An effective performance management system should: 1. Align with the organization's strategic direction and culture. 2. Be practical, easy to understand, and use. It should monitor and measure results and behaviors. 3. Establish clear communication between managers and employees about expectations and goals. The performance management cycle includes planning goals and expectations, monitoring progress, and reviewing and evaluating performance annually with a new cycle beginning. The process involves setting standards, goals, data collection, interviews, future planning, and rewarding performance. Goals should be measurable, realistic, specific, achievable and time-based. Feedback should be constructive and continuous.