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Why is a Good Performance Management System Important?

Why is a good Performance Management System Important

A performance management system is geared towards ensuring that employees’ performance remains in line with the goals of an organization.

Apart from keeping tabs on employee performance, the performance management system measures the strengths and weaknesses of the employees so that an organization is able to develop the talents of its workforce.

There is no denying that talents are the backbone of every organization. When it comes to improving the overall performance of a business, the use of a good performance management system is vital.

1. Motivate the Employees

To spur the growth of an organization, the motivation levels of the employees and managers must be maintained. A good performance management system ensures that employee performance appraisal is carried out from time to time.

This enables an organization to determine employees who have been outstanding in their performance. From this, the management will be able to reward the employees accordingly using a reward system.

Every organization needs to understand the importance of rewarding employees based on their work output. When employees know they will be rewarded based on their performance they will be more motivated to give their best.

2. Meet Training Needs

An employee’s skill set is of huge importance to every organization.  It can make or break the growth of a business.

A performance management system is essential to enable the management to discover employees’ training needs and provide suitable training to them to improve employee performance and productivity.

3. A Clear Understanding of Goals

Every employee is required to have a sound grasp of the objectives of an organization. They need to understand their place in the organization to be able to contribute to its overall success.

A performance management system enables business managers to align their workforce with the goals set by the organization. This makes clear the priorities of the organization and helps the employees understand what is required of them.

When employees have a clear understanding of the direction in which an organization is headed, they will know what responsibility is expected of them to enable the company to remain on that trajectory.

4. Gain a Deep Insight Into Employees’ Talent

Employees are integral to the growth and success of a business. Their roles and performances determine whether the organization continues to follow the planned route.

With the use of a performance management system, organizations can gain a deep insight into the talents of their employees. As a result, organizations are able to assign roles that fit the employees better and increase the chances of success.

5. Enhance Employee Engagement

If employees trust the performance management system used by their organization to be fair, unbiased and transparent, they will feel valued and motivated to do what is required of them.

In addition, for employees to be fully engaged, communication has to be clear and concise. Good communication enables employees to understand an organization’s goals better.

In this regard, an HR system or software that comes with corporate communication and team management features, such as EasyWork, can help greatly. Based in Malaysia, EasyWork is built for startups, emerging companies and established companies to help improve work productivity through technology.

6. Maintain Consistency

A surefire way of discouraging an organization’s employees from putting in their best performance is establishing a muddled management system.

When a good performance management system is in place, an employee performance appraisal can be carried out regularly to determine a job promotion. This is essential when it comes to empowering the employees.

7. Improve Employee Autonomy

Employees tend to work better when they are unsupervised. Once they understand the objective of the organization, they are free to make decisions that will enable them to carry out their responsibilities.

This increases productivity and efficiency at work. A good performance management system provides a systematic approach to measure the performance of employees without heavy supervision.


Organizations are assured of regular feedback and insights of employee performance when a good performance management system is in place.

Today, more organizations around the world, including Malaysia, are using HR software for performance management, which is vital in improving employee job satisfaction, boosting employee morale and improve work productivity.


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