Performance Planning - Meaning, Importance & Example

Published in Human Resources Terms by MBA Skool Team, Last Updated: July 14, 2022

What is Performance Planning?

Performance planning is a formal process in organizations for discussing, identifying and planning the individual or team goals which employees can or would achieve in the coming performance cycle. The performance planning is done by both the employer as well as employee and go through a proper agreed plan.

Performance plans are decided between the supervisor and employee working together. They together determine the performance expectations and development objectives to be accomplished during the review period. They discuss goals, objectives and expectations for the review period.

The process helps to improve the communication and discuss the career development plan of the employee.

Importance of Performance Planning

Performance planning is mostly the first step in the overall performance evaluation process. To evaluate performance of an individual in an organization there should be fair and global parameters against which a performance can be evaluated. For an athlete for example, it can be time taken to finish a race. For an employee it can be ability to complete the assigned tasks or bring more business to the company or complete trainings. Before the evaluation starts, the goals should be pre-defined and planned. This is where the performance planning comes into picture.

The overall process of performance planning is very important It is where an employee or a supervisor would agree on certain goals or parameters against which the employee would be evaluated. Not only for an individual but also for all the employees at the same level should have comparable goals so that the comparative analysis and ratings can be done for individual employees. 

Objective of Performance Planning

The objective and need for performance planning is required:

1. To come to agreement on the individual’s job responsibilities

2. To remove any ambiguity of the goals and objectives that needs to be achieved

3. To identify the competencies required for doing the job

4. To create an appropriate performance and career development plan for the individual

Example of Performance Planning

Let us assume there is a department of sales in an organization. There are various roles like Sales Manager, sales representative, sales president, salesperson in that department. Now there has to be a proper performance planning to evaluate the employees. Sales targets and activities would be part of the goals. let us take sales representatives. They would have goals like targets achieved in an year, the size of the deals closed, time taken to close the deals etc. The same goals would be discussed and agreed with all the employees who are sales representatives during planning and specific targets would be set.

Hence, this concludes the definition of Performance Planning along with its overview.

This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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