Performance Management Cheat Sheet

The core ideas of Performance Management distilled into a single, scannable reference — perfect for review or quick lookup.

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Quick Reference

Key Performance Indicators (KPIs)

Quantifiable metrics used to evaluate how effectively an individual, team, or organization is achieving key business objectives. KPIs translate strategic goals into measurable targets that can be tracked over time.

OKRs (Objectives and Key Results)

A goal-setting framework popularized by Intel and Google in which ambitious, qualitative objectives are paired with specific, measurable key results that indicate whether the objective has been achieved.

360-Degree Feedback

A multi-rater assessment method that collects performance feedback from an employee's supervisors, peers, direct reports, and sometimes customers or external stakeholders to provide a comprehensive view of strengths and development areas.

Continuous Feedback

An approach to performance management that replaces or supplements annual reviews with ongoing, real-time feedback conversations between managers and employees, enabling timely course corrections and recognition.

SMART Goals

A framework for setting goals that are Specific, Measurable, Achievable, Relevant, and Time-bound. SMART criteria ensure that goals are clear, trackable, and aligned with broader objectives.

Performance Appraisal

A formal, structured evaluation process in which a manager assesses an employee's job performance, typically against pre-established criteria, competencies, or goals, and documents the assessment for organizational records.

Calibration

A process in which managers across an organization meet to review and align their performance ratings, ensuring consistency and fairness by reducing individual bias and applying common standards.

Competency Model

A framework that defines the specific knowledge, skills, abilities, and behaviors required for successful performance in a given role or organization. Competency models provide a shared language for evaluating and developing talent.

Balanced Scorecard

A strategic performance management tool developed by Kaplan and Norton that measures organizational performance across four perspectives: financial, customer, internal processes, and learning and growth, ensuring a holistic view beyond purely financial metrics.

Performance Improvement Plan (PIP)

A formal, documented process used when an employee's performance falls below expectations, outlining specific deficiencies, measurable improvement targets, support resources, a timeline for improvement, and consequences if standards are not met.

Key Terms at a Glance

Performance Management:A continuous process of setting expectations, monitoring progress, providing feedback, and developing employee capabilities to achieve organizational goals.

Key Performance Indicator (KPI):A quantifiable measure used to evaluate the success of an individual, team, or organization in meeting objectives.

OKR (Objectives and Key Results):A goal-setting methodology that pairs qualitative objectives with quantitative key results to drive alignment and accountability.

SMART Goals:Goals that are Specific, Measurable, Achievable, Relevant, and Time-bound.

360-Degree Feedback:A multi-rater evaluation method gathering input from supervisors, peers, direct reports, and other stakeholders.

Balanced Scorecard:A strategic management tool measuring performance across financial, customer, internal process, and learning and growth perspectives.

Management by Objectives (MBO):A participative goal-setting process developed by Peter Drucker where managers and employees jointly define and track measurable objectives.

Performance Appraisal:A formal, periodic evaluation of an employee's job performance, typically documented and used for administrative and developmental decisions.

Calibration:A process where managers collectively review performance ratings to ensure consistency, fairness, and the application of common standards.

Competency Model:A framework defining the specific knowledge, skills, abilities, and behaviors required for effective performance in a role.

Performance Improvement Plan (PIP):A formal, documented plan for an underperforming employee that specifies improvement areas, targets, timelines, and support.

Forced Ranking:A performance rating system requiring managers to distribute employees into predetermined categories, such as top, middle, and bottom performers.

Halo Effect:A cognitive bias in which an overall positive or negative impression of a person influences evaluation of their specific traits or performance dimensions.

Recency Bias:The tendency to overweight recent events when evaluating performance, rather than considering the full review period.

Central Tendency Bias:The inclination to rate most employees near the midpoint of a scale, avoiding extreme ratings.

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