KPI 101

 

Performance management as a discipline contains elements that closely link it to a multitude of other disciplines and organisational capabilities: Strategy Management, Project Management, Human Resources Management, Accounting and Psychology, to name a few. It is used in almost all scientific disciplines, as it is a subset of almost all human activities.

 

Individual performance management  

The traditional level at which performance management is used in organisations is the individual level. Individual performance management is perhaps the level with the longest evolution in history, as it mirrors the level of organisational maturity.

 

Operational performance management  

Performance management at operational level is linked to operational management, as its focus is the achievement of departmental or group objectives. Although it is aligned with corporate strategy, its focus is more functional. Scorecards and dashboards are some of the key tools used. For example Human Resources (HR) Dashboards are used to collect and analyse human resources management indicators that guide the management decisions of HR departments. Similar tools in other functional areas are Marketing Scorecards, Portfolio Dashboards and Supplier Scorecards. A wide variety of operational performance management tools are also used by Finance departments, where management accountants generate a wide variety of financial reports used to guide performance management decisions at operational level.

 

Strategic performance management evolution 

At strategic level, performance management deals with the achievement of organisational objectives. Practitioners refer to it as corporate, business or enterprise performance management, this being the highest and most complete level of usage of performance management principles in organisations.

The key processes related to strategic performance management systems are strategy formulation and execution, both subsets of strategic management. The most popular tools are the BSC and the Performance Prism. There are, however, numerous other frameworks and quality awards, such as the Baldrige Award and the European Foundation for Quality Management (EFQM) Excellence Model, used to guide the achievement of organisational goals.