Performance Management: Brief Overview of Key Terms (generic to performance management)

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Adapted from Field Guide to Consulting and Organizational Development

Organizations try to manage the performance of each employee, team and process and even of the organization itself. The performance management process is very similar, regardless of where it is applied. Information in this topic describes the general performance management process. The information is customized for each application in the topics Employee Performance Management, Group Performance Management and Organizational Performance Management.

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Readers will benefit most from having first read the subsections What Do We Mean by "Performance"? and Overall Goal and General Process in the section Basic Overview of Performance Management.

Key terms include

organizational goals
organizational preferred results
aligning results
weighting results
performance plans
observing, measurements and feedback
appraisal / review
performance gap
development plans

The following basic terms will be described more fully later (through use of an example) in the library in the upcoming subsections Performance Plan and Development Plan.


The domain is the focus of the performance management effort, e.g., the entire organization, a process, subsystem or an employee. A subsystem could be, e.g., departments, programs (implementing new policies and procedures to ensure a safe workplace; or, for a nonprofit, ongoing delivery of services to a community), projects (automating the billing process, moving to a new building, etc.), or teams or groups organized to accomplish a result for an internal or external customer. A process produces a product or service for internal or external customers, and usually cuts across multiple subsystems. Examples of processes are market research to identify customer needs, product design, product development, budget development, customer service, financial planning and management, program development, etc. The final domain is that of employee performance management. The term domain is not widespread across performance management literature.


These are usually the final and specific outputs desired from the domain. Results are often expressed as products or services for an internal or external customers, but not always. They may be in terms of financial accomplishments, impact on a community, etc. Results are expressed in terms of cost, quality, quantity or time.


Measures provide specific information used to assess the extent of accomplishment of results. Measurements are typically expressed in terms of time, quantity, quality or cost. Results are a form of measure.


Indicators are also measures. They indicate progress (or lack of) toward a result. For example, some indicators of an employee's progress toward achieving preferred results might be some measure of an employee's learning (usually expressed in terms of areas of knowledge or specific skills) and productivity (usually measured in terms of some number of outputs per time interval). (Note that learning and productivity alone do not guarantee accomplishment of performance results.)

Organization's Preferred Goals

These are usually overall accomplishments desired by an organization and are often established during strategic planning. The level of specificity of goals depends on the nature and needs of the organizations. Typically, the more specific the goals, the clearer the understanding of goals by the members of the organization.

Organization's Preferred Results

The performance management process often includes translating organizational goals to be in terms of results, which themselves are described in terms of quantity, quality, timeliness or cost.

Aligning Results

Performance management puts strong focus on ensuring that all parts of the organization are working as efficiently and effectively as possible toward achieving organizational results. Therefore, the results of all parts of the organization should be aligned with the overall preferred results of the organization. Aligning results often includes answering questions such as "Does the domain's preferred results contribute to achieving the organization's preferred results? How? Is there anything else that the domain could be doing to contribute more directly to the organization's goals?"

Weighting Results

Weighting results refers to prioritizing the domain's preferred results, often expressed in terms of a ranking (such as 1, 2, 3, etc.), percentage-time-spent, etc.


These specify how well a preferred result should be achieved by the domain. For example, "meets expectations" or "exceeds expectations".

Performance Plan

The plan usually includes at least the domain's preferred results, how the results tie back to the organization's preferred results, weighting of results, how results will be measured and what standards are used to evaluate results.

Ongoing Observation, Measurements and Feedback

These activities include observing the domain's activities in terms of progress toward preferred results, comparing progress to the preferred performance standards and then providing ongoing feedback (useful, understood and timely information to improve performance) to the domain.

Performance Appraisal (or Review)

In its most basic form, performance appraisal (or review) activities include documenting achieved results (hopefully, by also including use of examples to clarify documentation) and indicating if standards were met or not. The appraisal usually includes some form of a development plan to address insufficient performance. (More about this plan below.)


The performance review process usually adds information about rewarding the employee(s) if performance met or exceeded standards. Rewards can take many forms, e.g., merit increases, promotions, certificates of appreciation, letters of commendation, etc.

Performance Gap

This represents the difference in actual performance shown as compared to the desired standard of performance. In employee performance management efforts, this performance gap is often described in terms of needed knowledge and skills which become training and development goals for the employee.

Performance Development Plan

Typically, this plan conveys how the conclusion was made that there was inadequate performance, what actions are to be taken and by whom and when, when performance will be reviewed again and how. Note that a development plan for employee performance management may be initiated for various reasons other than poor performance. (More on this later in Development Plan.)

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