Prior digging into details and demonstrate ways and techniques of how to improve a firm’s performance management, it might be smart to form a common platform of understanding first, about what performance management in fact is.
The famous managerial rules claim that one can only manage what one can measure. Thus, performance management can happen only if managers can measure each and every process of operation. In the business jargon we speak of KPIs, or Key Performance Indicators. These are simply, according to the business dictionary, identified elements or variables, such as number of new orders, ROI, turnover rate per department and so forth, to monitor the activities, and the progress or the lack of it towards realizing the firm’s objectives or strategic plans.
Performance can be measured on different scales, i.e. organizational level, team level, individual level and across the organization. Once the desired KPIs are set and the performance is measured, the management process can take place. Simply, performance results can be tracked and adjusted in case of deviation, or restructured to increase efficiency, effectiveness and to match state-of-the-art operations.
According to practitioners and experts there are some tips and tricks a firm can acquire to improve its performance management process. One of these of course is to acquire a strong strategic performance management tool that facilitates performance tracking, management and adjustment. A great example is ON-Track. Another practical trick is to fully understand the performance management process, which includes strategy formulation and communication, performance measurement, performance analysis, performance report creation and finally people and culture alignment. For each element there are different parameters to take into consideration. These are: 1) financial planning, consolidation, budgeting, 2) project and program management, 3) people’s performance, reward and recognition, 4) performance reporting, dashboards and scorecards, 5) risk management, and finally 6) business intelligence and analytics.
To leverage and improve performance, practitioners divided it into the three aforementioned levels, i.e. organizational, team, individual. Generally, and for the sake of this blog, we summed up some of the most critical aspects. One shall commence by defining goals, communicating expectations clearly, maintaining a high performance culture, and always communicating organization’s mission, vision, and core values. It is of crucial importance to identify critical success factors, key performance indicators, balance scorecard and reports. Seems at first sight a hassle of paperwork and disorganization; but the good news is that with strategic performance management tools, like ON-Track all this planning will be extremely easy, effective and efficient, and the performance results awesome!