Performance management is one of the most effective approaches to goal setting, monitoring and performance evaluation. Objectives arise from the organisation’s strategy and are cascaded down to individual employees, in accordance with MBO principles. All goals have their weights, are time-specific and monitored, and can be unambiguously evaluated. Performance management is also an important building block of the company’s strategy, enabling a constant control of its effectiveness.

Management by Objectives

Management by Objectives is a management approach which assumes that motivated and committed staff are company’s most valuable asset. It focuses on joint goal setting (managers together with their subordinates), identification of indicators of desired results and periodic review of outcomes.

Competency Management

A performance appraisal system based on competencies and objectives is a great point of departure for a coherent HR management system. In developing a competency model the organisation gains a tool which serves as the basis for various activities, from hiring through performance appraisal and compensation to development and career planning.

The appraisal system makes it possible to hire a new employee on the basis of the evaluation of key competences which are relevant to the person’s future tasks and responsibilities.

During performance appraisals, in order to monitor development, we can evaluate the same competencies that were evaluated upon hiring. Based on the information obtained from the appraisal, we develop training programmes and design career paths within the company.

The compensation system is based on performance reviews. Compensation is strictly related with the evaluation of competencies, and thus with alignment to the company’s goals and values, as well as with the individual achievements of the employee.

When making decisions about promotions, we evaluate the employee in respect of the key competencies needed for the new position. Employees find it very transparent and clear. The system and its concept remain unchanged – the only variable element are the evaluated competencies.