Performance Management System: All You Need To Know

Performance management system plays an important role in planning strategies & developing. By applying blockchain, you have better results.

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In recent years, the performance management system has played an essential role in planning strategies and developing the progress of projects. In this article, let’s follow me to discover what a performance management system is and the benefits of implementing blockchain in the performance management system.

What is performance management system?

Performance management system is the systematic approach to evaluating the performance of employees. That is a process through which the company efficiently allocates its mission, goals, and objectives with feasible materials, resources, and systems and then sets the priorities. 

Aptitude, proficiency, and knowledge gaps are also identified through this process, which can be improved by providing guidance, training, coaching, and mentoring to employees or teams at different levels and designations. It optimizes the results through the proper channel and process, which reduces conflicts and discomfort among teams or employees. 

Since each individual is aware of the expectations of his or her role, they make their effort to meet the standards of performance. This procedure can be used in a single department or throughout the entire organization. Its goal is to constantly monitor and measure performance standards in relation to the desired goals and objectives.

The purposes of the performance management system


A performance management system is a tool that should be aligned with overall organization goals, including general goals and individual goals. It should be linked with every activity to encourage the organization to achieve its mission, goals, and objectives.


The performance management system is one of the important, exclusive, and deciding factors when considering promotion, demotion, salary regulation, and terminations. Therefore, it defines the administrative role of the business and supports the business’s decisions.


Performance system is a really effective means of communication to announce to employees their goals, job responsibilities, key deliverables, and performance standards. Hence, the employees determine their own goals and link them to the company’s goals.


It is a method of communicating positive feedback, areas for improvement, and development plans in a structured manner. The manager can use various methods like training, mentoring, coaching, etc., and their team members will perform better.

Organizational maintenance

The performance management system serves as the yardstick for evaluating performance gaps and measuring employee, department, and organizational achievements. As a result, it preserves the organization’s health and performance standards.


Every organization should document and maintain performance management reviews, feedback, and forms on a regular basis. It would enable them to look forward, set new targets, design developmental needs, design training, and learning programs, and track the career progression of employees and the department. Hence, it helps in driving the organizational needs towards desirable objectives.

Benefits of performance management system

Let’s check out the most popular benefits of the performance management system below:




  • Determine the targets of the policy, plans, and result indicators achieved in constructing the policy and its goals.
  • Unify organizational forces and encourage other factors to gain success as soon as possible.
  • Follow and assess the progress that has been made versus the one that was suggested.
  • Detect the drawbacks which still exist in the project and offer effective methods to tailor to handle them timely
  • Allow offering more complimentary works in order to boost the working quality of the organization, company, and staff.

Key elements of a successful employee performance management system


Why should businesses implement Blockchain into performance management system?

For all employees in an organization, the performance management cycle plays an important role in their career as it is associated with recognition, salary increments, and next steps for growth. It is a major activity where senior leaders, line managers, and the HR team put effort into ensuring people are recognized and rewarded for ethical contributions to the organization’s goals and values. While this process is governed by a central authority (HR) and takes a long time to validate, analyze, and display, the result is considered the problem statement.

While managers spend 210 hours a year on performance management, and employees spend 40 hours a year on the process, it can become more time-efficient and error-free using the new technology.

In more detail, the performance management system can be re-designed with decentralized governing authority and the result can be automated with the help of Blockchain (Distributed Ledger System).

How to implement Blockchain in performance management system?


Performance management is another essential record-keeping activity that should be implemented as a private ledger. Every year, a block is created which contains that year’s goal setting, targets accepted with all required measures. This block can be accessed by all in the organization to add feedback, appreciation, or areas for improvement. 

When an assignment is allocated, the corresponding manager can add a block that can be validated by the line manager, the skip-level manager of both assignees, and assigned along with HR if necessary. After completing the assignment, the assignee will provide feedback for that block.

If there is any mistake, the validation process will prompt the same. This will surely provide a greater employee experience as there is transparency in the process, and it reduces bias or subjectivity. Final feedback can also be recorded in the same blockchain, which again is changed. 

It is undeniable that a performance management system brings an enormous number of good points for blockchain businesses, despite little harm. These advantages are still maintained, improved and applied to evaluate the employees’ working quality in general. In 5 or 10 years, many companies will appreciate the performance management system, and they will overcome some of its drawbacks to support their mission, goals, and objectives.

What are the consequences of a poor Performance Management process?


What if the CEO does not believe in the value of this system and, as a result, does not accept responsibility for making it a reality? What if the CEO, in the best-case scenario, delegated accountability to the HR Director? The answer is business losses, such as quality losses, failure to meet deadlines, a lack of product/service/process innovation, inter-departmental conflicts, and customer relations losses.

In such an environment, many good employees leave, and the remaining ones have second thoughts (“should I stay or should I go?”). And, in the absence of clear performance criteria, one criterion remains open: “it doesn’t matter, who cares?”

As a result, it is time for executives and managers to stop taking “poor performance” personally.

The following suggestions may be extremely beneficial to any CEO or entrepreneur:

  • To accept full responsibility for the company’s approach to performance management.
  • Together with his team, he will create a process for cascading strategic objectives to the departmental level, allowing executives to understand how to create a similar process from the department to each employee.
  • To train oneself or others in order to know what to do next at each stage of the process
  • To set aside time and adhere strictly to the schedule for individual conversations with direct reports in order to clarify WHAT, HOW, WHO, WHEN.
  • To schedule time for reinforcement and redirect feedback as actions occur, rather than waiting for someone to say, “a few times ago…”
  • Listen to each team member’s personal ambitions and collaborate to find the best way to channel that energy toward both business and personal development goals.
  • To assist HR professionals in becoming internal experts in performance management and to instill in them the importance of quality over quantity, such as “nice” statistics on form completion.


It is obvious that the performance management system is one of the most effective methods in promoting the performing mission’s progress. All the boards of CEOs should apply and modify this method with new technologies like blockchain to improve its quality because it contains many potential benefits.

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