Performance management is a process that ensures all components of an organization work together to achieve goals. It involves ongoing activities such as setting goals, measuring progress, exchanging feedback, and intervening to improve results. The process varies but includes identifying goals, prioritizing them, evaluating objectives, establishing measures, creating a plan, observing performance, conducting evaluations, and rewarding success. Enterprise performance management software is often used to organize the process.
The performance management process is a method of designing management to ensure that the organization and all of its components work together to optimize the organization’s goals. Organization components include departments, employees, processes, teams, and other aspects of an organization. To accomplish this blueprint, the performance management process must address the overall performance of the organization along with the components.
This process requires several ongoing activities. This includes identifying and prioritizing goals, defining what constitutes progress toward goals, setting standards for measuring results, and monitoring progress toward goals. Other activities include exchanging feedback between organizational components, periodically reviewing progress, reinforcing effective goal-oriented activities, and intervening to create improvements when needed. Enterprise performance management software is a performance management tool that is often used to organize performance management processes.
While the activities in the performance management process are similar to other management methods such as strategic planning and management by objectives, it focuses on overall results. Great importance is placed on measuring results, maintaining continuous feedback on results and developing plans to improve results. While other management processes often focus on the results themselves, this process places greater importance on the methods used to achieve results.
The steps in the performance management process can vary from one organization to another. Most programs include a few core activities ranging from the highest level of the organization down to the smallest components. The first step is to review the overall organizational goals and prioritize them based on quantity, quality, cost, or timeliness.
The next step is to specify which objectives apply to which parts of the organization’s components. Once the goals per component have been identified, the goals need to be evaluated to ensure they contribute to the success of the entire organization. Managers must therefore prioritize the goals of organizational components.
Once the goals of the entire organization and the objectives of its components and priorities have been identified, managers will identify the measures to be taken to achieve the desired objectives. They will then establish standards to identify the quality of the results of the activities. Managers must determine whether goal-oriented activities fall short of expectations, meet expectations, or exceed expectations. Once goals are understood and measures for progress are identified, managers will create and document a performance plan. This plan will outline the goals, measures, and standards by which success will be measured.
With a comprehensive plan in place, managers will conduct ongoing observation, measure performance and follow up on results. Information will be exchanged with organizational components to ensure ongoing performance feedback. A performance evaluation or performance review will be conducted to identify and document the quality of the results. Finally, managers will reward performance that meets or exceeds expectations or intervenes and changes measures that have not produced the expected results. The process of evaluating the plan, changing measures, and rewarding success will continue until all plan objectives have been achieved.
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