Framework library · Leadership, teams and culture
Performance management cycle
The performance management cycle links what someone is asked to achieve, how progress is checked during the period, and how the result is judged and acted on. It works when objectives are few and measurable, evidence is collected as the period runs rather than recalled at the end, and the review produces a development action as well as a rating.
Use it when
- You are setting objectives for a person or a team at the start of a year or a project.
- A mid-year check is due and you want it to rest on evidence rather than impressions.
- An end-of-period review is coming and the rating has to be explained and defended.
- Company goals have changed and individual objectives need re-cutting to match.
Avoid it when
- The result cannot be traced to one person, such as a tightly coupled team output. Set team objectives, and use the individual review for contribution and development.
- The organisation's own goals are not set. Agree those first, with OKRs or a balanced scorecard, then cascade them.
- Performance has fallen sharply and needs a formal improvement plan. Follow the organisation's capability procedure, with HR.
How to run it
Agree three to six objectives
Each one an outcome with a measure and a target: "raise power availability to 99.95% across the region by June", not "improve availability". Link each to a team or company goal.
Weight the objectives
Weights add to 100 and say what matters most. If everything is weighted equally, nothing has been prioritised.
Collect evidence as the period runs
Record figures and examples as they happen. A review built from memory favours the last two months.
Hold a mid-point review
Mark each objective on track, at risk or off track, agree what changes, and rewrite any objective the business has overtaken.
Rate each objective against its target
Use the evidence, not the effort. The overall rating is the weighted average of the objective ratings, from 1 (not met) to 4 (exceeded).
Agree development actions
For each objective where it helps, what the person will learn or practise next period. The development action is often worth more than the rating.
Work through it
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Mistakes to avoid
- Writing activities as objectives ("run monthly safety audits"). Activities can be completed while the outcome is missed.
- Changing nothing at the mid-point. Objectives the business has overtaken should be rewritten then, not scored as missed at the end.
- Letting the rating dominate the conversation. Agree the evidence first, then the rating, then spend most of the time on development.
- Setting more than six objectives. The weights become too small to matter and the person cannot keep them all in view.
Where it comes from
No single originator. Setting objectives with each manager goes back to management by objectives in Peter F. Drucker, The Practice of Management (1954). The cycle of agreeing objectives, reviewing progress during the period and holding a formal review with development actions is described in the CIPD factsheet "Performance management: an introduction" (2026). Source.
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