Some of the major roles of the performance management system are as follows:
1. Enables Goal Alignment: The performance management system enables the alignment of the goals of the employees with that of the organization in order to get the desired results.
Goal alignment produces a synergistic effect that ties employee contribution to organizational success.
2. Facilitates Employee Development Plan: A performance management system facilitates the development of an employee development plan, which is crucial to an organization’s success.
Since management is about developing people through work, therefore the development of their skills and competencies results in improving individual, team, and organizational competence and performance.
3. Creates Consistency in Performance Guidelines: The performance management system creates one unifying system which ties the performance goals and objectives of the organization with all the employees.
Therefore, employees’ performance criteria or performance plans are driven by a performance management system rather than the subjective judgments of managers.
4. Generates data and Information for Better Results: A performance management system generates a wide array of data and information which can be used for improving individual contributions, internal business processes, customer processes, technical processes, and gaps in these areas.
5. Fosters Proactive Communication: A performance management system encourages proactive communication between managers and employees for aligning goals to business strategy.
It helps in clarifying various doubts or gaps and builds effective rapport between managers and employees.
6. Retains Talent: The performance management system provides opportunities for every employee to excel in their role. This helps in identifying and developing employees with high performance and high potential.
These employees are rewarded well by the organizations to retain them.