Performance management may incorporate job design, recruitment and selection, training and development, disciplinary procedures and counselling, career planning, compensation and benefits and performance appraisals.

• A successful performance management system should:
• incorporate performance improvement, development of teams and individuals, and behavior management to ensure productive working relationships
• have structures which support the effective functioning of the performance management system.
• ensure that employees:
• know and understand what is expected of them in their job role (i.e. performance objectives and performance standards)
• have the skills and knowledge required to deliver on these expectations through implementing development plans and learning and development activities
• are given feedback and an opportunity to discuss their work performance
• are rewarded for their performance through a reward and remuneration strategy
• are counselled for underperformance and/or behavior which is out of alignment with organisational values and/or inconsistent with achievement of organisational goals
• are supported by the organisation to achieve optimum performance.

A well-structured and implemented performance management system provides a number of benefits to the organisation, management and employees. These benefits include:

• establishing group and individual performance objectives to ensure that their performance is aligned with the organisation's strategic and operational objectives
• linking performance evaluation and employee development and rewards to motivate individuals
• assisting the organisation in improving its productivity and efficiency
• regular monitoring of progress toward achievement of performance objectives
• identification of specific training needs across the organisation
• improved salary administration
• improved communication and relationships between managers and staff members
• improved guidance and assistance in developing capabilities and potential of staff members.