Business performance management

"Performance management" redirects here. For performance management of software in real time or forensically, see software performance management.
Organizational performance and its types.[1]
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Business performance management (BPM) (also known as corporate performance management (CPM)[2] enterprise performance management (EPM),[3][4] organizational performance management, or simply performance management) is a management approach that encompasses a set of processes and analysis tools to ensure that an organization's activities and output are aligned with its goals in an effective and efficient manner. BMP goes hand-in-hand with business business process management,[5] a larger framework managing organizational processes.

At its core, performance management aims to measure and optimize the performance of an organization as a whole, specific departments, individual employees, or the processes in place to manage particular tasks.[6] This is accomplished through the establishment of performance standards by senior leadership and by task owners. These standards may include setting clear expectations for job duties, providing timely feedback and coaching, evaluating employees' performance and behaviors against desired outcomes, and implementing reward systems.[7] The technique can involve outlining the role of each individual in the organization in terms of functions and responsibilities.[8]

History

By 2017, Gartner retired the concept of "CPM" and reclassified it as "financial planning and analysis (FP&A)," and "financial close" to reflect two concepts: increased focus on planning and the emergence of a new category of solutions supporting the management of the financial close.[9]

Definition and scope

Innovative technologies provide one approach to collapsing this gap and allowing corporate strategic outcomes to be fully realized and risk management programs to be fully described.[10]

Frameworks

Application

Performance management principles are used most often in the workplace and can be applied wherever people interact with their environments to produce desired effects, such as in health settings.[11]

The way performance management is applied is important in getting the most out of the group. It can have a positive impact on how employees perform on a day-to-day basis. In order to avoid a negative impact, it must be applied in a way that does not encourage internal competition, but rather teamwork, cooperation, and trust.[12]

Managers use performance management to align company goals with the goals of teams and employees in an effort to increase efficiency, productivity, and profitability.[13] Performance management guidelines stipulate clearly the activities and outcomes by which employees and teams are evaluated during performance appraisal.[14] Many types of organization use performance management systems (PMS) to evaluate their business according to their targets, objectives, and goals to achieve the vision of their organization. For example, research institute may use PMS to evaluate their research success in achieving specific development targets in line with the institute vision.[15] Complex multifaceted performance drivers such as societal contribution of research may be evaluated along with many other complex performance drivers like research commercialization, research collaborations, in focus of many development areas such as commercial agriculture sector.[16][17] In such cases research institute may use data-driven real-time PMS to deal with such complex performance management challenges and to be on track of research practices towards development needs of a country in achieving innovations for development of agriculture sector.[18][19]

Werner Erhard, Michael C. Jensen, and their colleagues developed a new approach to improving performance in organizations. Their model is used to stress how the constraints imposed by one's own worldview can impede cognitive abilities that would otherwise be available. Their work delves into the source of performance, which is not accessible by mere linear cause-and-effect analysis. They assert that the level of performance people achieve correlates with how work situations occur to them and that language (including what is said and unsaid in conversations) plays a major role in how situations occur to the performer. They assert that substantial gains in performance are more likely to be achieved by management understanding how employees perceive the world and then encouraging and implementing changes that make sense to employees' worldview.[20]

Benefits of performance management

In the public sector, the effects of performance management systems have differed from positive to negative, suggesting that differences in the characteristics of performance management systems and the contexts into which they are implemented play an important role to the success or failure of performance management.[21][22]

How performance management can fail

Managers who are not clear in their expectations may end up with employees who believe that have been doing a great job, when they have been doing something other than what has been asked of them.

Employees who question how fair the performance management system is will discredit its effectiveness. An example of this would be a high level of internal competition within the performance management system. This will cause those who do not get rewarded to be disgruntled with the process. Additionally, without proper implementation in the planning of the performance management system, employees may view the process as something they must have compliance with. This will result in a less proactive and more inaccurate representation of the performance of an employee.[23]

Organizational development

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.[24]

Other organizational development definitions are slightly different. The U.S. Office of Personnel Management (OPM) 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.[25]

Design and implementation

An organization-wide 360-degree feedback process integrated into its culture can be a powerful tool for communicating and instituting change, rapidly touching all members of the organization when new markets, strategies, values and structures are introduced into the system.[26]

Each year companies spend millions on their performance management systems. In order for performance management to be successful, businesses must continue to adapt their system to correct their current deficiencies. Some aspects may resonate more with employees compared to others (e.g., goal setting or performance bonuses).[27]

Selection of goals

According to Richard et al. (2009), organizational performance metrics encompass three specific areas of firm outcomes:[28]

The term "organizational effectiveness"[29] is broader.

Information monitoring

Managerial adjustments

Considerations of implementation

Metrics and key performance indicators

Technology

Because of business performance management, activities in large organizations often involve collecting and reporting large volumes of data. Many software vendors, particularly those offering business intelligence tools, will market products intended to assist in this process. As a result of this marketing effort, business performance management is often incorrectly understood as an activity that relies on software systems to work, and many definitions of business performance management explicitly suggest software as being a definitive component of the approach.[30]

This interest in business performance management from the software community is interpreted by some to be sales-driven.[31]

Application software types

See also

Researchers

References

  1. ^ Mahmoudi, Amin; Javed, Saad Ahmed (2022). "Performance Evaluation of Construction Sub‐contractors using Ordinal Priority Approach". Evaluation and Program Planning. 91: 102022. doi:10.1016/j.evalprogplan.2021.102022. ISSN 0149-7189. PMID 34736766. S2CID 239609916.
  2. ^ "Introducing the CPM Suites Magic Quadrant", Lee Geishecker and Frank Buytendijk, 2 October 2002, www.gartner.com, M-17-4718
  3. ^ Frolick, Mark N.; Ariyachandra, Thilini R. (Winter 2006). "Business performance management: one truth" (PDF). Information Systems Management. www.ism-journal.com. 23: 41–48. doi:10.1201/1078.10580530/45769.23.1.20061201/91771.5. S2CID 11317244. Archived from the original (PDF) on 2011-07-19. Retrieved 2010-02-21. Business Performance Management (BPM) [...] is also known and identified by other names, such as corporate performance management and enterprise performance management.
  4. ^ Mojdeh, Sana (2005-12-20). Technology-enabled Business Performance Management: Concept, Framework, and Technology (PDF). 3rd International Management Conference. pp. 1–9. Archived from the original (PDF) on 2011-07-22. Retrieved 2010-02-21. Confusion also arises because industry experts can not agree what to call BPM, let alone how to define it, META Group and IDC use the term 'Business Performance Management', Gartner Group prefers 'Corporate Performance Management', and others favor 'Enterprise Performance Management'.
  5. ^ vom Brocke, J. & Rosemann, M. (2010), Handbook on Business Process Management: Strategic Alignment, Governance, People, and Culture (International Handbooks on Information Systems). Berlin: Springer
  6. ^ Harris, Hilary; Brewster, Chris; Sparrow, Paul (2003). International Human Resource Management. CIPD Publishing. ISBN 9780852929834.
  7. ^ "Performance Management". U.S. Office of Personnel Management. Retrieved 2019-02-28.
  8. ^ Hameed, Waseem (2020-11-12). "Performance Management".
  9. ^ Van Decker, John E.; Rayner, Nigel; Iervolino, Christopher (October 31, 2017). "Back to Basics: The Refocusing of Corporate Performance Management". www.gartner.com. Gartner. G00341616. Retrieved 2019-04-16.
  10. ^ Achterbergh, Jan; Vriens, Dirk (2010). "Organizational Structures Supporting Rich Survival". Organizations. Springer. pp. 351–378. doi:10.1007/978-3-642-14316-8_11. ISBN 978-3-642-14315-1. Retrieved 17 March 2023.
  11. ^ Mettler T, Rohner P (2009). Performance management in health care: The past, the present, and the future (PDF). International Conference Business Informatics. Vienna. pp. 699–708. Archived (PDF) from the original on 2022-10-09.
  12. ^ Smith, Marisa; Bititci, Umit Sezer (2017-09-04). "Interplay between performance measurement and management, employee engagement and performance". International Journal of Operations & Production Management. 37 (9): 1207–1228. doi:10.1108/ijopm-06-2015-0313. ISSN 0144-3577.
  13. ^ Zaffron, Logan, Steve, David (Feb 2009). Performance Management: The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life (1st ed.).{cite book}: CS1 maint: multiple names: authors list (link)
  14. ^ "Performance". U.S. Office of Personnel Management. Retrieved 2019-02-28.
  15. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2021-06-01). "Role of Peripheral Analysis Methods in Adoption of Successful KPIs for a Research Institute Working Towards Commercial Agriculture". International Journal of Global Business and Competitiveness. 16 (1): 61–71. doi:10.1007/s42943-021-00021-z. ISSN 0976-1888. PMC 8039501.
  16. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Seneviratne, Gamini (2022-12-31). "Probing into the concept of 'research for society' to utilize as a strategy to synergize flexibility of a research institute working on eco-friendly commercial agriculture". All Life. 15 (1): 220–233. doi:10.1080/26895293.2022.2038280. ISSN 2689-5293. S2CID 246761304.
  17. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith Krishantha (2021-01-01). "Role of key performance indicators on agile transformation of performance management in research institutes towards innovative commercial agriculture". Journal of Science and Technology Policy Management. 13 (2): 213–243. doi:10.1108/JSTPM-10-2020-0151. ISSN 2053-4620. S2CID 237685948.
  18. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R. (2022-05-23). ""Connected researches" in "smart lab bubble": A lifeline of techno-society space for commercial agriculture development in "new normal"". New Techno Humanities. 2: 79–91. doi:10.1016/j.techum.2022.05.001. ISSN 2664-3294. S2CID 249035865.
  19. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R.; Madhushani, K. B. (2022-08-22). "Intelligently driven performance management: an enabler of real-time research forecasting for innovative commercial agriculture". SN Social Sciences. 2 (9): 168. doi:10.1007/s43545-022-00484-8. ISSN 2662-9283. PMC 9395937. PMID 36033638.
  20. ^ Madden, Bartley J. (September 2014). Reconstructing Your Worldview. Learning What Works Inc. p. 99. ISBN 978-0988596931.
  21. ^ Nielsen, Poul A. 2014. "Performance Management, Managerial Authority, and Public Service Performance." Journal of Public Administration Research and Theory. 24(2):431–458.
  22. ^ Gerrish, Ed. 2015. "The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis." Public Administration Review 76(1):48–66.
  23. ^ Peacock, M., Stewart, E. B., & Belcourt, M. (2020). Managing Employee Performance. In Understanding human resources management: A Canadian perspective (pp. 211-239). Toronto: Nelson Education.
  24. ^ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2022-08-10). "Single window performance management: a strategy for evaluation integrated research culture in the commercial agriculture sector". SN Business & Economics. 2 (9): 128. doi:10.1007/s43546-022-00297-0. ISSN 2662-9399. S2CID 251504791.
  25. ^ US Office of Personnel Management, A Handbook for Measuring Employee Performance, published March 2018, accessed 26 October 2022
  26. ^ Bracken, D., & Rose, D., "When does 360-degree feedback create behavior change? And how would we know it when it does?", Journal of Business and Psychology, 26(2), 183-192
  27. ^ Kakkar, Shiva; Dash, Sanket; Vohra, Neharika; Saha, Surajit (2020-04-23). "Engaging employees through effective performance management: an empirical examination". Benchmarking. 27 (5): 1843–1860. doi:10.1108/bij-10-2019-0440. ISSN 1463-5771. S2CID 219006172.
  28. ^ Richard, Pierre J.; Devinney, Timothy M.; Yip, George S.; Johnson, Gerry (2009-02-06). "Measuring Organizational Performance: Towards Methodological Best Practice". Journal of Management. SAGE Publications. 35 (3): 718–804. doi:10.1177/0149206308330560. ISSN 0149-2063. S2CID 143585204.
  29. ^ Upadhaya, Bedanand; Munir, Rahat; Blount, Yvette (2014). "Association between performance measurement systems and organisational effectiveness". International Journal of Operations & Production Management. Emerald. 34 (7): 853–875. doi:10.1108/ijopm-02-2013-0091. ISSN 0144-3577.
  30. ^ BPM Mag, What is BPM? Archived December 12, 2006, at the Wayback Machine
  31. ^ The Next Generation of Business Intelligence: Operational BI Archived 2009-08-02 at the Wayback Machine White, Colin (May 2005). "The Next Generation of Business Intelligence: Operational BI". Information Management Magazine. Archived from the original on 2011-07-22. Retrieved 2010-02-21. The biggest growth area in operational BI analysis is in the area of business performance management (BPM).

Further reading

  • Business Intelligence and Performance Management: Theory, Systems, and Industrial Applications, P. Rausch, A. Sheta, A. Ayesh (Eds.), Springer Verlag U.K., 2013, ISBN 978-1-4471-4865-4.
  • Performance Management - Integrating Strategy Execution, Methodologies, Risk, and Analytics. Gary Cokins, John Wiley & Sons, Inc. 2009. ISBN 978-0-470-44998-1
  • 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.
  • 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.
  • Managing for Performance, Alasdair A. K. White. Piatkus Books, 1995

External links