Understanding the Performance Management Cycle: a Guide

Published on 
Apr 27, 2023
Would you like to know more about the performance management cycle but don't know where to start? Keep reading and learn more.

Did you know that nearly 8 out of 10 employees are disengaged from their careers? And of those leaving their jobs, most said it was because of a lack of appreciation?

Recognition and feeling involved at work don't have to feel complicated. Implementing a fast and iterative performance management cycle can increase retention.

Don't worry if you don't know what a PM cycle is or how to implement one because you're in the right place. Keep reading to learn everything you need to know to improve managing team accomplishments in your workplace.

What is the performance management cycle?

The performance management cycle is a series of stages every employee goes through to review their successes. Traditionally, this cycle occurs once a year and usually coincides with the employee's anniversary date.

The performance review is a vital part of training, encouraging, and retaining great employees. However, many employees feel their work isn't reviewed often enough. And that it doesn't contribute to their growth on the job.

A great PM system can help you solve the second half of that problem, and speeding up your PM cycle will solve the first half.

At regular intervals, each leader at your company will review their team member's progress toward reaching their goals. And ensure their personal goals align with growing the organization and reaching company-wide goals.

The goal of managing performance has four parts:

  • Plan for the coming year
  • Look at each employee's goals for their career
  • Align their daily tasks with the company goals
  • Encourage each employee to improve their performance

An effective cycle offers team members a management tool to help continually monitor progress and performance levels. Each employee should have written goals that drive their career forward. All the while also moving the company toward reaching its goals.

And each manager should have an efficient process for monitoring and tracking where each of their team members is in their journey.  

The 4 stages of the PM cycle

Regardless of the timeline for your PM cycle, you'll have four distinct stages each employee must work through to reach the finish line.

This can be done quarterly or annually. However, remember that shorter cycles give more momentum toward reaching goals faster. They also offer better monitoring and rewards when your team reaches its goals.


The first stage is to sit down with each employee and assess where they currently stand with their career and their personal goals. Then determine how each employee can align their personal goals with specific company objectives and goals.

Write out specific and measurable goals for each employee. Then create a Personal Development Plan so that each member of your team can see how their daily actions align with accomplishing larger goals.

You can also create milestones that your employee will reach while they're working toward their goals. This will give both employees and managers a sense of how well they're achieving their objectives.


The second is the action phase which is usually the longest stage of each employee's performance management cycle. This is when each team member will carry out their Personal Development Plan and take action toward achieving their goals.

This is the day-to-day part of every employee's job. And over time, without the right recognition and reviews, your employees can begin to feel disconnected from their careers. You can avoid this feeling of disconnect by aligning your team's actions with their goals.


As your employee is going through the action stage of the cycle, you will track their progress. Also, encourage them to continually make progress toward their goals within the established timeline.

Your team will benefit from a tool that helps them monitor their progress and reach their milestones along the way. You can use a simple spreadsheet to track this. However, these can be difficult to update regularly and hard for everyone to see their progress.

With management software such as Mesh, your team can see in their dashboard where they stand and what next actions they need to take to ensure they reach their goals. Tracking your goals doesn't have to be hard when you use the right management tools.

In addition, you can quickly see your entire team at a glance. Then you can see where to focus your energy and encouragement to ensure each of your team members reaches their objectives.


Finally, at specific intervals set a time to sit down and review progress. You can do this monthly to assess where each team member is hitting their milestones or falling short.

You'll want to schedule a larger review quarterly to discuss with each team member how they're doing. After you review their accomplishments, determine their plan for the next cycle.

An effective review should be streamlined but should also entail valuable employee coaching. Your team member should leave knowing how well they did in their previous cycle. They should also be able to articulate what their next goals are for their next cycle and what lessons they learned in the last cycle that can help them improve in the future.

A performance management cycle is an iterative approach to performance management that offers insight and discussions to improve upon the last cycle.

Benefits of using a performance management cycle

From boosting productivity to improving communication there are several benefits to implementing a PM cycle. The first, and most important is that your team can see how their personal goals align with company goals and make a difference in the big picture. Too many employees feel disconnected and unhappy with their careers.

You can change this by implementing an effective PM system that encourages your team rather than feels like a chore each year. Additionally, another benefit is that team members feel appreciated and recognized when you implement the right PM cycle.

Managing the performance of your team shouldn't feel like micromanaging or babysitting. The right program can instead offer rewards and recognition for a job well done. And when you shorten the cycle to monthly or quarterly rather than annually your team members feel validated and valuable.

Finally, streamlined reviews offer your top talent the feedback they need. This will increase retention and keep your top employees happy and connected with their careers.

Reach company objectives with the PM cycle

As you can see an effective performance management cycle can help you to better coach and retain top talent within your organization. You can't afford to lose your best employees. When you implement the PM cycle using a top software program such as Mesh you won't have to worry about it any longer.

You can learn more here if you're ready to see why Mesh is the best software for your team to bring your performance reviews into the 21st century.

About the Author


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