What does the phrase Performance Management mean exactly?

performance management

Several phrases bounce of the walls of business’ offices with regular intervals:


Change management


Critical thinking

Performance management

And the list goes on and on….

Anyone can express these terms within whatever context they like, it is however, a different matter altogether to apply and to receive a return on investment from these principles.

In this blogpost we will focus on the practical meaning and application of Performance management.

First, to be realistic and fair we must consider the fact that the 2020 Covid-19 pandemic has changed the face of Performance management.

On top of the many forced changes we face the paradigm shift to remote work is now a reality.

Utilising the context of ‘the new norm’ as a foundation for a discussion on Performance management a general equation that elaborates on the meaning of Performance is:

Performance = Potential – Interference

When we consider business performance of course the financial performance of the business is a critical success factor towards the sustainability of the business. The word potential carries various meanings yet within the context of this writing it can mean:

  • The potential for market penetration
  • Individual employee’s potential in terms of leadership and technical skills
  • Potential can refer to the possible profits that can be generated
  • Scalability is another factor to consider that is related to potential

The sources of interference can be numerous. Politics, changes in market demands, resistance to change from employees, negative communication are all examples of interference.

Effective Performance Management is the ability to increase the Performance of your business by maximising the potential of your company and by minimising the interference that all companies naturally face in various forms.

Performance management is no simple task, yet it can be simplified by applying a combination of the right leadership, soft skills, technical skills and technology that will drive and empower your business sustainability and success.

What follows are three key factors to consider within the context of Performance management:

  • Leadership capacity
  • Hiring the right people
  • Performance management technology

Leadership is the ability to inspire people. Uninspired people find it extremely hard if not impossible to perform and do their absolute best in a sustainable way. There is nothing wrong with managing people through meetings, trainings, standard operating procedures etc. When the focus on managing people is too strong and at the expense of inspiring people your companies’ performance will eventually pay the price for that imbalance.

Leaders create a Performance culture of a truly inspirational vision, a strong sense of purpose, a shared value system and win the hearts and minds of their people.

Leaders actively seek to avoid the interference of a toxic culture. A toxic culture can be described as a business culture where slow work, poor work quality, negative attitudes, absenteeism, and other factors are at the order of the day.

When you fail to hire people whom are inspired by your companies’ vision and purpose and whos’ general behaviour do not align with your company values the financial performance(Turnover and profit) of your business will suffer the consequences. It is only a matter of time.

The purpose of technology, in general is to, simply put, make our lives easier. Especially considering remote work we need systems and technologies that empowers our businesses and workforce to do their best work.

Performance management software that blends the inspiration of Leadership and continuous learning with clear goals and Key Performance indicators when correctly applied will uplift the performance of your company.

Ideally, sustainable performance management means to continuously make more money for your company and at the same time give your workforce a purpose driven fulfilling career that makes a positive impact in society.

To Learn more about how you can improve the performance of your company, contact us at Flowy Team:


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