What is Performance Management?

What is Key Performance Management?

Performance Management is what organisations do to become more successful and stay ahead of their competitors. In fact, managing performance is THE most critical task of any manager or executive. 

If organisations get it right, their performance management processes help them to better execute their strategy by measuring, reporting and managing progress. The aim of performance management is improve the performance of organisations and individuals. 

We tend to split performance management into corporate and people performance management. 

Corporate Performance Management

Corporate Performance Management (CPM) focuses on the performance of the entire organization and is also referred to as Enterprise Performance Management (EPM) or Strategic Performance Management (SPM).

CPM can basically be defined as a set of management processes that help organisations define and execute their strategy, and to measure and monitor performance in order to inform strategic decision making and learning. 

CPM is therefore an umbrella term that encompasses processes for defining strategic objectives, measuring performance, analysing performance, reporting and reviewing performance as well as aligning people and culture. All of these are focused on strategic performance improvement, which is the central premise of CPM. 

Tools used for CPM include management dashboards, Balanced Scorecards, key performance indicators, analytics, planning, budgeting and forecasting, benchmarking, business excellence models, six sigma, enterprise risk management, project or programme management, and performance reporting. 

People Performance Management

People Performance Management focuses on the management of the people in an organisation to ensure that their performance contributes to the strategic goals of the organisation. It is about aligning the performance of employees with the improvement of corporate performance. 

People Performance Management is an umbrella term that encompasses processes for communicating corporate goals and priorities, aligning individual goals with corporate goals, agreeing performance measures and targets, helping individuals understand how well they are performing as well as developing the skills and competencies required to improve results. 

Tools often used to manage people performance include appraisals, reward and recognition systems, personal development plans, performance targets, and performance review meetings. 

Performance Management Systems

Both corporate and people performance management processes are often supported by information technology. Performance Management Software Applications help organisations manage and automate the various processes. 

The right performance management processes are often the key differentiators between top performing organisations and those that would like to become one. 

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