What Is a Performance Management Model?

The performance management model is a tool and method for studying the main factors affecting performance, the mechanism of performance management, and key control links.

Performance management model

Performance management refers to the continuous cycle of performance planning, performance communication and guidance, performance assessment and evaluation, application of performance results, and improvement of performance goals in which managers and employees at all levels participate together to achieve organizational goals.

The performance management model is a tool and method for studying the main factors affecting performance, the mechanism of performance management, and key control links.

The main factors affecting employee performance are: employee skills, external environment, internal conditions, and motivation

The mechanisms by which performance management comes into play are:

By setting reasonable goals for the organization or individuals, establishing an effective incentive and restraint mechanism to enable employees to work in the direction expected by the organization, thereby improving personal and organizational performance;

Through regular and effective performance evaluation, affirm the achievements and point out the deficiencies, reward the behaviors and results that have contributed to the achievement of the organizational goals, and restrain the behaviors and results that do not meet the organizational development goals to a certain extent

Through this incentive mechanism, employees are encouraged to develop their own capabilities, improve their working skills, and improve their working methods to achieve higher levels of personal and organizational performance.

It can be seen from the performance management model that in order to achieve a virtuous circle of performance management, the following three links are very important: the target management link, the performance assessment link, and the incentive control link.

The core issue of the goal management link is to ensure the consistency of organizational goals, departmental goals, and personal goals, and to ensure that personal performance and organizational performance are simultaneously improved. This is the main problem to be solved in the performance plan formulation.

Performance appraisal is the basis for the effectiveness of the performance management model. Only by establishing a fair, just and effective evaluation system and accurate measurement of the performance of employees and organizations, can we reward those who perform well and motivate those who perform poorly. If there is no performance evaluation system or the results of the performance evaluation are inaccurate, the incentive objects will be misaligned, and then the entire incentive system will not work.

In the performance management model, the incentive effect plays a very important role. The incentive effect depends on the product of the target valence and the expected value. The incentive effect will only be large if the target valence and the expected value are both high. Target valence refers to the degree to which individuals are rewarded for achieving the goal, or the degree of punishment for individuals who fail to achieve the goal. Expected value refers to the probability that an individual will achieve a goal and the probability that an organization's commitments will be fulfilled. Only when these two possibilities are relatively large, the expected value is sufficiently high.