Performance Management

by Peter Parkes

Introduction

We now live in a global economy where our competitors can emerge rapidly in other countries, often as easily as from next door. For many industries, the only viable way to stay in the game is through continuous innovation, combined with process and performance improvement.

For public sector bodies, competition is effectively barred, but these organisations are still required to meet external Performance Indicators (PIs). Local government authorities and councils must report against a suite of Best Value Performance Indicators (BVPIs) to central government. Performance against these measures is reviewed by the Audit Commission and published annually. For many CEOs of public sector organisations, their ability to keep their job relies on at least maintaining rank against a basket of performance measures in an improving field. If performance is judged to be below par, there is now the option of outsourcing processes or whole functions to the private sector.

Managing organisational performance is not an option. It is a necessity, whether you are in the private sector, public sector, or public private partnerships.

‘Management’ means, in the last analysis, the substitution of thought for brawn and muscle, of knowledge for folklore and superstition, and of cooperation for force.

Peter Drucker

As with most corporate objectives, performance measures and requirements cascade into personal performance targets for directors, managers, supervisors and individuals. A separate topic deals with the Performance Management of individuals.

Although performance management is fundamental to maintaining commercial viability in today’s global economy, entries in Wikipedia for performance management, KPIs, business intelligence and so on amount to a few pages at best and contain most of the range of article quality warnings available. Given the importance and history of the subject, this is disappointing, and reflects the current status of this topic as a poorly understood art rather than a codified science.

In this topic we describe how performance management works – or should work. An essential part of the process is the use of certain tools and techniques, including Performance Measures, Key Performance Indicators, Benchmarking, Business Intelligence, Management Information Systems, Scorecards, Dashboards and, above all, good management!