What is Performance Improvement?

Jessica Ellis
Jessica Ellis

Few businesses ever reach a point where efficiency is completely maximized; in order to continually reach toward new goals, many businesses use a continually evolving process known as performance improvement. There are many different kinds of performance improvement programs, but most share a basic cyclical framework.

A performance review may be used to help improve and monitor performance.
A performance review may be used to help improve and monitor performance.

There are several basic steps involved in a performance improvement program. First, current performance levels must be analyzed through a period of close monitoring. Next, reasonable performance goals are set. Analysis of current performance is examined to determine areas where there are gaps and hold-ups that keep performance from reaching desired level, and strategies are worked out to reduce or remove these options. Once performance improvement strategies are integrated into the daily work plan, the process of monitoring begins again.

A performance improvement plan can boost morale and increase productivity.
A performance improvement plan can boost morale and increase productivity.

Performance improvement may be done on varying schedules; some companies opt for quarterly or trimester reviews, with small changes being made after each review period and larger changes being implemented on an annual basis. Other businesses may have an ongoing performance review and improvement program, one that is sometimes handled by an entire department. Large companies may need the most intensive performance improvement programs, since performance variables will mount as more people and larger operations are added to the equations.

The use of performance improvement techniques can benefit all areas of a business. Improving the efficiency, reputation, and scope of a business requires that all elements of the company work together fluidly. This interdependence can be a wonderful thing when managed correctly, but also means that what seems like an isolated problem in office supplies or employee communications can manage to gum up the works of the entire enterprise. Many performance improvement theories suggest breaking down the workplace into categories, such as employees, supply chain, demand chain, and job training, to help isolate performance issues with greater ease.

A continually functioning improvement system can benefit the workplace in a variety of ways. By improving external issues, such as customer satisfaction, financial performance, and business reputation, internal issues such as worker morale can be positively affected. This can create a positive cycle of work and evolution, as motivated and happy employees are more likely to contribute more, work harder, and participate in improvement programs. By creating an improvement program that visibly rewards success and actively encourages the input and help of employees at all levels, a business may be able to create a positive environment in which improvement goals are welcomed and heartily integrated.

Jessica Ellis
Jessica Ellis

With a B.A. in theater from UCLA and a graduate degree in screenwriting from the American Film Institute, Jessica is passionate about drama and film. She has many other interests, and enjoys learning and writing about a wide range of topics in her role as a wiseGEEK writer.

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Discussion Comments


fify-- All aspects of performance reviewed, employee performance and organizational performance go hand in hand.

It's also through the employees that a workplace identifies any problems in the work chain.


@fify-- Businesses review all aspects of production periodically to see if things are running as they should. But the most commonly done review is the employee performance review or evaluation.

This is when an employee's performance is compared to the performance of other employees. The evaluation is usually done in the form of a questionnaire. The business then uses the results to develop a performance improvement plan. This review is also a good way to clarify individual and organizational goals. Unclear goals are a major reason for poor performance in businesses.


Are performance reviews just done for employees or is it done for other aspects of a business as well?

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