Performance Management: Overall Goal and Basic Steps

© Copyright Carter McNamara, MBA, PhD, Authenticity Consulting, LLC. Adapted from Field Guide to Consulting and Organizational Development

Organizations try to manage the performance of each employee, team and process and even of the organization itself. The performance management process is very similar, regardless of where it is applied. Information in this topic describes the general performance management process. The information is customized for each application in the topics Employee Performance Management, Group Performance Management and Organizational Performance Management.

Sections of This Topic Include

Overall Goal
Basic Steps

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Overall Goal

Overall Goal and Focuses of Performance Management

The overall goal of performance management is to ensure that the organization and all of its subsystems (processes, departments, teams, employees, etc.) are working together in an optimum fashion to achieve the results desired by the organization.

Performance Improvement of the Organization or a Subsystem is an Integrated Process

Note that because performance management strives to optimize results and alignment of all subsystems to achieve the overall results of the organization, any focus of performance management within the organization (whether on department, process, employees, etc.) should ultimately affect overall organizational performance management as well.

Ongoing Activities of Performance Management

Achieving the overall goal requires several ongoing activities, including identification and prioritization of desired results, establishing means to measure progress toward those results, setting standards for assessing how well results were achieved, tracking and measuring progress toward results, exchanging ongoing feedback among those participants working to achieve results, periodically reviewing progress, reinforcing activities that achieve results and intervening to improve progress where needed. Note that results themselves are also measures.

Note that these general activities are somewhat similar to several other major approaches in organizations, e.g., strategic planning, management by objectives, Total Quality Management, etc. Performance management brings focus on overall results, measuring results, focused and ongoing feedback about results, and development plans to improve results. The results measurements themselves are not the ultimate priority as much as ongoing feedback and adjustments to meet results.

The steps in performance management are also similar to those in a well-designed training process, when the process can be integrated with the overall goals of the organization. Trainers are focusing much more on results for performance. Many trainers with this priority now call themselves performance consultants.

Basic Steps

Various authors propose various steps for performance management. The typical performance management process includes some or all of the following steps, whether in performance management of organizations, subsystems, processes, etc. Note that how the steps are carried out can vary widely, depending on the focus of the performance efforts and who is in charge of carrying it out. For example, an economist might identify financial results, such as return on investment, profit rate, etc. An industrial psychologist might identify more human-based results, such as employee productivity.

The following steps are described more fully in the topics Performance Plan,
Performance Appraisal and Development Plan, including through use of an example application. The steps are generally followed in sequence, but rarely followed in exact sequence. Results from one step can be used to immediately update or modify earlier steps. For example, the performance plan itself may be updated as a result of lessons learned during the ongoing observation, measurement and feedback step.

NOTE: The following steps occur in a wide context of many activities geared towards performance improvement in an organization, for example, activities such as management development, planning, organizing and coordinating activities.

1. Review organizational goals to associate preferred organizational results in terms of units of performance, that is, quantity, quality, cost or timeliness (note that the result itself is therefore a measure)

2. Specify desired results for the domain -- as guidance, focus on results needed by other domains (e.g., products or services need by internal or external customers)

3. Ensure the domain's desired results directly contribute to the organization's results

4. Weight, or prioritize, the domain's desired results

5. Identify first-level measures to evaluate if and how well the domain's desired results were achieved

6. Identify more specific measures for each first-level measure if necessary

7. Identify standards for evaluating how well the desired results were achieved (e.g., "below expectations", "meets expectations" and "exceeds expectations")

8. Document a performance plan -- including desired results, measures and standards

9. Conduct ongoing observations and measurements to track performance

10. Exchange ongoing feedback about performance

11. Conduct a performance appraisal (sometimes called performance review)

12. If performance meets the desired performance standard, then reward for performance (the nature of the reward depends on the domain)

13. If performance does not meet the desired performance standards, then develop or update a performance development plan to address the performance gap* (See Notes 1 and 2)

14. Repeat steps 9 to 13 until performance is acceptable, standards are changed, the domain is replaced, management decides to do nothing, etc.

* Note 1: Inadequate performance does not always indicate a problem on the part of the domain. Performance standards may be unrealistic or the domain may have insufficient resources. Similarly, the overall strategies or the organization, or its means to achieving its top-level goals, may be unrealistic or without sufficient resources.

* Note 2: When performance management is applied to an employee or group of employees, a development plan can be initiated in a variety of situations, e.g.,:
a.) When a performance appraisal indicates performance improvement is needed, that is, that there is a "performance gap"
b.) To "benchmark" the status of improvement so far in a development effort
c.) As part of a professional development for the employee or group of employees, in which case there is not a performance gap as much as an "growth gap"
d.) As part of succession planning to help an employee be eligible for a planned change in role in the organization, in which case there also is not a performance gap as much as an "opportunity gap"
e.) To "pilot", or test, the operation of a new performance management system


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Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.

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General Information -- Books About General Topic of Performance Management

Leadership and Supervision in Business - Book Cover Field Guide to Leadership and Supervision in Business
by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools to effectively lead:
1. Yourself
2. Other individuals in the business
3. Groups and teams in the business
4. Business organizations
5. As well as all functions within the business organization.

Many of the Library's materials about business, leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.
Leadership and Supervision With Nonprofit Staff - Book Cover Field Guide to Leadership and Supervision With Nonprofit Staff
by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools customized for personnel in nonprofits to effectively lead:
1. Yourself
2. Other individuals in the nonprofit
3. Groups and teams in the nonprofit
4. Nonprofit organizations
5. As well as all functions within the nonprofit organization.

Many of the Library's materials about nonprofit leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.

To get more information about each of the following practical books, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.

Also see

For Your Own Performance Management
Personal Productivity -- Recommended Books

For Employee Performance Management
Supervision -- Related Books

For Group Performance Management
Facilitation and Teams -- Recommended Books

For Organizational Performance Management
Organizational Development -- Recommended Books

For Nonprofit Organizational Performance Management
Nonprofit Capacity Building -- Recommended Books




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