Performance Management Cycle

Understanding the basics

Performance Management Cycle

Understanding the basics

Understanding and using a performance management cycle adds a structure and process to a manager’s efforts to help others to reach their potential. 

There are numerous versions of the cycle, each essentially following a common management process of:

  • Reviewing what has been done;
  • Planning what needs to be done; then
  • Putting those plans into action.

Here we introduce a standard version, illustrated with some interesting quotes. You might find these useful as a starting point but to help you put them to work immediately, we’ve developed a practical resource: Motivating Performance. This e-guide explains the model in more detail and provides you with 10 practical tools, for each stage of the cycle.

First though, let’s consider the basic steps of the cycle.

A Basic Performance Management Cycle


The first stage of a conventional performance management cycle is the plan. Broadly speaking, this identifies future performance requirements in terms of targets, actions and behaviours. The plan should challenge the individual but also be achievable. Ideally, it should allow that person to combine existing expertise with their potential for development.

Plans must also address the alignment of priorities, including those of the individual, their team and the organisation as a whole. For the plan to work it also requires focus, both on what is to be achieved and how that is to be done. Finally, the plan requires commitment from all involved. As Peter Drucker argued:

Unless commitment is made, there are only promises and hope; but no plan.


The second stage of a basic performance management cycle is the development of the individual’s expertise and potential. The development phase should focus on both improving current expertise, and on allowing new skills or knowledge to be gained, particularly where there is evidence of potential. At this stage it’s crucial that managers identify opportunities, then provide coaching and other support as needed (or available).

Remember Thomas Edison’s salient advice:

Opportunity is missed by most people because it is dressed in overalls and looks like work.


There are several factors to consider when managing the way people perform. Firstly, plans and potential can count for little unless they are used to deliver something meaningful. In a work-based performance management cycle, this must relate to the needs of individuals, their teams and their organizations.

Secondly, there is deep satisfaction to be found in doing something well, and it’s much easier to excel when using your strengths. Good managers ensure they help their colleagues do just that. Allow and encourage your people to do what they do best, preferably on a regular basis. As Peter Drucker once explained:

Those who perform love what they’re doing. Pianists have a wonderful expression I heard years ago: ‘I practice until I have my life in my fingers.

Finally, and underpinning both of these points, ensure your people have the resources they need to be able to perform. Clearly there may be limitations beyond the manager’s control here. Nonetheless, it’s unfair to expect improved performance without the right tools to enable it.


The final stage in most performance management cycles is the performance review. This is designed to allow both parties to the process to consider how achievements have met the goals set during the planning stage. A review looks at results, both tangible and intangible, and provides the springboard for determining where to concentrate efforts as the cycle returns to the planning stage.

Performance management will not work very well if it’s only seen as an annual process. The performance management cycle works best if it’s used as a series of mini-cycles, throughout the year. Then, when it comes to a more detailed review and planning session, there should be no surprises. Regular performance reviews keep you in constant touch with what is happening, and helps build a more effective performance management process. Remember, performance management is all about performing. As Henry Ford astutely observed:

You can’t build a reputation on what you are going to do.

The missing link

Many performance management models have one crucial element missing: motivation. In motivating performance we have put motivation back at the heart of performance. In this resource you will find 10 practical tools covering each stage of the performance cycle, designed to help you start improving performance today.

We’re also aware that many managers find it helpful to review their own skills, particularly as managing performance is so central to effective management. With this in mind we’ve developed a resource to help you with your performance management skills.

Performance Management Skills

Whether you need a quick refresher or are thinking about your skill needs for the first time, performance management skills provides the practical advice you need. With five essential performance management skills for each stage of the performance management cycle, you can use it to assess your own strengths in each of the five areas:

  • Cultivate your goal setting skills
  • Improve your action planning
  • Develop your coaching skills
  • Provide feedback
  • Assess performance

Managing performance is one of the most important things a manager does. Yet it’s a role that many managers find the most difficult to do.

Think about how you can build your own expertise to manage the performance management cycle, so that you can put motivation back at the heart of performance.

Our performance management resources are some of the most popular in our store. Like many other visitors, you might be interested in the complete set of performance management resources. These have been conveniently bundled together, to address all aspects of performance (this bundle includes the resources and tools mentioned in this article).

Including a colossal 253 pages and 95 tools, this bundle contains 8 key guides we recommend to help you manage better performance, at half price!

It’s All About Performance (24 pages, 4 diagnostic tools)
Managing Performance and Potential (26 pages, 4 tools)
Conducting a Performance Review (33 pages, 8 tools)
Manage Your Own Performance (28 pages, 6 tools)
Motivating Performance (37 pages, 10 tools)
Performance Management Skills (19 pages, 7 tools)
15 Performance Management Tips (20 pages, 15 tips)
Performance Management Toolkit (66 pages, 41 tools – divided into the seven steps of a performance management process).

I am designing a new Management Development programme for my company and your Goal Setting guide has really helped.

I like the way you introduced material I haven’t seen before (SHARP action) & the tools to apply the learning. The price represents really good value for money and I will be checking out more of your material over the coming months.

Matthew - UK

... really interesting and helpful thank you.

… really interesting and helpful thank you.
Really enjoyed session – thought provoking.
Promoted lots of thinking around staff skills. Excellent, keep doing these sessions. Very useful, definitely use these principles.

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