Overview of Organizational Performance Management: Guidelines and Resources

Sections of this topic

    Overview of Organizational Performance Management: Guidelines and Resources

    Much of the content
    of this topic came from this book:
    Consulting and Organization Development - Book Cover

    © Copyright Carter McNamara,
    MBA, PhD, Authenticity Consulting, LLC

    Strongly Suggested Previous Readings

    Management: Traditional and Progressive Approaches
    Management for any Application

    Sections of This Topic Include

    What is Organizational Performance Management?
    General Guidelines for Implementing and Evaluating
    Organizational Performance Planning Phase
    Organizational Performance Appraisal Phase
    Organizational Development (Improvement) Planning
    Evaluation and Improvement


    (Although the term “performance” is conventionally used in literature
    about management, some people might have an averse reaction to that term. For
    them, they might use the term “effectiveness” instead.)

    The generic performance management cycle is the cycle of activities that recur
    in any social system that is serious about improving itself and how it works
    with its external environment, whether the system is an employee,
    recurring process in the organization or the organization itself. The cycle
    clarifies the purpose of the system, its goals in working toward the purpose
    and how those goals will be achieved. As it works to achieve them, it continually
    evaluates it progress and makes any necessary changes to improve its progress.

    In an overall organization, the organizational performance management cycle
    includes three highly integrated phases including:

    1. Performance planning
    2. Performance appraisal
    3. Performance improvement

    Significant organizational activities occur within each of the three phases,

    1. Strategic
      to clarify the purpose, goals and strategies to achieve the goals
      (performance planning).
    2. Adopting the necessary organizational
      as a strategy to achieve the goals (performance planning).
    3. Guiding the necessary organizational
      , including the necessary nature of its leadership and management,
      as a strategy to achieve the goals (performance planning).
    4. Organizational
      to monitor progress toward the goals (performance
    5. Organizational
      to the achieve goals even better (performance improvement).

    Each of these significant activities is also a cycle of highly integrated activities.
    The way that a social system does an organizational cycle depends on its culture,
    its current life
    and the expertise of the leaders and managers in the system. The same
    is true for an individual, depending on his or her personality, maturity and
    expertise in leading and managing oneself.

    However, the nature of the generic performance management cycle is changing
    as the world around us is changing. This affects performance management in organizations,
    teams and employees. See
    Management: Traditional and Progressive Approaches

    The purpose of the information in this topic is to convey the core concepts
    in organizational performance management. Your proficiency – skills and abilities
    – in the concepts would come from applying them over time, especially under
    the guidance of a person who is highly experienced in apply them, as well.

    What is Organizational Performance Management

    We are used to thinking of ongoing performance management for employees, for
    example, setting goals, monitoring an employee’s achievement of those goals,
    sharing feedback with the employee, evaluating the employee’s performance and
    then rewarding the employee’s performance. For those who did not effectively
    achieve their goals, the supervisor would work with the employee to increase
    performance or ultimately to fire the employee. That foundational performance
    management sequence applies to teams, internal recurring activities and organizations,
    as well.

    So OPM involves the recurring activities to establish organizational goals,
    monitor progress toward the goals and make adjustments to achieve those goals
    more effectively and efficiently. From a systems perspective, the overall goal
    of performance management is to ensure that the organization and all of its
    subsystems (recurring processes, teams, departments and employees) are all integrated
    and aligned together in an optimum fashion to achieve the overall results desired
    by the organization. Here are two more definitions:

    • “The term ‘Performance Management and Measurement’ refers to any integrated,
      systematic approach to improving organizational performance to achieve strategic
      aims and promote an organization’s mission and values.” Hanine
    • “Organizational performance management is the process of making sure
      that your company resources are being properly used in pursuit of company
      goals.” George
      N. Root III

    Those recurring activities are much of what leaders and managers inherently
    do in their organizations — some of them do it far better than others. The
    process is closely aligned with strategic management — the process of effectively
    implementing as well-designed strategic plan.

    General Guidelines for Implementing and
    Evaluating the Process

    There are certain guidelines that can ensure the success of any generic performance
    management process. Be sure to read and follow these guidelines closely, especially
    if this is your first implementation of a comprehensive performance management
    process. The guidelines also can be useful if you are trying to improve a process
    that you have already implemented.
    Management for any Application: Guidelines for Implementation and Evaluation

    Organizational Performance Planning Phase

    NOTE: Because of the predominance of the traditional approach
    to performance management, the following activities are organized according
    to that approach. However, early in the implementation, you should decide whether
    you will be using the traditional
    or the progressive
    or a combination of both.

    1. Review the organization’s preferred goals for the next year and, for each
    goal, specify preferred organizational results in terms of units of performance,
    that is, quantity, quality, cost or timeliness. These units provide ongoing
    measurements for the OPM to monitor as indications of the organization’s performance.
    For ideas about measurements, see Guidelines
    for Selecting Measurements
    One Sample Framework for Selecting Measurements

    • Organizational goals are usually determined during the Strategic
    • The strategic planning process also decides the best organizational strategies,
      including the best organizational
      and organizational
      needed to achieve the goals.
    • The units of performance for the organization might be specified in Action
      associated with each strategic goal. Action plans specify who is
      going to do what and by when.

    2. Ensure the organization’s action plans directly contribute to the organization’s
    goals. See Strategic
    Action Plans & Alignment

    3. Rank your preferred results. See Prioritizing
    Strategic Initiatives

    4. Identify key performance indicators that will suggest whether you have successfully
    achieved the goals. See How
    to Identify Performance Indicators of Success
    for guidelines and examples.

    5. For each key performance indicator, identify standards for evaluating how
    well the desired results were achieved, for example, “behind schedule”,
    “on schedule” or “ahead of schedule”.

    6. Integrate, align and reality check your action plans. See How
    to Finalize Your Action Plans – Integrate and Reality Check.

    7. Integrate the action plans throughout the organization. See How
    to Integrate Plans Throughout the Organization

    8. Document a Performance Plan — including the desired results, key performance
    indicators and standards. Some organizations might refer to this as a short-term
    (1-year) strategic plan or a capacity building plan. See Sample
    Capacity Building Plan

    (For an example of each of the above activities, including how the progressive
    approach might be used for each, see Performance
    Management for any Application: Performance Planning Phase
    . Where that description
    refers to a “domain”, substitute the term “organization”.)

    Organizational Performance Appraisal Phase

    The activities in this phase are much of what leaders and managers do during
    the year in an organization.

    9. Conduct ongoing monitoring of the progress of the key performance indicators
    and action plans. See Organizational
    and Basics
    of Monitoring, Evaluating and Deviating from the Strategic Plan

    10. Exchange ongoing feedback about performance. See Giving
    Feedback and Advice

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

    12. If performance meets the desired performance standard, then reward for
    performance, for example, letter of recognition, increased compensation and/or
    a promotion. See How
    to Reward Employee Performance

    (For an example of each of the above activities, including how the progressive
    approach might be used for each, see Performance
    Management for any Application: Performance Appraisal Phase
    . Where that
    description refers to a “domain”, substitute the term “organization”.)

    Organizational Development (Improvement)
    Planning Phase

    13. If performance does not meet the desired performance standards, then develop
    or update a Performance Development Plan to address the performance gap (see
    note 1 below.) See Development

    • If leaders decide that the organization needs to undergo a significant change
      in order to improve performance, then this is where Organizational
      is so useful.

    14. Repeat phases 9 to 13 until performance is acceptable or the standards
    are changed.

    Note 1: Inadequate performance does not always indicate a problem on the part
    of the organization. Performance standards may be unrealistic or the organization
    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.

    (For an example of each of the above activities, including how the progressive
    approach might be used for each, see Performance
    Management for any Application: Performance Development Phase
    . Where that
    description refers to a “domain”, substitute the term “organization”.)

    Suggested Additional Readings

    The Role of Strategic Evaluation in Nonprofits

    Basic Guide to Program Evaluation

    Assessment and Evaluation Tools

    Organizational Structures and Design

    Performance Management
    Group Performance

    Learn More in the Library’s Blogs Related to Organizational Performance

    In addition to the articles on this current page, also see the following blogs
    that have posts related to organizations. Scan down the blog’s page to see various
    posts. Also see the section “Recent Blog Posts” in the sidebar of
    the blog or click on “next” near the bottom of a post in the blog.
    The blog also links to numerous free related resources.

    Consulting and Organizational Development Blog

    Human Resources Blog

    Leadership Blog

    Project Management Blog

    Supervision Blog

    For the Category of Organizational Development:

    To round out your knowledge of this Library topic, you may
    want to review some related topics, available from the link below.
    Each of the related topics includes free, online resources.

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

    Related Library Topics

    Recommended Books