Employee ExperienceLearning and Development

Strategic Performance Management

4 Mins read

Strategic Performance Management definition comes up as: “Performance measurement, monitoring as well as improvement methodology that assist in operating successfully.”

What is Strategic Performance Management?

To guarantee that everyone is working toward the same aim, strategic performance management aligns personnel with the broader corporate plan through the use of defined objectives and expectations, leadership, and communication.

Only 2% of firms presently derive “exceptional value” from their performance management systems, according to a recent Mercer poll of 1,154 HR leaders. This can be the result of an excessive concentration on the objectives of specific employees rather than sufficient alignment with company goals. Individual goal-setting is practiced by 83% of businesses, although in 56% of them, it is connected to business unit goals.


Strategic performance management can help in this situation. It lays a strong emphasis on organizational strategy and how it is being carried out through advances in workforce skills and employee performance. You can more effectively close the gap between low-level business transformation and on-the-ground performance by implementing strategic performance management.

Balanced Scorecard

A balanced scorecard, in its simplest version, is a well-liked strategic performance driver that places each employee’s performance at the intersection of four significant factors:


How does an employee affect the income of the company? By enhancing company outcomes, how can employee performance directly link to changes in share prices?


How did employee performance improve the effectiveness and efficiency of internal processes? Did a certain process have a standout employee? Was employee involvement important in achieving significant internal change?


Has staff performance resulted in higher customer satisfaction ratings (CSAT)? Do other measures of customer success, such as churn, customer lifetime value, and net promoter score, indicate an improvement? Has the business been effective in expanding its clientele?


Has the company’s capacity changed as a result of employee efforts? Has the company’s scalability increased as a result of its increased manufacturing capacity? Over the measuring period, how many innovative innovations have been presented and adopted?

These four factors are used to rate employees, and the sum of those results represents their total performance score. Some businesses use a numerical scale of 1 to 5, with 1 representing completely below expectations and 5 representing greatly above expectations. Others may use a descriptive style, rating things as “needs improvement,” “meet expectations,” and “above expectations.”

Every performance metric must, of course, be clearly conveyed to employees, taking into account each employee’s competence and capacity, and establishing alignment from the very beginning to ensure the establishment of clear expectations.

4 Key Elements of Strategic Performance Management

Further in this article, we will analyze 4 key elements that you can easily add to your current processes. 

Measure the performance with more factors than KPIs

The factors that affect performance are effort, process, behaviors, aptitude, and occasionally luck. You should take them into account when evaluating employee performance using a strategic performance management strategy. 

Similarly, why not incorporate these principles into your employees’ performance reviews if you value innovation, adaptability, and creativity throughout your company?

Bernard Marr encourages the usage of the following questions: 

  • What objective or issue will this KPI enable our organization to achieve?
  • What choice will this KPI influence?

Staff will be able to recognize and work toward specific goals or areas for development if you use these questions to create relevant KPIs for each of the members. Additionally, it highlights the significance of their position within the company and how and why their efforts matter.

Communicate the Goals and the Visions

Strategic performance management places a high priority on communication, which has a significant impact on worker performance and engagement. For instance, you can encourage more alignment between employees and your organization in terms of their ownership over those goals, identification with your business, and dedication to the cause by clearly articulating your firm’s vision, purpose, values, objectives, and accomplishments.

Practically speaking, cascading bigger company goals into smaller ones that are delegated to teams or individuals, creates greater efficiency in bigger succeeding and achieving goals.

Offer Constructive Criticism

Have you ever left a performance review hearing “keep up the excellent work” or entered one hearing “you’re doing a terrific job”? These remarks are pleasant to hear at the moment, but they don’t really help with performance or career growth because they don’t have any supporting evidence or recommendations for improvement (because there’s always space for improvement).

Instead, your employees want honest, precise, and actionable criticism to help them offer better work quality. Giving timely feedback is essential for fostering staff development.

Recognition and Rewards

Recognition is the last stage in strategic performance management. Everyone enjoys being acknowledged in different ways, whether it be through a private thank-you or a big shout-out. Because of this, it’s critical to understand each employee’s motivations and reward their efforts appropriately. Giving credit where credit is due will make workers happier, more engaged, and more productive.

Performance Management

Benefits of Strategic Performance Management

1. Employee motivation will increase. Your company is managed by people, not only by figures. Your approach will be more likely to be successful if you encourage the personal growth of employees in every department and at every level. 

2. Management will advance rapidly. The management group should be completely aware of the requirements of their department. It will empower them and subsequently benefit their team if they are aware of the objectives, principles, and initiatives they are working toward.

3. More effective communication will be promoted. The majority of employees don’t actually understand the company’s strategy, which is one of the key reasons why businesses are unable to synchronize it across the entire organization. Employees will reevaluate their preconceived notions when strategy is well communicated, which will improve problem-solving, critical thinking, and decision-making. The benefits of that are for everyone!

4. The development of an excellence-oriented culture. Organizations develop strategies, departments establish specific tasks to carry them out, and individuals coordinate their behaviors and cognitive processes accordingly. This technique gives the staff a voice and enables the management team to collaborate with their departments more successfully. This pattern of exceptional performance is a great sign that your plan is functioning.


To incorporate Strategic Performance Management in your company as well, we suggest the following:

  • Analyze your corporate objectives;
  • Analyze the results of your analysis to determine your progress;
  • Find out where you are succeeding and where you need to improve;
  • Implement and monitor your plan to make sure it is effective for you.

Read More:

Job Mapping: Top 3 Free Templates
Open Enrollment Checklist for Employees

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About author
Fatjona Gërguri is the content writer for Employee Experience Magazine, covering the relevant topics about employee experience, organizational culture and general HR topics.
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