Implementing A Performance Management System (PMS)

A Performance Management System is about building trust, capacity and a respectful partnership between a manager and each of their employees. Some people see performance management as trendy words for the annual performance review. It’s Not… it’s much more! This is especially true if the organization is transforming and leading change.

In a time when employees don’t feel their employers are loyal, a Performance Management System is a commitment by employers to partner with their employees and help them reach their work goals, career goals and personal goals by investing in opportunities, mentoring, encouragement and training.

In a time when employers don’t feel employee loyalty, a Performance Management System is a commitment by employees to understand and respect the organizational values and to do their best to support the organizations strategic plan and improve team / organizational effectiveness.performance-management-plan-for-success

Note: One-Year plans are common for full-time employees. Part-time or seasonal employees still participate in Performance Management, but goals may be measured by project or a shorter time-period.

Step 1: Co-Developing A One-Year Performance Management Plan

Performance Management Systems define how an organization will support its employees as they pursue a set of goals. It also defines how each employee will support a department and/or organization strategic plan.

To set a One-Year Plan, each employee and manager should:

  1. Review the employee’s job description to ensure it is up-to-date and reflects the work the employee is doing and appropriate measurement criteria. This is especially important if the organization is leading change and transformation.
  2. Review how the employee’s work supports the teams and the organization’s goals, objectives and strategic plan.
  3. Identify three to five employee performance objectives for the year. These should be specific and measurable and dependent on:
    • The organization’s strategic plan
    • Key deliverables that are associated with the employee’s responsibilities
    • Employee goals
  4. Recognize that at some point, unexpected opportunities and crisis will happen and will have unexpected (positive and or negative), impact.
  5. Develop a more detailed work plan (tasks / tactics), based on the three to five employee performance objectives.
  6. Specify the consequences for the employee and the organization if they are responsible for the performance objective not being met.

Note: Experienced managers and employees will leave time for unexpected opportunities/crisis (practicing good Time Management).

Step 2. Monitor A Performance Management System / Year Plan

To be effective, performance must be continuously monitored. Therefore, when implementing a performance management system be sure to include an agreed upon way to monitor progress. In today’s work environment where autonomy, relevance and progress are important, monitoring refers to measuring results for both the employees and the organization.

One approach to monitoring I particularly like was introduced to me by one of my previous bosses; it’s what I call ’10-minute laser meetings’. In this case, my boss met with each of his employees once a week for 10-minutes to discuss critical issues on major projects. For each of these meetings, it was each employees responsibility to chair these meetings and be prepared to:

  • Introduce the project and what success looks like (the performance objectives).
  • Share what progress has been made towards meeting the performance objectives.
  • Identify any barriers that may prevent the employee from accomplishing the previously agreed upon performance objectives. (Get management input and support here)
  • Suggest what needs to be done to overcome any barriers. (Get management input and support here)
  • Identify if there has been a shift in organization priorities or if the employee has assumed new / unexpected responsibilities. (Get management input and support here)

Defining the appropriate measurement criteria is one of the most difficult parts of developing the strategic year plan. Remember people often respond better to positive reinforcement vs. punishment. I strongly recommend considering the value of intrinsic motivation to help managers encourage employees.

Step 3. Managing Shortfalls

Sometimes there will be shortfalls. Sometimes those shortfalls are outside of an employees control… and sometimes they are within the employee’s control. In the cases where performance fell short of objectives…

  • Stay positive and cordial – good rarely comes from hostile behavior.
  • Document the challenges/shortfalls encountered:
    • Answer the What, Where, Why questions.
    • Did the challenge fall within or outside of the employee’s control?
  • Are the change management and transformation plans impacting the project?
  • Identify opportunities for coaching… by the manager or professional executive coach.
  • Give constructive feedback in a non-threatening way.
  • Identify areas for training and development.

Throughout the year (perhaps quarterly), managers should formally assess each employee’s performance. The beauty of the laser meetings mentioned above (for example), is that both the manager and employee have up-to date examples of how goals are… or are not being met; there should be no surprises.

Step 4: Continuous Coaching / Having Difficult Conversations

Coaching / mentoring and managing shortfalls can be done by the manager or by bringing in a professional executive coach.

Implementing a performance management also means making sure everyone feel comfortable having difficult conversations. Learning how to give constructive feedback in a non-threatening way helps everyone address performance issues in a productive, supportive way and ensure that even challenging moments lead to a positive contribution.

The role of the coach is to demonstrate good listening skills and to deliver honest feedback. In a coaching role, the manager is not expected to have all the answers… but they do ask questions that help the employee and themselves analyze the situation. Coaching means working with employees to identify opportunities and methods to maximize strengths and improve weak areas.

Mentoring can include providing constructive feedback to address a particular performance issue if an employee is not meeting the agreed upon performance expectations. The beauty (and my belief), importance of weekly 10-minute laser meetings is that challenges or shortfalls are identified early and don’t have time to become critical issues… they are taken care of early when they first arise.

Step 5: Employee Training and Development Plan

A critical part of a Performance Management System is for the manager and each employee to identify areas for further training and development opportunities. These should support the workplace activities that the employee should undertake as well as their career goals and personal goals.

This step should not be taken lightly.  Training and development opportunities must be supported and pursued by the employee, their manager and the HR department. All parties involved must take a leadership role – no matter how high or low on the seniority scale they are.

The main goal here is to find, mentor, train and motivate… and therefore retain top talent all while also leading strategic corporate change. Hiring and training new people is a great expense compared to a modest training and development investment. This is a critical component to the long-term success of a Performance Management System… I cannot emphasis this benefit enough.


A Performance Management System is a much more than recapping performance once-per-year with an annual performance review. As I said above, this is especially true if the organization is transforming and leading change.

Performance management includes activities such as joint goal setting, continuous progress review and frequent communication. The idea is to ensure resources like talent are valued and maximized (monitored and respected), as much as resources like technology, equipment and finances are monitored and respected.

Happy communicating, mentoring, motivating… and leading change.

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