six topics to be covered with all employees, such as career growth and direction, contributions made to the organization, collaborations engaged in, innovative ideas and initiatives, and general observations the employee has about his or her performance of the last period of time. Topics may also be found in the strategic goals of the organization, or expectations of employee behaviour outlined in the company’s values or culture statements.

The conversation typically involves asking the employee a few questions and then listening to the responses and possibly probing a little further. This process will provide much more information about what the employee is doing, the successes and obstacles they face, and resources or training needed than a simple observation, evaluation and ranking.

A performance conversation can be recorded with a simple record form or summary statement and the outcome can even be translated into a rating, with, for example, a 3 (out of 5) for employees who meet all expectations, 4 or 5 for those contributing more, and 1 or 2 for those not performing to expectations. In the last case you will want to implement a process, and possibly some training, for the employee to improve his or her performance and, if this is not successful, a dismissal process.

Supervisors or managers holding performance conversations may also benefit from some training in such skills as asking open, thought-provoking questions, effective listening, using paraphrasing or summarizing to extend thinking, setting goals and gaining commitment to action, and providing an overall framework to guide the conversation.


Possibly because performance reviews have been, and often still are, so dreaded, they are done only annually at best. Supervisors are often expected to review activities that occurred a year ago, about which often both the supervisor and employee have forgotten.

A more relaxed and productive performance review system would involve clarity, modelling and job training, understanding an employee’s motivations, focusing on the future with feedforward, and holding performance conversations.

These techniques have led to situations where employees take the initiative to come to supervisors to troubleshoot or ask for advice to repair a mistake before it becomes a crisis.

Initially it will likely be the supervisor who initiates these conversations, but doing so more frequently, even on a monthly basis, will keep meetings shorter, lead to more accurate and proactive results, and generate more success for the employee and for the company. Everyone wins.


go2HR is BC’s tourism & hospitality, human resources and health & safety association driving strong workforces and safe workplaces that deliver world class tourism and hospitality experiences in BC. Follow us on LinkedIn or reach out to our team.

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