Understanding the Performance Management Cycle

Understanding the Performance Management Cycle

Performance management is often considered as simply performance reviews and appraisals. However Michael Armstrong in his Handbook of Performance Management defines performance management as   “the continuous process of improv­ing performance by setting individual and team goals which are aligned to the strategic goals of the organization, planning performance to achieve the goals, reviewing and assessing progress, and developing the knowledge, skills and abilities of people.” The key word of this definition is continuous which means the performance management is an on-going activity and one-time or once a year event.” Therefore, when looking at performance management, it is important to look at the different stages of the performance management cycle

The Performance Management Cycle

Plan – setting clear performance expectations and goals for individuals in order to achieve the organizations goal. In setting these goals it is involve setting S.M.A.R.T. objectives. These are:

  • Specific – answering the question what is to be done
  • Measurable – looks at how you will know you have achieved the expectation in measurable terms.
  • Achievable – looks at if the person can do it within the time frame and resources that are provided
  • Relevant – looks at if the objective is aligned with the organizations objective and the employee’s role
  • Timely – looks at when it will be done. This means that the objective has a built-in deadline by which the person is expected to have it completed.


Act – This is the process where the individual will seek to achieve the objectives and carry out the roles given.

Monitor – This is the process of consistently measuring performance and providing feedback to the employee on their progress.

Review – This is the process of reviewing the employee’s performance with respect to the goals that have set.

Though it is defined as a cycle it is important to note that there are no arrows indicating order in the diagram. This is because the flows do not naturally into each other. The Act and Monitor aspect might be continuous throughout the year but the Review process might be a once-a-year event and the planning aspect might take place throughout the year and re-reviewed based on the organizations needs.