View source for Business performance management

{{Short description|Processes to bring output into alignment with goals}}
[[File:Organizational Performance.jpg|thumb|Organizational performance and its types.<ref>{{Cite journal |last1=Mahmoudi |first1=Amin |last2=Javed |first2=Saad Ahmed |date=2022 |title=Performance Evaluation of Construction Sub‐contractors using Ordinal Priority Approach |url=https://www.sciencedirect.com/science/article/abs/pii/S0149718921001178 |journal=Evaluation and Program Planning |volume=91 |pages=102022 |doi=10.1016/j.evalprogplan.2021.102022 |pmid=34736766 |s2cid=239609916 |issn=0149-7189}}</ref>|upright=1.35|alt=Block diagram]]
{{Business administration}}
'''Business performance management''' ('''BPM''') (also known as '''corporate performance management''' ('''CPM''')<ref>"Introducing the CPM Suites Magic Quadrant", Lee Geishecker and Frank Buytendijk, 2 October 2002, www.gartner.com, M-17-4718</ref> '''enterprise performance management''' ('''EPM'''),<ref>
{{cite journal|last1=Frolick|first1=Mark N.|first2=Thilini R.|last2=Ariyachandra|date=Winter 2006|title=Business performance management: one truth|url=http://snyfarvu.farmingdale.edu/~schoensr/bpm.pdf|url-status=dead|journal=Information Systems Management|volume=23|publisher=www.ism-journal.com|pages=41–48|doi=10.1201/1078.10580530/45769.23.1.20061201/91771.5|s2cid=11317244|archive-url=https://web.archive.org/web/20110719192210/http://snyfarvu.farmingdale.edu/~schoensr/bpm.pdf|archive-date=2011-07-19|access-date=2010-02-21|quote=Business Performance Management (BPM) [...] is also known and identified by other names, such as corporate performance management and enterprise performance management.}}</ref><ref>{{cite conference|first=Sana|last=Mojdeh|date=2005-12-20|title=Technology-enabled Business Performance Management: Concept, Framework, and Technology|url=http://www.mbaforum.ir/download/335_Full_sanamojdeh.pdf|conference=3rd International Management Conference|pages=1–9|archive-url=https://web.archive.org/web/20110722015044/http://www.mbaforum.ir/download/335_Full_sanamojdeh.pdf|archive-date=2011-07-22|access-date=2010-02-21|quote=Confusion also arises because industry experts can not agree what to call BPM, let alone how to define it, META Group and IDC use the term 'Business Performance Management', Gartner Group prefers 'Corporate Performance Management', and others favor 'Enterprise Performance Management'.|url-status=dead}}</ref> '''organizational performance management''', or '''performance management''') is a management approach which encompasses a set of processes and analytical tools to ensure that an organization's activities and output are aligned with its [[Philosophy:Goal|goal]]s. BMP is associated with [[Business process management|business process management]],<ref>vom Brocke, J. & Rosemann, M. (2010), [http://www.bpm-handbook.com Handbook on Business Process Management: Strategic Alignment, Governance, People, and Culture] (International Handbooks on Information Systems). Berlin: Springer</ref> a larger framework managing organizational processes.

It aims to measure and optimize the overall performance of an organization, specific departments, individual employees, or processes to manage particular tasks.<ref>{{Cite book|url=https://books.google.com/books?id=s3WpPyiz3IIC|title=International Human Resource Management|last1=Harris|first1=Hilary|last2=Brewster|first2=Chris|last3=Sparrow|first3=Paul|date=2003|publisher=CIPD Publishing|isbn=9780852929834|language=en}}</ref> Performance standards are set by senior leadership and task owners which may include expectations for job duties, timely feedback and coaching, evaluating employee performance and behavior against desired outcomes, and implementing reward systems.<ref>{{Cite web|url=https://www.opm.gov/policy-data-oversight/performance-management/|title=Performance Management|website=U.S. Office of Personnel Management|access-date=2019-02-28}}</ref> BPM can involve outlining the role of each individual in an organization in terms of functions and responsibilities.<ref>{{Cite web|date=2020-11-12|title=Performance Management|url=https://www.academia.edu/42049818|last1=Hameed |first1=Waseem }}</ref>

== History ==
By 2017, [[Company:Gartner|Gartner]] had reclassified CPM as "financial planning and analysis (FP&A)" and "financial close" to reflect an increased focus on planning and the emergence of new solutions for financial close management.<ref>{{Cite web|url=https://www.gartner.com/doc/3823164/basics-refocusing-corporate-performance-management|title=Back to Basics: The Refocusing of Corporate Performance Management|last1=Van Decker|first1=John E.|last2=Rayner|first2=Nigel|website=www.gartner.com|publisher=Gartner|date=October 31, 2017|id=G00341616|access-date=2019-04-16|last3=Iervolino|first3=Christopher}}</ref>

== Definition and scope ==
New technology realizes corporate strategic outcomes and describes risk-management programs.<ref>{{cite book |chapter=Organizational Structures Supporting Rich Survival |chapter-url=https://link.springer.com/chapter/10.1007/978-3-642-14316-8_11 |publisher=Springer |doi=10.1007/978-3-642-14316-8_11 |access-date=17 March 2023 |title=Organizations |date=2010 |last1=Achterbergh |first1=Jan |last2=Vriens |first2=Dirk |pages=351–378 |isbn=978-3-642-14315-1 }}</ref>

== Application ==
Performance-management principles are used most often in the workplace and can be applied wherever people interact with their environments to produce desired effects, such as health settings.<ref>{{cite conference |vauthors=Mettler T, Rohner P |title=Performance management in health care: The past, the present, and the future |conference=International Conference Business Informatics |location=Vienna |pages=699–708 |year=2009 |url=https://www.alexandria.unisg.ch/214579/1/WI2009.pdf |archive-url=https://ghostarchive.org/archive/20221009/https://www.alexandria.unisg.ch/214579/1/WI2009.pdf |archive-date=2022-10-09 |url-status=live}}</ref> How performance management is applied is important to get the most out of a group, and can improve day-to-day employee performance. It must not encourage internal competition, but teamwork, cooperation, and trust.<ref>{{Cite journal|last1=Smith|first1=Marisa|last2=Bititci|first2=Umit Sezer|date=2017-09-04|title=Interplay between performance measurement and management, employee engagement and performance|url=http://dx.doi.org/10.1108/ijopm-06-2015-0313|journal=International Journal of Operations & Production Management|volume=37|issue=9|pages=1207–1228|doi=10.1108/ijopm-06-2015-0313|issn=0144-3577}}</ref> 

Performance management aligns company goals with those of teams and employees to increase efficiency, [[Finance:Productivity|productivity]], and profitability.<ref>{{cite book|title=Performance Management: The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life|last=Zaffron, Logan|first=Steve, David|date=Feb 2009|edition=1st}}</ref> Its guidelines stipulate the activities and outcomes by which employees and teams are evaluated during performance appraisal.<ref>{{Cite web|url=https://www.opm.gov/policy-data-oversight/senior-executive-service/performance/|title=Performance|website=U.S. Office of Personnel Management|access-date=2019-02-28}}</ref> Many types of organizations use performance management systems (PMS) to evaluate themselves according to their targets, objectives, and goals; a research institute may use PMS to evaluate its success in reaching development targets.<ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith K. |date=2021-06-01 |title=Role of Peripheral Analysis Methods in Adoption of Successful KPIs for a Research Institute Working Towards Commercial Agriculture |url=https://doi.org/10.1007/s42943-021-00021-z |journal=International Journal of Global Business and Competitiveness |language=en |volume=16 |issue=1 |pages=61–71 |doi=10.1007/s42943-021-00021-z |issn=0976-1888 |pmc=8039501}}</ref> Complex performance drivers such as the societal contribution of research may be evaluated with other performance drivers, such as research commercialization and collaborations, in sectors like commercial agriculture.<ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith K. |last3=Seneviratne |first3=Gamini |date=2022-12-31 |title=Probing into the concept of 'research for society' to utilize as a strategy to synergize flexibility of a research institute working on eco-friendly commercial agriculture |journal=All Life |volume=15 |issue=1 |pages=220–233 |doi=10.1080/26895293.2022.2038280 |s2cid=246761304 |issn=2689-5293|doi-access=free }}</ref><ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith Krishantha |date=2021-01-01 |title=Role of key performance indicators on agile transformation of performance management in research institutes towards innovative commercial agriculture |url=https://doi.org/10.1108/JSTPM-10-2020-0151 |journal=Journal of Science and Technology Policy Management |volume=13 |issue=2 |pages=213–243 |doi=10.1108/JSTPM-10-2020-0151 |s2cid=237685948 |issn=2053-4620}}</ref> A research institute may use data-driven, real-time PMS to deal with complex performance-management challenges for a country developing its agricultural sector.<ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith K. |last3=Kodituwakku |first3=Saluka R. |date=2022-05-23 |title="Connected researches" in "smart lab bubble": A lifeline of techno-society space for commercial agriculture development in "new normal" |journal=New Techno Humanities |volume=2 |pages=79–91 |language=en |doi=10.1016/j.techum.2022.05.001 |s2cid=249035865 |issn=2664-3294|doi-access=free }}</ref><ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith K. |last3=Kodituwakku |first3=Saluka R. |last4=Madhushani |first4=K. B. |date=2022-08-22 |title=Intelligently driven performance management: an enabler of real-time research forecasting for innovative commercial agriculture |url=https://doi.org/10.1007/s43545-022-00484-8 |journal=SN Social Sciences |language=en |volume=2 |issue=9 |pages=168 |doi=10.1007/s43545-022-00484-8 |issn=2662-9283 |pmc=9395937 |pmid=36033638}}</ref>

Werner Erhard, Michael C. Jensen, and their colleagues developed a new approach to improving performance in organizations. Their work emphasizes how constraints imposed by one's worldview can impede cognitive abilities, and explores the source of performance which is inaccessible by cause-and-effect analysis. They say that a person's performance correlates with their work situation, and language (including what is said and unsaid in conversations) plays a major role. Performance is more likely to be improved when management understands how employees perceive the world and implementing changes which are compatible with that worldview.<ref name=madden>{{cite book|last1=Madden|first1=Bartley J.|title=Reconstructing Your Worldview|date=September 2014|publisher=Learning What Works Inc.|isbn=978-0988596931|page=99}}</ref>

=={{anchor|Benefits of performance management}}Public-sector effects==
In the public sector, the effects of performance-management systems have ranged from positive to negative; this suggests that differences among systems and the context in which they are implemented affect their success or failure.<ref>Nielsen, Poul A. 2014. "Performance Management, Managerial Authority, and Public Service Performance." ''Journal of Public Administration Research and Theory''. 24(2):431–458.</ref><ref>Gerrish, Ed. 2015. "The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis." ''Public Administration Review'' 76(1):48–66.</ref>

=={{anchor|How performance management can fail}}How it can fail==
[[File:Animal job interview.jpg|thumb|alt=A cartoon with a smiling rabbit and a noncommittal fox|Employees managed by those with unclear expectations may erroneously think that they are performing well.]]
Employees who question the fairness of a performance-management system or are overly competitive will affect its effectiveness; those who do not feel adequately rewarded become disgruntled with the process. Without proper system planning, employees may view it as mandating compliance.<ref>Peacock, M., Stewart, E. B., & Belcourt, M. (2020). Managing Employee Performance. In ''Understanding human resources management: A Canadian perspective'' (pp. 211-239). Toronto: Nelson Education.</ref>

==Organizational development==
In organizational development (OD), performance can be thought of as actual versus desired results; where actual results fall short of those desired is the performance-improvement zone. [[Finance:Performance improvement|Performance improvement]] aims to close the gap between the two.<ref>{{Cite journal |last1=Abeysiriwardana |first1=Prabath Chaminda |last2=Jayasinghe-Mudalige |first2=Udith K. |date=2022-08-10 |title=Single window performance management: a strategy for evaluation integrated research culture in the commercial agriculture sector |url=https://doi.org/10.1007/s43546-022-00297-0 |journal=SN Business & Economics |language=en |volume=2 |issue=9 |pages=128 |doi=10.1007/s43546-022-00297-0 |s2cid=251504791 |issn=2662-9399}}</ref>

Other organizational-development definitions differ slightly. According to the U.S. Office of Personnel Management (OPM), performance management is a system or process in which work is planned and expectations are set; performance of the work is monitored; staff ability to perform is developed; performance is rated and the ratings summarized, and top performance is rewarded.<ref>US Office of Personnel Management, [https://www.opm.gov/policy-data-oversight/performance-management/measuring/employee_performance_handbook.pdf A Handbook for Measuring Employee Performance], published March 2018, accessed 26 October 2022</ref>

== {{anchor|Information monitoring|Managerial adjustments|Considerations of implementation}}Design and implementation ==

An organization-wide 360-degree feedback process integrated into the organization's culture can be a powerful tool for communicating and instituting change, rapidly touching all members of the organization when new markets, strategies, values and structures are introduced into the system.<ref>Bracken, D., & Rose, D., "When does 360-degree feedback create behavior change? And how would we know it when it does?", ''Journal of Business and Psychology'', 26(2), 183-192</ref> Each year, companies spend considerable money on their performance-management systems. For performance management to succeed, businesses must continue to adapt their system to correct current deficiencies. Some aspects, such as goal setting or performance bonuses, may resonate more with employees than others.<ref>{{Cite journal|last1=Kakkar|first1=Shiva|last2=Dash|first2=Sanket|last3=Vohra|first3=Neharika|last4=Saha|first4=Surajit|date=2020-04-23|title=Engaging employees through effective performance management: an empirical examination|url=http://dx.doi.org/10.1108/bij-10-2019-0440|journal=Benchmarking|volume=27|issue=5|pages=1843–1860|doi=10.1108/bij-10-2019-0440|s2cid=219006172 |issn=1463-5771}}</ref>

=== {{anchor|Selection of goals}}Outcomes ===

According to Richard et al. (2009), organizational-performance metrics encompass three outcomes:<ref>{{cite journal | last1=Richard | first1=Pierre J. | last2=Devinney | first2=Timothy M. | last3=Yip | first3=George S. | last4=Johnson | first4=Gerry | title=Measuring Organizational Performance: Towards Methodological Best Practice | journal=Journal of Management | publisher=SAGE Publications | volume=35 | issue=3 | date=2009-02-06 | issn=0149-2063 | doi=10.1177/0149206308330560 | pages=718–804| s2cid=143585204 }}</ref>
* Financial performance, such as profits, return on assets, and [[Finance:Return on investment|return on investment]]
* Product market performance, such as sales and [[Finance:Market share|market share]]
* Total shareholder return, economic value added, and similar

[[Organization:Organizational effectiveness|Organizational effectiveness]]<ref name=upad2014>{{cite journal | last1=Upadhaya | first1=Bedanand | last2=Munir | first2=Rahat | last3=Blount | first3=Yvette | title=Association between performance measurement systems and organisational effectiveness | journal=International Journal of Operations & Production Management | publisher=Emerald | volume=34 | issue=7 | year=2014 | issn=0144-3577 | doi=10.1108/ijopm-02-2013-0091 | pages=853–875}}</ref> is a similar term.

== {{anchor|Application software types}}Technology ==
Business performance management requires large organizations to collect and report large volumes of data. Software vendors, particularly those offering [[Business intelligence|business intelligence]] tools, offer products to assist in this process. BPM is often incorrectly understood as relying on software to work, and many definitions suggest software as essential to the approach.<ref>[http://www.bpmmag.net/magazine/article.html?articleID=13966 BPM Mag, What is BPM?] {{webarchive|url=https://web.archive.org/web/20061212062646/http://www.bpmmag.net/magazine/article.html?articleID=13966|date=December 12, 2006}}</ref> Interest in BPM by the software community may be sales-driven.<ref>[http://www.information-management.com/issues/20050501/1026064-1.html The Next Generation of Business Intelligence: Operational BI] {{Webarchive|url=https://web.archive.org/web/20090802091823/http://www.information-management.com/issues/20050501/1026064-1.html |date=2009-08-02 }}</ref><ref>{{cite journal|last=White|first=Colin|date=May 2005|title=The Next Generation of Business Intelligence: Operational BI|url=http://www.information-management.com/issues/20050501/1026064-1.html?zkPrintable=true|journal=Information Management Magazine|access-date=2010-02-21|quote=The biggest growth area in operational BI analysis is in the area of business performance management (BPM).|archive-date=2011-07-22|archive-url=https://web.archive.org/web/20110722135359/http://www.information-management.com/issues/20050501/1026064-1.html?zkPrintable=true|url-status=dead}}</ref>

=={{anchor|Researchers}}See also==
* [[Social:Behavioral systems analysis|Behavioral systems analysis]]
* [[Data visualization]]
* [[Electronic performance support systems]]
* Executive information systems
* [[Integrated business planning]]
* [[IT performance management]]
* List of management topics
* Operational performance management
* [[Organization:Organizational behavior management|Organizational behavior management]]
* [[Organization:Organizational engineering|Organizational engineering]]
* [[PDCA]]
* [[Social:Performance measurement|Performance measurement]]
* Rosabeth Moss Kanter
* [[Social:Vitality curve|Vitality curve]] (a.k.a stack ranking)
* [[Strategy Markup Language]] and particularly StratML Part 2, Performance Plans and Reports

==References==
<references />

==Further reading==
{{Refbegin|2}} 
* ''Business Intelligence and Performance Management: Theory, Systems, and Industrial Applications'', P. Rausch, A. Sheta, A. Ayesh (Eds.), Springer Verlag U.K., 2013, {{ISBN|978-1-4471-4865-4}}. 
* ''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.
* ''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

{{refend}}

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* Plug-In T12 Business Process http://www.sci.brooklyn.cuny.edu/~firat/mis/PlugInT12.pdf 
*{{Cite web | date = 2006-02-13
| url         = http://www.businessweek.com/magazine/content/06_07/b3971083.htm
| archive-url = https://web.archive.org/web/20060209014650/http://www.businessweek.com/magazine/content/06_07/b3971083.htm
| url-status  = dead
| archive-date = February 9, 2006
| title       = Giving the Boss the Big Picture: A dashboard pulls up everything the CEO needs to run the show
| work        = BusinessWeek| publisher = [[Company:Bloomberg L.P.|Bloomberg L.P.]]
| access-date  = 2010-02-22}}
* Business Finance: ''[http://businessfinancemag.com/article/bred-tough-best-breed-2009-0729 Bred Tough: The Best-of-Breed, 2009]'' (July 2009)
* [https://www.whitehouse.gov/wp-content/uploads/2022/03/ap_5_delivering_fy2023.pdf Defining success through strategic planning and priority goal setting]
* [https://www.opm.gov/policy-data-oversight/performance-management/reference-materials/more-topics/the-balanced-scorecard/ The Balanced Scorecard]
* [https://www.opm.gov/services-for-agencies/performance-management/organizational-performance-management/ Organizational Performance Management]

{{Management}}
{{Aspects of organizations}}

[[Category:Information technology management]]
[[Category:Management by type]]
[[Category:Organizational theory]]

{{Sourceattribution|Business performance management}}