The 101 Guide to Creating a Performance Management Policy in minutes

Create clarity and engagement by communicating how performance management works in your organisation. Build your policy in minutes with our performance policy builder.

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A New Type of Performance Management Policy

It’s easy to hear the term “performance management policy” and picture a list of rules and procedures that is only dug out of storage when someone needs disciplining. A document of little relevance to most employees, with limited uses, but one the organisation still needs to spend resources reviewing and maintaining each year.

However, this represents an enormous, missed opportunity. Research suggests that organisations with a strong link between the performance management process and organisational vision benefit from improved organisational goal setting and achievement of mission statements. A relevant, proactive, and accessible performance management policy is a simple yet effective tool for nurturing everyone’s understanding of organisational goals and how their day-to-day tasks contribute to them. Building this document requires three key ingredients:

1. Your performance management philosophy

What is the purpose of having a performance management process?

Taking time to consider this question is something most people in the organisation won’t do (it’s not part of their job), so if it’s not communicated to them, the process can seem irrelevant and distracting from everyday work. Connecting organisation priorities such as employee growth, a culture of feedback, or team cohesion to performance management can have a great impact on buy-in.

2. Drivers and Objectives

What are the goals and drivers for performance management and how do these link to organisational vision?

Most organisations have vision statements, yet the connection to the performance management process is ambiguous. Detailing the objectives and drivers of performance management legitimises its strategic significance in the eyes of employees at all levels.

3. Framework Overview

How does performance management actually get done?

Here the document gets into the specifics of responsibilities, cadences, and expectations for how goals will be set, reviews will be conducted and feedback will be handled. These are known as “performance management procedures” and make up most of what employees think of when they think of a performance management policy.

Example Performance Management Procedures

Performance management procedures outline specific processes the organisation uses to implement its vision of performance management. Generally centred on a process of goal setting, regular feedback and a performance review, performance management procedures include:

  • How goals are set and aligned across teams/levels
  • Which goals are public and which are private
  • How often feedback is shared and whether anonymous or not
  • How often managers should host 1-on-1 meetings with each team member
  • What activities should be covered in 1-on-1s throughout the year
  • When and how reviews are conducted
  • If and how reviews are calibrated
  • How to create a development plan

The outcome of these procedures goes far beyond the traditional review process. Modern performance management practices help generate engagement, focus employee development, and nurture a positive culture.

You may choose to include additional procedures that make sense for your organisation such as checking in with remote employees, when engagement surveys are launched or the inclusion of a lightweight interim review to ensure goals are aligned more regularly.

Each organisation has a unique philosophy and purpose for performance management and a tailored performance management policy will help communicate the experiences you wish to nurture. Ensuring these performance management procedures are aligned with your culture and ways of working, as opposed to a generic template, will help achieve far greater levels of buy-in, adoption and success for your performance management activities.

3 Use Cases for your Performance Management Policy

As collateral for briefing the board

Often, the board is ultimately responsible for the governance of performance and aligning organisational policies with its strategic objectives. A document linking the strategic goals of the organisation to the day-to-day operations of performance is great collateral for interactions with leadership.

To influence culture

Investment in company culture requires proactivity. New starters presented with a complete, relevant performance management policy clearly understand what’s expected of them and how performance management works in the organisation. The performance management policy may be shared at key moments of the performance cycle such as goal setting or review time to help set expectations for upcoming activities.

To help improve success (performance)!

When a policy document outlines the philosophy, goals, and vision for performance, it can work as a tool for aligning behaviours across employees and managers for a consistent approach. Modern performance procedures will help you scale a fair, data-backed, and growth-oriented performance management process that will achieve success for both your organisation and your people.


Every organisation needs a performance management policy, but all policies are not created equal. A rich, relevant policy document connecting the activities of performance to the company's strategic goals and vision can be a great tool for driving engagement, briefing leadership and influencing culture.

Still, stuck on how to get started? We’ve created a tool to generate a tailored policy document to get you on track.

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