What is the Performance Management Process?

The performance management process is a method of management design to ensure the organization and all of its components are working together to optimize the organizations goals. Organization components include departments, employees, processes, teams, and other aspects of an organization. To achieve this design, performance management process must address the overall organization performance in conjunction with the components.

This process requires several ongoing activities. This include identifying and prioritizing goals, defining what constitutes progress towards goals, setting standards for measuring results, and tracking progress toward goals. Other activities include exchanging feedback among organizational components, regularly reviewing progress, reinforcing effective goal-oriented activities, and intervening to create improvements when needed. Business 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 place d on measuring results, maintaining ongoing feedback about 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 certain core activities working from the highest level of the organization down to the smaller components. The first step is to review the overall organizational goals and prioritize by quantity, quality, cost or timeliness.

The next step is to specify which goals apply to which parts of the organization's components. Once the goals are identified by component, the goals must be evaluated to ensure they contribute to the success of the entire organization. Managers must then prioritize the goals of the organization's components.

Once goals of the whole organization and goals of its components are identified and priorities, managers will identify measures to be taken towards the desired goals. They will then set standards to identify the quality of the activities’ results. Managers must determine if goal-oriented activities are below expectations, meet expectations or exceed expectations. Once the goals are understood and the measures toward progress are identified, managers will create and document a performance plan. This plan will outline the goals, measures and the standards by which success will be evaluated.

With a complete plan in place, managers will conduct ongoing observation, measure performance and track the results. The information will be exchanges with organizational components to secure ongoing feedback about performance. A performance appraisal or performance review will be conducted to identify and document the quality of results. Finally, managers will reward performance that meets or exceed expectations or intervene and alter measures that have not produced the expected results. The process of evaluating the plan, altering measures and rewarding success will continue until all objectives in the plan have been met.