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What Is Performance Management?

We are working with performance indicators. Organizational design and corporate culture as success factors. Performance management and continuous improvement of results. Behavior, attitude, and corporate culture as success factors in performance management. Insights, examples, trends, and tips.

What is Performance Management

Performance management is steering on organizational goals and results. The first step is to identify these goals. We find this continued in the organization’s strategy in terms of turnover, margin, new products, better stock management, fewer returns or outages, and greater customer focus. Subsequently, a system of indicators can be used to keep track of the results based on regular reports.

Many organizations have such a system of performance indicators (also called key performance indicators or KPIs). In practice, it is often limited to a periodic perpetual exercise in the top team under the financial manager’s guidance. Deeper in the organization, people don’t know about anything or see it as a top-down control tool that you are occasionally bothered with.

In that case, ‘steering’ is mainly seen as ‘wanting to measure and want to know by the top.’

Performance management: trend

Performance management continues. It is about ‘ continuous improvement at all levels of the organization. ‘ This is possible by making performance management a living reality in the organization. All parts work on it by connecting the indicators to their performance. And by discussing the results in the work meeting to improve the results.

That often goes wrong. We have known for years why that is, but the practice appears to be unruly. Performance Management, doomed to failure?

The trick is to keep it simple. Sometimes they allow themselves to be fooled by an attractive ICT system of dozens of indicators, diagrams, and figures. Very impressive, but failure is near.

Let simplicity rule

We must continuously know how we are doing. Everyone must know about costs, income, and orders. Every director, every manager of ours, must feel that responsibility. Everyone should be able to clarify this to the people in the workplace.

From the start, I was already working on making the most important figures of the companies visible in a system that allows everyone to keep a finger on the pulse. The commercial ICT firms that we asked for such a system made great promises, but the result was nothing like. I wanted a simple system that continuously shows how we run based on just a few numbers. I then made the screens myself using the numbers we needed.

We still work with that system. Simple and goal-oriented, directly linked to questions such as: “Is money being made, and do we have enough orders?” Every operating company knows how it is doing.

Suppose your results are visible, then everyone understands why. The figures are known. Costs, indirect hours, order book. If costs increase or if the order book drops, there is a problem that needs to be solved.

The solution often comes in collaboration with the shop floor. There is also expertise to realize improvements. Suppose you involve people in the problems and are clear about how we are doing.

In that case, everyone will want to participate if the managers fail to do so if they do not know what is going on in the workplace if they cannot explain what is wrong with their own operating result when things go wrong. This is a flat organization with short lines of communication, our people deserve attention, and the managers must show that.

Performance management is also behavior and organizational design.

We see that performance management is more than objectives and KPIs. It is managing to focus on ‘result improvement,’ it is the relationship between bosses and the workplace and between staff and line. It’s commitment and motivation. It is an organizational design in which components have insight into their own results and are also responsible for them.

Are you wondering what you can do in your organization to make performance management work properly? Then see the examples in the articles on this page.

Instrument Performance management and indicators

Have you already tried everything and has not yet succeeded then take this test. With this instrument, you can measure the result orientation of your team and your organization. You also make the possibilities for improvement visible. The instrument focuses on questions such as:

  • Is your organization really working on improving results?
  • Is there enough involvement and action-orientation?
  • Do managers direct and stimulate the process of performance improvement?