Performance Management (PM), in the past, has only been about picking up information to base performance appraisals on. Thankfully now, the top-level executives of many organizations have realized the importance of a good PM system and are actively exploring various ways these processes can catapult their company performance and grow their people.

However, as long as PM processes are considered as once a year activity, nothing is going to change. CEOs of organizations have to recognize PM as their priority task and spend time and effort in analyzing their current processes and exploring newer tools and techniques that can bring a significant contribution to their business performance.

What is a Performance Management System?

Performance Management System (PMS) is a set of processes and tools that are aimed at aligning individual goals with business goals and creating an environment with activities that make it easy to monitor progress and make changes wherever necessary to keep these goals aligned and relevant to the current business outcomes.

An effective PMS can measure and improve the contribution of an employee to the organization. Gone are the days when such contributions were qualitative and difficult to measure. With the current PM tools and techniques, you can quantify results, efforts, and skills and make it easy to create specific changes across all levels.

Why is Performance Management important from a CEO’s standpoint?

A good Performance Management System (PMS), when handled right, can bring unbelievable results and a holistic change to your business and your teams. Here are some ways that an effective PM system can help from a CEO’s standpoint.

  • Align individual goals with overall company goals
  • Help identify high-performing employees and motivate them to grow
  • Make it easy to define career paths inside the organization
  • Identify areas for training and development
  • Improve employee satisfaction and retention
  • Drive organizational growth
  • Encourage feedback and conversation within the organization
  • Help build quantitative solutions to problem-areas

How does it help organizations to be more agile?

Agility is one of the critical factors that differentiate successful organizations from the rest.

Agility is defined as the ability to think, understand, and move quickly. It is the act of being alert.

An agile organization should be able to adapt to internal and external changes quickly and successfully. Changes are inevitable. The tools you used yesterday may be irrelevant today. The processes your teams have followed for so long may quickly change, creating turbulence in the ability to perform. Industry standards and requirements may change without forewarning, requiring you to unlearn everything and start from scratch.

An agile organization should be able to take on all these challenges, quickly adapt to these changes, and still perform better than the others in the industry.

Why do CEOs need it?

Why do CEOs, of all people, need to prioritize performance management? Did you know that a CEO controls about 45% of the company’s entire performance? This is the only peerless role in the company and is powerful and influential.

In a lot of organizations, the only part that CEOs perform in the performance management processes all through the year is approving/rejecting appraisal budgets. This has to change if PM processes actually need to matter.

A CEO invariably plays a role in deciding organizational goals. However, do they control individual and team goals and check if they align to the overall goals?

This is not easy in a large organization. Here is where a PM tool comes to help. With clear-cut goal alignment process throughout the hierarchy and dashboards that offer a bird’s eye view of the goal-setting across the company.

How can a CEO help implement performance management practices at the workplace?

There are a few decisions that only the CEOs can nudge and make. A few of such decisions concerning performance management practices can be game-changers for the organization. Here are ways how a CEO can help ensure success of performance management practices at the workplace.

Spread the word across

You would be surprised to know that more than 95% of employees in an average sized-firm do not understand or know the company’s big-picture or overall goal. This is according to a 2005 study by the Harvard Business School. How will your team work towards the big picture if they have no idea what it is?

Start by spreading the regular word about the company’s goals for the year. You can use townhouse meetings, send out emails, flyers, or use visual presentation media to ensure your employees are familiar and aware of the goals of the organization. This makes it easy for them to align their performance to match requirements. Best is to use technology platforms like PossibleWorks to drive this communication organization wide through the Objective sharing.

Play a role in monitoring the alignment of goals

The individual goals of your teams have to compliment the overall organizational goal. As a CEO, you need to create proper alignment between such goals. By doing this, you help fast-forward growth in a direction beneficial to the team.

Make use of data and analytics

You will be amazed at the kind of rich data that some of these PM tools like PossibleWorks can gather. It is very easy to get a clear idea of your team’s progress by just looking through the analytics that these tools generate. Use the data to make changes to the PM process and identify scopes for improvement. This makes the PM process more effective and fruitful.

Justifying your investment in PM process and tools

Investing in a new PM process or tool could be expensive. Who other than the CEO can justify this investment? For you to justify the costs, you need to believe in the change the PM can do and also be able to quantify some of the benefits.

Look at the larger picture

What is the long-term goal of the company? Is it achieving a particular sales target or is it creating a successful workplace that runs independently, stays motivated, and takes the brand to higher levels? If it is the latter, then it is your duty, as a CEO to look at the bigger picture and prioritize performance management. A successful performance management process keeps the system oiled and lubricated, making functioning seamless.


In a competitive world, performance management is a must to increase employee engagement and productivity. 

The CEO is the biggest decision-maker of any organization and that is why it is vital that they understand what a good PM process can do to their business. A CEO needs to make bold moves, stay agile and active, and constantly learn and unlearn based on current market needs.

When the CEO prioritizes performance management, this reflects positively on the team and helps set clear strategies and expectations across all levels. Changing your performance management process can be challenging at the onset. However, this is an essential change you have to face eventually and the earlier you adapt to the same, the quicker you will head towards achieving your goals.

PossibleWorks’ Performance Management System makes use of Objectives and Key Results (OKR) frameworks coupled with  Conversations, Feedback, and Recognition (CFR) frameworks to create agile Performance Management strategies that are effective and provide consistent results.

Would you like to learn more about our Performance Management tools and processes and understand how they can help your brand grow? Get in touch with us.

Checkout our Ultimate Guide to OKRs to learn more Or Book a Demo

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