“Your performance depends on your people. Select the best, train them and back them. When errors occur, give sharper guidance. If errors persist or if the fit feels wrong, help them move on.” – Donald Rumsfeld
The situation is all too familiar – another caption in a corner of a page in the newspaper, another individual who burned out too early because of stress, work and pressure. In some cases it is the slacker holding back the team, everyone suffering for the sake of a few. Companies across India and the world all suffer in this manner and the situation is grave enough to raise concern and make people sit up and listen, to try and make some sort of a difference.

Companies often struggle to draw the line between pushing for greatness by encouraging hard work, and pushing their employees over the edge due to the immense work pressure involved. Companies cannot afford to compromise on efficiency and output, and therein lays the problem. How can the situation be made more humane without incurring losses? How can the employee and the employer remain happy? 

In order to help in this very manner, the concept of performance management came to be. A revolution began in the industry, originating from the HR department. Performance management is a process through which continuous assessment of the work done by members of the organization is reviewed, organized and allocated. It may seem like any other standard review but it is not. Performance management is an individualistic approach to the matter, and quite different from the statistics oriented annual reviews employees are usually subjected to.

Need for Performance Management 

Through continuous assessment, companies can ensure that their staff is working in the best manner possible. From guiding those who are lagging behind, or perhaps moving them to another area where their performance can be improved further, to rewarding those who perform consistently, rather than those that succeed once at a big event, it is truly transforming the way the competitive industrial world functions.                                                        
As a result, employees feel as though they are given a more fair assessment, and employers receive great insight into the reality of the functioning of their systems. 

The need for this revolution may be questioned, yet it is most definitely a necessary change in the way the industry functions. Starting from the companies in the forefront, such as IBM and Microsoft, the adoption of performance management techniques has spread far and wide, including a wide range of IT companies across India. Studies show that with the annual review system, 2/3rd of performance management systems identify the wrong individuals as high performers. Further, an incredible 98% of various HR managers, CEOs and company employees interviewed found the annual performance review system to be redundant. 

The revolution can be seen throughout industries, across the world. Studies conducted by Deloitte shows that a vast majority of firms are considering reformation of their current performance management system. This reformation is of critical importance – it is integral to ensuring the smooth functioning of the company, and maintaining as well as strengthening the employer – employee relationship that is often forgone in the name of output driven work culture.

In India, the need for performance management is on the rise. Particularly in the highly competitive, highly taxing IT industry, employees are bound to feel as if they are unfairly evaluated if a single annual review is the only insight their employers base the assessment on. Performance management is ‘feedback friendly’, which highlights the two-way approach it takes towards performance reviews. This is what makes it highly popular amongst employers and employees alike.


A study by Cognology produced significant results. Australia was one of the first countries to be a part of this revolution, and therefore it is an ideal case to consider when evaluating the usefulness of performance management. This output showcases the essence of performance management, while also providing some insight into its benefits; one significant aspect that is highlighted is the fact that reviews occur up to three times more often. Adaptation of such a system to the Indian context may seem to be a difficult task, but it is most definitely a worthwhile one. 

The ‘Bell curve’ system of performance appraisal, as the annual system was often known as, has been removed from a number of major companies, including the Indian industrial giant Tata Consultancy Services. They now perform assessments at regular intervals instead of annually, and this move has been acclaimed by GlobalHunt India, which stated that reformation of the performance management system is integral to retaining the high performance, high potential, and highly talented individuals within the firm. 

Reformed performance management approach is gaining traction, and rightly so. The benefits are far reaching for all those involved – be it the employers, employees or the company as a whole. It is important to remember the goal of performance management systems to start with – the maximization of employee efficiency and effectiveness is being achieved. However, in the quest to achieve this, the importance of each contribution to the whole must not be forgotten or overlooked. 
“When feedback is included as part of regular, ongoing performance discussion throughout the year, the employee, the manager, and the organization are all better off.” – Shawna McKnight
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