Performance management (PM) includes activities that ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product or service, as well as many other areas.

Performance management as referenced on this page is a broad term coined by Dr. Aubrey Daniels

Aubrey Daniels

Aubrey C. Daniels, Ph.D. is a clinical psychologist by training, but is frequently referred to as “the father of performance management”, as he was one of the first to make extensive use of the science of behavior analysis in business. His rich history is proof of his dedication and devotion to...

 in the late 1970s to describe a technology (i.e. science imbedded in applications methods) for managing both behavior and results, two critical elements of what is known as performance.

Application

This is used most often in the workplace, can apply wherever people interact — schools, churches, community meetings, sports teams, health setting, governmental agencies, and even political settings - anywhere in the world people interact with their environments to produce desired effects. Armstrong and Baron (1998) defined it as a “strategic and integrated approach to increasing the effectiveness of companies by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors.”

It may be possible to get all employees to reconcile personal goals with organizational goals and increase productivity and profitability of an organization using this process. It can be applied by organisations or a single department or section inside an organisation, as well as an individual person. The performance process is appropriately named the self-propelled performance process (SPPP).

First, a commitment analysis must be done where a job mission statement

Mission statement

A mission statement is a statement of the purpose of a company or organization. The mission statement should guide the actions of the organization, spell out its overall goal, provide a path, and guide decision-making...

 is drawn up for each job. The job mission statement is a job definition in terms of purpose, customers, product and scope. The aim with this analysis is to determine the continuous key objectives and performance standards for each job position.

Following the commitment analysis is the work analysis of a particular job in terms of the reporting structure and job description. If a job description is not available, then a systems analysis can be done to draw up a job description. The aim with this analysis is to determine the continuous critical objectives and performance standards for each job.

Benefits

Managing employee or system performance facilitates the effective delivery of strategic and operational goals. There is a clear and immediate correlation between using performance management programs or software and improved business and organizational results.

For employee performance management, using integrated software, rather than a spreadsheet based recording system, may deliver a significant return on investment through a range of direct and indirect sales benefits, operational efficiency benefits and by unlocking the latent potential in every employees work day (i.e. the time they spend not actually doing their job). Benefits may include:

Direct financial gain

• Grow sales
• Reduce costs in the organization
• Stop project overruns
• Aligns the organization directly behind the CEO's goals
• Decreases the time it takes to create strategic or operational changes by communicating the changes through a new set of goals

Motivated workforce

• Optimizes incentive plans to specific goals for over achievement, not just business as usual
• Improves employee engagement because everyone understands how they are directly contributing to the organisations high level goals
• Create transparency in achievement of goals
• High confidence in bonus payment process
• Professional development programs are better aligned directly to achieving business level goals

Improved management control

• Flexible, responsive to management needs
• Displays data relationships
• Helps audit / comply with legislative
  Legislation
  Legislation is law which has been promulgated by a legislature or other governing body, or the process of making it...
  
   requirements
• Simplifies communication of strategic goals scenario planning
  Scenario planning
  Scenario planning, also called scenario thinking or scenario analysis, is a strategic planning method that some organizations use to make flexible long-term plans. It is in large part an adaptation and generalization of classic methods used by military intelligence.The original method was that a...
  
  
• Provides well documented and communicated process documentation
  Documentation
  Documentation is a term used in several different ways. Generally, documentation refers to the process of providing evidence.Modules of Documentation are Helpful...
  
  

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
   Performance appraisal
   A performance appraisal, employee appraisal, performance review, or development discussion is a method by which the job performance of an employee is evaluated typically by the corresponding manager or supervisor. A performance appraisal is a part of guiding and managing career development...
   
   where individual performance is formally documented and feedback delivered

A performance problem is any gap between Desired Results and Actual Results. Performance improvement

Performance improvement

Performance improvement is the concept of measuring the output of a particular process or procedure, then modifying the process or procedure to increase the output, increase efficiency, or increase the effectiveness of the process or procedure...

 is any effort targeted at closing the gap between Actual Results and Desired Results.

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

See also

• Aubrey Daniels
  Aubrey Daniels
  Aubrey C. Daniels, Ph.D. is a clinical psychologist by training, but is frequently referred to as “the father of performance management”, as he was one of the first to make extensive use of the science of behavior analysis in business. His rich history is proof of his dedication and devotion to...
  
  
• PDCA
  PDCA
  PDCA is an iterative four-step management method used in business for the control and continuous improvement of processes and products...
  
  
• Performance measurement
  Performance Measurement
  Performance measurement with a process is the complement to process execution. Based on measured performance, the feedback control loop may be closed. The metrics to assess performance is set according to a determined econometric model...
  
  
• Organizational behavior management
  Organizational Behavior Management
  Organizational behavior management is an important aspect of management studies the subject which is studied in first year of management studies is known as organizational behaviour . OBM is the result of applying the psychological principles of applied behavior analysis and the experimental...
  
  
• Behavioral systems analysis
  Behavioral systems analysis
  Behavioral systems analysis, BSA, or Performance Systems Analysis applies behavior analysis and systems analysis to human performance in organizations. BSA is directly related to Performance Management and Organizational Behavior Management.-What is BSA?:...
  
  

Further reading

• Organizational Behavior Management Network, Dr. John Austin, Dr. Dale Brethower, Dr. Alyce Dickinson. www.obmnetwork.com. 2009.
• Performance Management: Changing Behavior That Drives Organizational Effectiveness, 4th ed., Dr. Aubrey C. Daniels. Performance Management Publications, 1981, 1984, 1989, 2006. ISBN 0-937100-08-0
• 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.
• Bringing out the Best in People, Aubrey C. Daniels. McGraw-Hill; 2nd edition. 1999.
• 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