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What Are the Benefits of a Performance Management System

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Benefits of Performance Management System

A good performance management system always works in improving the performance of an organization. An effective performance management system (PMS) plays an important role in managing the organization performance. performance management system contributes in organizational benefits, employee benefits and manager’s benefits and has a positive influence on the job satisfaction and loyalty of the employees. A well managed performance management system has clearly defined goals and regular assessment of performance of all individual employees and hence helps in developing training and development plans required for the employees.

A well managed performance management system plays an important role in managing the performance in an organization by:

  • Employees understand the importance of their contribution towards organizational goals and objectives.
  • Each employee understands what is expected from them and ascertaining whether the employees possess the skills required to perform a job
  • Ensuring proper alignment of objectives and helping in communication throughout the organization
  • Helps in a cordial relationship between an individual employee and the manager based on trust.
  • It also provides scope and opportunity for incentives, rewards, performance and career development.
  • Based on the output of the employees performance management system helps to discover the training and development needs for the employees.
  • It helps in strengthening the bond between management and subordinates.

Importance of performance management system

  • Performance management system helps in reducing conflicts among peers and the subordinates and thus helps in improving the performance.
  • All the employees including supervisor and managers would be highly motivated.
  • It helps to improve the organizational performance and helps in retaining employees and improving their productivity.
  • Motivated employees would be more loyal and thus management will have valuable employees
  • Performance management system helps in achieving job satisfaction
  • It provides ample learning opportunity and helps in career growth of the employees.
  • The employees will grow in maturity and responsibility if their efforts are judged
  • An employee who gives low output can be spotted and dismissed with more certainty. Similarly high performing candidate can be rewarded which would be more fair and accurate.

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