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Understanding the Performance Management System

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Performance Management System

Performance management systems are often associated with the urge to control and penalize underperformance. Despite the general employee perception regarding this matter, the main roles of performance management systems are totally different:

  • Facilitating strategy implementation;
  • Ensuring alignment of resources and activities;
  • Focusing on what matters the most for the organization;
  • Measuring performance;
  • Providing feedback and opportunities to improve.

Mapping the performance management system will enable managers to better understand the tools they are using and how they interact and generate the system’s dynamics.

Main tools

This is an example of a high level performance management architecture, provided by The KPI Institute.

Performance Management System

The first prerequisite for establishing a performance management system is to clarify the strategy by analyzing the organization’s current state and its external environment. The mandate represents a validation, coming from top management, to support the implementation process. The strategy plan should be translated into clear, actionable short and long term objectives.

The Desired State of Evolution communicates where the company wants to be in 3 or 5 years, in terms of clear, desired result levels. The strategy map also translates strategy into actions by presenting objectives and interconnections between them. These objectives are further detailed in the Performance Scorecard, where each of them has at least one key performance indicator (KPI) assigned. KPIs are used to monitor the progress done in achieving that specific objective.

The Portfolio of Initiatives, consisting in all organizational projects, should be aligned to the Desired State of Evolution, as they are the levers for strategic achievement. Initiatives should not receive approval unless they support the strategic plan.

The performance dashboard provides visibility to daily operations and enables managers to take timely actions at departmental level.

At employee level, each individual performance plan contributes to achieving the organizational strategy. The individual performance plans can consist in an individual scorecard, a competency and a behavior framework.

Main processes

Some of the most important processes that take place within the performance management system are:

  • KPI selection and KPI design;
  • KPI measurement;
  • Data gathering for KPIs;
  • KPI reporting.

In addition, there is a constant feed-forward and feedback process that provides the necessary information for the system to adapt to changes and function properly. This constant provision of information also facilitates the organizational learning process.

Governance

The Performance Management System should be designed and managed by a Strategy or Performance Office. Whether there is an entire team or just one person in the department, accountability is important for an efficient system management. Responsibilities of the Performance Architect or Strategy Managers include:

  • Coordinating the KPI implementation project;
  • Designing the framework and all instruments used;
  • Providing training and awareness sessions for all stakeholders involved, like KPI owners and data custodians, to better understand the system;
  • Providing support to KPI owners and data custodians;
  • Facilitating the organizational performance review meetings;
  • Maintaining an updated performance management system;
  • Facilitating strategic planning and strategy review;

The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.

References:

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Comments (27)

  • Wegdan Hugaira

    |

    We use performance management systems to : Facilitating strategy implementation;
    Ensuring alignment of resources and activities;
    Focusing on what matters the most for the organization;
    Measuring performance;
    the most important processes in the performance management system are:
    ( kpi selection, measurement, data gathering , reporting )
    The main purpose of a performance management system is measuring progress and improving performance.

    Reply

  • Mohammad Jarrash

    |

    i like below statement:
    “The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.”

    Reply

  • Houda Hedi Baccouche

    |

    The main roles of performance management systems are: facilitating strategy implementation; ensuring alignment of resources and activities; focusing on what matters the most for the organization; measuring performance; providing feedback and opportunities to improve by using many tools specially: a desired state of evolution, a strategy map, a balanced scorecard, a portfolio of initiatives and performance dashboard. All this couldn’t be realized without the support of the governing body.

    Reply

  • Muidh AlWuthainani

    |

    As per KPI Institute the roles of performance management system are facilitating strategy implementation, ensuring alignment of resources and activities, focusing on what matters the most for the organization, measuring performance, & providing feedback and opportunities to improve. It is implemented through certain processes such KPI selection and KPI design, KPI measurement, Data gathering for KPIs & KPI reporting. And using special tools: strategy mapping, portfolio of initiatives, desired state of evolution, performance scorecard & performance dashboard. The performance management system should be governed by strategy or performance office.

    Reply

  • Nada Ahmed

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    In my opinion Performance Management System enables strategy managers to assess and measure the overall processes and improve the performance which can help them to achieve the short and long term strategic objectives.

    Reply

  • munirah almalki

    |

    performance management system are facilitating strategy implementation, ensuring alignment of resources and activities, focusing on what matters the most for the organization, measuring performance, & providing feedback and opportunities to improve. It is implemented through certain processes such KPI selection and KPI design, KPI measurement, Data gathering for KPIs & KPI reporting. And using special tools: strategy mapping, portfolio of initiatives, desired state of evolution, performance scorecard & performance dashboard.

    Reply

  • Gabriel Melgar Montero

    |

    El objetivo principal de un sistema de gestión del rendimiento no es controlar, sino proporcionar un marco para implementar la estrategia, medir el progreso y mejorar el rendimiento.
    El sistema de gestión del rendimiento/desempeño permite a las organizaciones “facilitar la implementación de la estrategia; asegurar la alineación de recursos y actividades; enfocarse en lo que más le importa a la organización; medir el desempeño; proporcionar retroalimentación y oportunidades de mejora”, mediante el uso de herramientas como el “Análisis interno y externo de la organización; el estado de evolución deseado; mapa estratégico; cuadro de mando de rendimiento; portafolio de iniciativas y un panel de rendimiento”. Entre los principales procesos que se presentan en el sistema de gestión de rendimientos están la “Selección y diseño de los KPI´s; la medición de los KPI; la recolección de datos y el informe de los KPI´s”. Todo este sistema de gestión de rendimiento/desempeño idealmente debe ser administrado por una oficina del rendimiento o unidad de planificación estratégica de la organización.

    Reply

  • Fahad Bin Shuayl

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    The Performance Management System is about:
    • Facilitating strategy implementation;
    • Ensuring alignment of resources and activities;
    • Focusing on what matters the most for the organization;
    • Measuring performance;
    • Providing feedback and opportunities to improve.
    Important processes that take place within the performance management system are:
    • KPI selection and KPI design;
    • KPI measurement;
    • Data gathering for KPIs;
    • KPI reporting.
    The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.

    Reply

  • Khalid Nour

    |

    The last statement in the article summarizes the main purpose of a performance management system as it is not to control, but to provide a framework for the following:
    1) implementing strategy
    2) measuring progress
    3) improving performance

    Reply

  • Reem Alqnayah

    |

    In my opinion Performance Management System is Focusing on what matters the most for the organization;Measuring performance;Facilitating strategy implementation;Providing feedback and opportunities to improve.
    The most important processes in the performance management system are KPI selection and KPI design;Data gathering for KPIs;measuring progress; improving performance;implementing strategy;KPI reporting.
    The final statement in the article summarizes the main purpose of a performance management system as it is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.

    Reply

  • Iris Daisy De Jesus

    |

    I like the statement “The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.” I believe it summarizes the objective of what a KPI is for. KPI’s are not intended for micromanagement, they are a metric to evaluate the performance of our company so we can see where we need to adjust our plans and objectives.

    Reply

  • Fahad Muhammed Al-Juhani

    |

    These objectives are further detailed in the Performance Scorecard, where each of them has at least one key performance indicator assigned. Initiatives should not receive approval unless they support the strategic plan. The performance dashboard provides visibility to daily operations and enables managers to take timely actions at departmental level. At employee level, each individual performance plan contributes to achieving the organizational strategy.

    Reply

  • FUAD ABU ALEID

    |

    the most important processes that take place within the performance management system are
    •KPI selection and KPI design;
    •KPI measurement;
    •Data gathering for KPIs;
    •KPI reporting

    Reply

  • Saeed AlQarni

    |

    Performance Management System is a continuous methodical process by which the human resources arm of a company makes personnel participatory in advancing the effectiveness of the company, by achieving the stated vision, mission, and objectives of the organization, Performance Management System helps to improve the Organizational and individual productivity of a team.

    Reply

  • Drissa TRAORE

    |

    De la lecture de cet article on peut retenir : Le système de gestion de la performance est un mode de gestion en entreprise qui consiste à fournir un cadre pour la mise en œuvre de la stratégie, la mesure des progrès et l’amélioration des performances. Les principaux rôles des systèmes de gestion de la performance peuvent être résumés comme suit:
    • Faciliter la mise en œuvre de la stratégie;
    • Assurer l’alignement des ressources et des activités;
    • Se concentrer sur ce qui compte le plus pour l’organisation;
    • Mesurer la performance;
    • Fournir des commentaires et des opportunités d’amélioration.
    La mise en place d’un système de gestion commence tout d’abord par la clarification d’un plan stratégique qui se traduit en objectifs clairs et réalisables à court et à long terme (3 à 5 ans). Les objectifs sont plus détaillés dans le tableau de bord de performance, où chacun d’eux a au moins un indicateur de performance clé (KPI) attribué. Les KPI sont utilisés pour suivre les progrès accomplis dans la réalisation de cet objectif spécifique.
    Un système de gestion des performances obéit à un processus structuré comme suit : la sélection de KPI et sa conception de KPI, la mesure de KPI, la collecte de données pour les KPI et les rapports de KPI.
    Bien qu’il soit une affaire de tous les acteurs de l’entreprise (Conseil d’Administration, le personnel, clients, fournisseurs, etc…), un système de gestion de la performance doit être impérativement conçu et géré par un bureau de la stratégie ou de la performance. Les responsabilités de l’architecte de performance ou des gestionnaires de stratégie comprennent:
    • Coordonner le projet de mise en œuvre des KPI;
    • Concevoir le cadre et tous les instruments utilisés;
    • Offrir des sessions de formation et de sensibilisation à toutes les parties prenantes impliquées, comme les propriétaires de KPI et les dépositaires de données, afin de mieux comprendre le système;
    • Fournir un soutien aux propriétaires de KPI et aux dépositaires de données;
    • Faciliter les réunions d’examen de la performance organisationnelle;
    • Maintenir un système de gestion du rendement à jour;
    • Faciliter la planification stratégique et l’examen de la stratégie;

    Reply

  • Sarah Alhammad

    |

    The main purpose of a performance management system is providing a framework for implementing strategy, measuring progress and improving performance. It helps to; facilitating strategy implementation, measuring performance, and providing feedback and opportunities to improve.
    This system will enable managers to better understand the tools they are using and how they interact and generate the system’s dynamics.
    There are main processes must be taken into account within the performance management system, such as: KPI Selection, KPI design, KPI Measurement, KPI reporting, and data gathering for KPIs.

    Reply

  • Jorge Roman Torres

    |

    Los sistemas de gestión de rendimiento en las organizaciones apoyan la implementación de la estrategia, organizando los recursos y actividades, según las necesidades que se han establecido con el fin de mejorar el desempeño. El primer paso esencial es definir la estrategia basado en el análisis actual de la organización y su entorno externo. El plan de estrategia se plasma en objetivos claros, viables a corto y largo plazo, con el fin de esbozar hacia donde se quiere llegar en 3 ó 5 años en términos de niveles claros y esperados. Los objetivos que se establecen deben tener asignado un indicador clave de rendimiento (KPI), el cual facilita el monitoreo de progreso hacia el logro del objetivo.
    Los procesos importantes del sistema de gestión del desempeño son:
    Selección del KPI y diseño de KPI
    Medición de KPI
    Recopilación de datos para KPI
    Informes de KPI
    Es importante que en las organizaciones exista una oficina de Estrategia o desempeño para una gestión eficiente del sistema.

    Reply

  • Sawsan Ghandour

    |

    The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.It is a process through which the organization aligns their mission, goals and objectives with available resources

    Reply

  • Ghadeer jahjah

    |

    To establish a performance management system, you have to have a clear strategy based on the current state analysis, translated to a clear and actionable long term objectives reflects the desired state of evolution. these objectives are further detailed in the performance scorecard where each of them has at least one KPI assigned.
    The main purpose of a performance management system is not to control, But to provide framework for implementing strategy, measuring progress and improving performance.

    Reply

  • Kifah Ammar

    |

    I think the Process Performance is an important parameter to measure. Whenever we have current Process or process-to-be in the future, we shall think about what parameters can be extracted that can conclude a process performance with time.

    Reply

  • Nora AlZuhairi

    |

    I think is very important Maintaining an updated performance management system or all stakeholders involved

    In addition, I like this statement: The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance.

    best regards

    Reply

  • Shadi K. Abdallah

    |

    In order for an organization to reach (or measure how well it is going to) desired state is to start with STRATEGY which in turn shall be broken down into CLEAR and ACTIONALBLE objectives on short and long-term. Others such as KPIs and initiates will follow later to inform decision maker/taker and the organization whether or not it is on track to achieve its stated goals and objectives towards desired state of evolution. Looking at the main process of the performance management system we find that it starts with KPI selection (critical factors and most important to the organization) and ends with reporting (important to take/make decision by the management/KPI owner. I believe data custodian and KPI owners are playing major role in the process because they determine the quality and accuracy of the data and the timely action to enhance performance overall.!

    Reply

  • Samir MohamedAbdelghafar

    |

    The performance management system works to implement the strategy in a large proportion by making measures to ensure that the desired goal is achieved gradually without waiting until the end of the year, discovering weaknesses and working to treat and develop them and convert them to positive points and the last sentence was wonderful, which shows that the main purpose of the performance management system is not control, but providing A framework for implementing the strategy, measuring progress and improving performance

    Reply

  • hamid khadir

    |

    un système de gestion de la performance doit être impérativement conçu et géré par un bureau de la stratégie ou de la performance.Qui ce dernier peut aider à la création de tout un service au sein de l’organisation d’une entreprise afin d’assurer l’aplication et faire impliquer tous les facteurs de succès .

    Reply

  • Mun Kam Wai

    |

    Performance management system does come with 2 stages, which is process and governance, from the top of Desired State of Evolution until individual performance plan, the main roles of performance management systems Facilitating strategy implementation; Ensuring alignment of resources and activities; Focusing on what matters the most for the organization; Measuring performance; Providing feedback and opportunities to improve. this is the best practice of continuous improve to our organization.

    Reply

  • Francesca

    |

    The Performance Management System should be designed and managed by a Strategy or Performance Office. Whether there is an entire team or just one person in the department, accountability is important for an efficient system management. Responsibilities of the Performance Architect or Strategy Managers include:

    Reply

  • Faisal Fahd

    |

    *We use performance management systems to:
    1-Facilitating strategy implementation.
    2-Ensuring alignment of resources and activities.
    3-Focusing on what matters the most for the organization.
    Measuring performance.
    4-Providing feedback and opportunities to improve.

    *Some of the most important processes that take place within the performance management system are:
    1-KPI selection and KPI design.
    2-KPI measurement.
    3-Data gathering for KPIs.
    4-KPI reporting.

    *Responsibilities of the Performance Architect or Strategy Managers include:
    1-Coordinating the KPI implementation project.
    2-Designing the framework and all instruments used.
    3-Providing support to KPI owners and data custodians.
    4-Facilitating the organizational performance review meetings.

    (The main purpose of a performance management system is not to control, but to provide a framework for implementing strategy, measuring progress and improving performance)

    Reply

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