The performance management framework

Performance management is the continuous process by which a manager and an employee agree what good work looks like, track it, review it and act on the result, so that each person's work points at what the organisation is trying to do. A performance management framework is the structure that makes that process repeatable: the stages, the order they come in, and what each one has to produce.

This page sets out the framework the Institute for Performance Management teaches. It has five stages, runs as a cycle, and sits inside an organisation's culture, which decides whether any of it works.

The IPM Performance Framework

Stage	What happens	The question it answers
1. Align	Each role's measures are linked to the organisation's strategy and objectives	Why does this work matter?
2. Agree	Manager and employee set objectives that can be assessed: what, the measure, by when	What does good look like?
3. Evidence	Progress and examples are recorded through the year, as they happen, by both people	How do we know?
4. Review	The appraisal conversation: results rated against the agreed measures, with self and 360 input where useful	How did it go, and why?
5. Develop	A development plan for growth, or an improvement plan where there is a gap, built with the person	What happens next?

1. Align

Every role's measures should trace back to something the organisation is trying to achieve. When they do not, people can hit every target and still contribute nothing that matters, and managers end up rating activity. Alignment is a cascade: organisational objectives become team objectives, which become the basis for individual ones. See OKRs versus KPIs for two common ways of expressing them.

2. Agree

Objectives are agreed with the person rather than issued to them, and written so that they can be assessed at the end: what will be delivered, the measure and the date. Development agreed with someone produces effort; development imposed produces attendance, and the same is true of objectives. There is more on writing them in developing performance goals and objectives.

3. Evidence

The stage most organisations skip, and the reason so many annual reviews are reconstructed from memory in the week they happen. Both manager and employee note results, examples and feedback as they occur. This is where continuous feedback performance management lives: regular check-ins that keep the record current and let problems surface in month two rather than month twelve.

4. Review

The appraisal: results rated against the measures agreed in stage 2, using the evidence from stage 3, with the employee's own assessment and, where useful, 360 feedback from peers and direct reports. A good review contains no surprises, because anything important was raised when it happened. The performance review template and 360 review template follow this structure.

5. Develop

What the review leads to. For most people that is a development plan: skills to build, experience to gain, and the support to do it. Where there is a gap against the standard, it is a performance improvement plan written with the employee, after the cause has been diagnosed. The cycle then begins again with the next period's alignment and objectives. See also the cycle of development in performance management.

Culture: the ground it stands on

The same five stages produce engagement in one organisation and box-ticking in another. The difference is whether feedback is an ordinary part of work or an annual event, and whether people believe the process is there to help them improve. A framework cannot fix a culture, but it can make it obvious where the culture is getting in the way. More in building a performance management culture.

How often each stage runs

Evidence and Develop run continuously. Align, Agree and Review run at least once a year, and quarterly in organisations whose priorities move faster than an annual cycle can track. Fast-growing companies usually need the shorter rhythm; see the performance management needs of fast-growing companies.

How it compares with other models

The US Office of Personnel Management describes performance management as five component processes: planning, monitoring, developing, rating and rewarding (OPM overview). The IPM framework covers the same ground with two differences. It starts one step earlier, with alignment to strategy, because objectives set in isolation can be met without helping anyone. And it treats evidence as a stage of its own, because monitoring that is not written down rarely survives to the review. Reward is handled within Review and Develop, since practice varies so widely between organisations.

Questions

What are the five stages of performance management?

In the IPM Performance Framework they are Align, Agree, Evidence, Review and Develop. The US Office of Personnel Management describes five component processes instead: planning, monitoring, developing, rating and rewarding. Both describe a cycle that runs through the year rather than a single annual event.

What is continuous performance management?

Running the evidence and development stages all year through frequent check-ins and feedback, rather than saving everything for an annual review. The annual review does not have to disappear, but it stops being the only point at which performance is discussed.

What is the difference between performance management and performance appraisal?

Performance appraisal is one stage of performance management: the review in which results are assessed. Performance management is the whole cycle, from aligning roles to strategy and agreeing objectives through to development afterwards.

Do small organisations need a performance management framework?

They need the stages, though not the paperwork. A ten-person company that agrees clear objectives, keeps notes through the year, talks about them honestly and acts on the result is running all five stages.

Where this is taught

The framework follows the syllabus of the Certificate in Performance Management: strategic alignment is module 2, the performance management cycle module 3, goals and objectives module 4, development plans module 5, appraisals module 6, underperformance module 7 and culture module 8. Module 3 is open as a free trial. The course is online performance management training for managers and supervisors, about ten hours, and assessed by exam.