Performance management

For a description of Performance Management in the context of Information Technology, please see IT Performance Management Simply put, performance management includes activities to ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on performance of the organization, a department, processes to build a product or service, employees, etc. Information in this topic will give you some sense of the overall activities involved in performance management. Then you might enhance your understanding by reviewing closely related library topics referenced from the sidebar.

Where PM is applied

This PM approach is used most often in the workplace but applies wherever people interact—schools, churches, community meetings, sports teams, health setting, governmental agencies, and even political settings. PM principles are needed wherever in the world people interact with their environments to produce desired effects. Cultures are different but the laws of behavior are the same world-wide.

It is possible to get all employees to reconcile personal goals with organisation goals. One can turn around any marginal business and increase productivity and profitability for any organisation, with the transparent and hidden forces embedded in this process. It can be applied by organisations or a single department or section inside an organisation; as well as an individual person.

This process is a natural, self-inspired performance process and are appropriately named the self-propelled performance process (SPPP).

The self-propelled performance management system is: 1. the fastest known method for career promotion; 2. the quickest way for career advancement; 3. the surest way for career progress; 4. the best ingredient in career path planning; 5. the only true and lasting virtue for career success; 6. the most neglected part in teachings about management and leadership principles; 7. the most complete and sophisticated application of performance management; 8. the best integration of human behaviour research findings, with the latest management, leadership and organisational development principles; 9. the best automated method for organisational change, development, growth, performance and profit; 10. the quickest way for career building, career development and moving up on the stepping stones of the corporate career ladder; 11. the surest and fastest way for increased motivation, productivity, growth, performance and profitability for both the individual and the organisation; 12. the best career builder and career booster for any career; and 13. inspirational, as it gets people moving, makes them self-starters in utilising own talents and initiative, automatically like magic.

First of all, deriving from the strategic plan, a commitment analysis must be done, where a job mission statement is drawn up for each job. The job mission statement is a job definition in terms of purpose, customers, product and scope. The aim with this analysis is to determine the continuous key objectives and performance standards for each job position.

Following the commitment analysis, is the work analysis of a particular job in terms of the reporting structure and job description. If a job description is not available, then a systems analysis can be done to draw up a job description. The aim with this analysis is to determine the continuous critical objectives and performance standards for each job.

Benefits

Managing employee or system performance facilitates the effective delivery of strategic and operational goals. There is a clear and immediate correlation between using performance management programs or software and improved business and organizational results.

For employee performance management, using integrated software, rather than a spreadsheet based recording system, may deliver a significant return on investment through a range of direct and indirect sales benefits, operational efficiency benefits and by unlocking the latent potential in every employees work day i.e. the time they spend not actually doing their job. Benefits may include :

Direct financial gains

• Grow sales
• Reduce costs
• Stop project overruns
• Aligns the organization directly behind the CEO's goals
• Decreases the time it takes to create strategic or operational changes by communicating the changes through a new set of goals

Motivated workforce

• Optimizes incentive plans to specific goals for over achievement, not just business as usual
• Improves employee engagement because everyone understands how they are directly contributing to the organisations high level goals
• Create transparency in achievement of goals
• High confidence in bonus payment process
• Professional development programs are better aligned directly to achieving business leval goals

Improved management control

• Flexible, responsive to management needs
• Displays data relationships
• Helps audit / comply with legislative requirements
• Simplifies communication of strategic goals scenario planning
• Provides well documented and communicated process documentation

Different Branches of PM

• Employee Performance Management (EPM) refers to a forward looking system of strategic alignment and employee objective setting with regular reviews and reporting and is distinguished from employee appraisal insofar as the latter does not include a goal setting process and is an open-ended management process with no feedback against clearly defined strategic goals
• Business performance management (BPM) is a set of processes that help businesses discover efficient use of their business units, financial, human and material resources.
• Operational performance management (OPM) focus is on creating methodical and predictable ways to improve business results, or performance, across organizations.
• Integrated business planning (IBP) refers to the technologies, applications and processes of connecting the planning function across the enterprise to improve organizational alignment and financial performance.
• Project Performance Management is a sub-discipline of Project Management that seeks to establish measurements of project performance, such as performance of project scope, performance according to a time schedule and/or performance according to a project budget. It seeks to use such measurements to inform project stakeholders, lead the project team and improve project performance. Earned Value Management is notable method of Project Performance Management.
• Customer Performance Management (CPM) refers to the practice of managing the effectiveness of all the business activities and processes related to handling customer relationships, to a common set of financial and customer focused goals and objectives. This includes all aspects of creating and maintaining a master source of customer related data.

Organizational Development Definitions

• In organizational development (OD), performance can be thought of as Actual Results vs Desired Results. Any discrepancy, where Actual is less than Desired, could constitute the performance improvement zone. Performance management and improvement can be thought of as a cycle:

1. Performance planning where goals and objectives are established
2. Performance coaching where a manager intervenes to give feedback and adjust performance
3. Performance appraisal where individual performance is formally documented and feedback delivered

A performance problem is any gap between Desired Results and Actual Results. Performance improvement is any effort targeted at closing the gap between Actual Results and Desired Results.

Other organizational development definitions are slightly different. The US Government's Office of Personnel Management indicates that Performance Management consists of a system or process whereby:

1. Work is planned and expectations are set
2. Performance of work is monitored
3. Staff ability to perform is developed and enhanced
4. Performance is rated or measured and the ratings summarized
5. Top performance is rewarded^[1]

References

Organizational Behavior Management Network, Dr. John Austin, Dr. Dale Brethower, Dr. Alyce Dickinson. www.obmnetwork.com. 2009.

Journal of Organizational Behavior Management, Routledge Taylor & Francis Group. Published quarterly. 2009.

Handbook of Organizational Performance, Thomas C. Mawhinney, William K. Redmon & Carl Merle Johnson. Routledge. 2001.

Bringing out the Best in People, Aubrey C. Daniels. McGraw-Hill; 2nd edition. 1999.

Improving Performance: How to Manage the White Space in the Organization Chart, Geary A. Rummler & Alan P. Brache. Jossey-Bass; 2nd edition. 1995.

Human Competence: Engineering Worthy Performance, Thomas F. Gilbert. Pfeiffer. 1996.

The Values-Based Safety Process: Improving Your Safety Culture with Behavior-Based Safety, Terry E. McSween. John Wiley & Sons. 1995.

Performance-based Instruction: Linking Training to Business Results, Dale Brethower & Karolyn Smalley. Pfeiffer; Har/Dis edition. 1998.

Handbook of Applied Behavior Analysis, John Austin & James E. Carr. Context Press. 2000.

See also

• PDCA
• Performance measurement
• PICNIC Analysis
• Organizational behavior management
• Behavioral systems analysis

External links

• Performance Management (at the US Office of Personnel Management)
• A Handbook for Measuring Employee Performance (at the US Office of Personnel Management)
• Performance Management Institute of Australia Research