Employee performance management plays a vital role in helping workers understand and meet their goals. In this blog, we look at three ways employee performance management benefits employees, managers and organizations. 

Employee performance management is “the continuous process of identifying, measuring and developing the performance of individuals and teams to align their performance with the strategic goals of the organization.” 

It’s an important part of business because it helps ensure employees understand their responsibilities and how they align with the organization’s overall objectives. When that happens, employees feel that they are valued and an integral part of the organization.

With today’s tight labor market, it’s more important than ever for organizations to implement effective employee performance management systems. Doing so helps increase employee retention, improve management control and reduce organizational costs.

3 Benefits of Employee Performance Management

1. Increases Employee Retention

Employee turnover is a major concern for companies right now. A record 4.5 million Americans quit their jobs in March 2022, and those numbers are expected to continue to rise. As a result, organizations are looking for better ways to retain talent, and employee performance management is one of those solutions.

Unlike annual reviews, which only happen once a year, employee performance management allows employees to meet with their managers on a regular basis. This provides more consistent feedback on how an employee is performing, including what they are doing well and how they can improve.

The continuous feedback loop keeps employees engaged with their jobs and makes them feel like they are consistently learning and improving. Likewise, an effective performance management system will reward employees who meet their objectives, creating a positive environment where companies accomplish their goals and employees feel valued for their contributions. As a result, employees are more likely to be satisfied with their roles and stay with their organizations.

2. Improve Management Control

Management control is “the process through which the management of an organization influences other members to implement the strategies laid down by the company.” 

One of the main objectives for managers is to help their employees achieve the goals established by the senior leadership team in a specific amount of time.

For example, suppose an enterprise organization sets out to increase employee productivity by 10% over a single calendar year. The managers then relay this information to employees and set them on a path to success.

Employee performance management improves management control in a couple of ways:

1. It gives employees clear objectives that are based on data.

2. It allows managers to properly plan, develop, monitor, rate and reward employee contributions.

When an employee fully understands their role and what’s expected of them, they are more likely to succeed and be rewarded for their efforts. If the objectives are unrealistic, the performance management system in place can pick up on those problems as they arise and the leadership team can adjust their objectives as needed. From there, the managers are empowered to help their employees with any necessary improvements, while the employees feel that their efforts are valued.

3. Reduce Organizational Costs

Costs are rising for everyone, including enterprise organizations. In March 2022, inflation was at its highest level since the 1980s. With the trend likely to continue for some time, it’s important for companies to reduce organizational costs wherever possible. Employee performance management can help.

Through employee performance management, managers clearly relay an organization’s objectives to employees, everyone can remain on the same page and work towards the overall goals. Any changes to the objectives can be implemented quickly so that employees have more time to pivot and realign.

This helps to prevent project overruns and improves employee satisfaction, which leads to less turnover and lower hiring costs. That’s huge savings since it costs around $30,000 to $45,000 to hire and train a replacement for an employee salaried at $60,000. And when your employees stay, they are able to pass on their knowledge to other employees, and everyone benefits.  


Employee performance management plays an integral part in the success of enterprise organizations. It helps to boost employee retention, drive management control and decrease organizational costs. This results in empowered employees and profitable companies.

Employee performance management software allows enterprises, managers and employees to align objectives so everyone knows what’s expected at all times. The right platform offers a user-friendly dashboard that gives employees a snapshot of how they’re performing along with feedback from their managers.

If an employee isn’t on track to meet their objectives, the platform alerts managers who can step in to help the employees course-correct sooner than later. Not only does this save time and money, but it also makes the employees feel that the organization cares about their success.

HRSoft’s employee performance management solution, PERFORMview, creates better business results for enterprises. See how it works by requesting a demo today.