Performance Management

Performance management is a  business management approach which looks at the business as a whole instead of on a division level. Business performance management entails reviewing the overall business performance and determining how the business can better reach its goals.

In management, performance is the act of setting corporate goals, monitoring the methods used to achieve those goals, and then creating ways for managers to more effectively achieve those goals. By collecting and analysing data, a company can determine what effects managerial changes had on performance and then alter those changes to help create a more effective process. The idea of business performance management is a broad concept, but it is best used to analyse specific goals and help a company to save on operating costs, while generating more revenue at the same time.

The important thing to remember about business performance management is that it is used to improve the performance of personnel and management. The use of metrics is just a means to an end, with that end being higher profitability.

Effective performance management is essential to businesses. Through both formal and informal processes, it helps them align their employees, resources, and systems to meet their strategic objectives. It works as a dashboard too, providing an early warning of potential problems and allowing managers to know when they must make adjustments to keep a business on track.

Strong performance management rests on the simple principle that “what gets measured gets done.” In an ideal system, a business creates a cascade of metrics and targets, from its top-level strategic objectives down to the daily activities of its front line employees. Managers continually monitor those metrics and regularly engage with their teams to discuss progress in meeting the targets. Good performance is rewarded; under-performance triggers action to address the problem.

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