1Top management. There should be clear agreement and commitment among the top
management on strategy, goals, measures and performance targets to be implemented
within the organization
2Involvement and participation. The involvement of all employees towards achieving the
established performance parameters is crucial. Involvement of managers and employees
in developing and implementing a performance management system enhances trust and
ownership of the performance measures. Clearly defined measures of performance
would enable the managers to select an adequate performance management system for
their organization
3Review process. The managers should be focused on continuous review of the
performance management system, so as to determine whether the actions plans to fill the
gaps between performance measures and goals are being achieved or not. The focus of
performance management system should be on improvement and learning rather than on
control
4Feedback. A prompt and formal feedback system must be enabled for successful
performance measurement. Efficient communication and feedback system would detect
any loopholes within the system and would aid the manager to rectify it.
5Compensation. A well defined compensation plan must be introduced for the employees
so as to avoid any discrepancy.