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Performance management cycle (PMC) is a process used by employers to evaluate employee skills and job performance, set goals, and offer guidance for improvement. The cycle includes planning and goal setting, progress reporting, and review evaluation, with a final performance review determining salary increases or changes in employment status.
A performance management cycle (PMC) is a technique used by company executives and managers to encourage employee growth and job satisfaction. Within a PMC, the employer evaluates an employee’s skills and job performance. The employer will typically also set goals to help careers develop in a way that is consistent with business goals for the employee. If an employee is unable to meet the goals and expectations outlined by the company, a performance management cycle usually offers an integrated system of improvement, typically starting with direct counseling for problem areas. While initial goals may be established by the company when an employee is hired, the performance management cycle usually does not officially begin until the first performance review, typically after the first year on the job, but earlier in some cases.
While each company typically develops its own plan for performance management cycles, the basic cycle typically includes three phases: planning and goal setting, progress reporting, and review evaluation. When it is time for the first performance review, the employer will evaluate the employee’s work as performed during the specified time period. After providing the employee with a comprehensive evaluation of his or her job performance, the employer will usually advise the company’s goals for him in the next review period.
Depending on the employee’s skills and status, this can include anything from improving problem areas to getting the desired promotion. Some employers may also use this stage of the performance management cycle to set ultimatums: If the negative aspects of an employee’s job performance don’t improve, her job or position could be at risk. Managers can also offer guidance, suggestions or ideas on how the employee can achieve his or her goals during the next evaluation period.
Once goals have been set, there is usually a progress report scheduled where the employer will touch ground with the employee and discuss the development of their goals. If the employee is on track to meet the goals set by the company, no further action can be taken. Additional goals can be added if the employee is ahead of schedule. If there are reasons for concern about the employee’s performance, however, further guidance can be offered.
At the end of the PMC, it is usually time to review the employee’s performance for the entire evaluation period. The employee can receive a raise reflecting the progress made if the employee achieves his or her goals. If the goals have not been met, the employer may choose to create more manageable goals, continue with existing ones, or reevaluate its need for employee services.
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