Business performance management

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Organizational performance and its types Organizational Performance.jpg
Organizational performance and its types

Business performance management (BPM) (also known as corporate performance management (CPM) [2] enterprise performance management (EPM), [3] [4] 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 goals. BMP is associated with business process management, [5] a larger framework managing organizational processes.

Contents

It aims to measure and optimize the overall performance of an organization, specific departments, individual employees, or processes to manage particular tasks. [6] 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. [7] BPM can involve outlining the role of each individual in an organization in terms of functions and responsibilities. [8]

History

By 2017, 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. [9]

Definition and scope

New technology realizes corporate strategic outcomes and describes risk-management programs. [10]

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. [11] 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. [12]

Performance management aligns company goals with those of teams and employees to increase efficiency, productivity, and profitability. [13] Its guidelines stipulate the activities and outcomes by which employees and teams are evaluated during performance appraisal. [14] 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. [15] 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. [16] [17] A research institute may use data-driven, real-time PMS to deal with complex performance-management challenges for a country developing its agricultural sector. [18] [19]

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. [20]

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. [21] [22]

How it can fail

Employees managed by those with unclear expectations may erroneously think that they are performing well. Animal job interview.jpg
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. [23]

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. Performance improvement aims to close the gap between the two. [24]

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. [25]

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. [26] 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. [27]

Outcomes

According to Richard et al. (2009), organizational-performance metrics encompass three outcomes: [28]

Organizational effectiveness [29] is a similar term.

Technology

Business performance management requires large organizations to collect and report large volumes of data. Software vendors, particularly those offering 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. [30] Interest in BPM by the software community may be sales-driven. [31] [32]

See also

Related Research Articles

<span class="mw-page-title-main">Knowledge management</span> Process of creating, sharing, using and managing the knowledge and information of an organization

Knowledge management (KM) is the collection of methods relating to creating, sharing, using and managing the knowledge and information of an organization. It refers to a multidisciplinary approach to achieve organizational objectives by making the best use of knowledge.

Organizational learning is the process of creating, retaining, and transferring knowledge within an organization. An organization improves over time as it gains experience. From this experience, it is able to create knowledge. This knowledge is broad, covering any topic that could better an organization. Examples may include ways to increase production efficiency or to develop beneficial investor relations. Knowledge is created at four different units: individual, group, organizational, and inter organizational.

<span class="mw-page-title-main">Job satisfaction</span> Attitude of a person towards work

Job satisfaction, employee satisfaction or work satisfaction is a measure of workers' contentment with their job, whether they like the job or individual aspects or facets of jobs, such as nature of work or supervision. Job satisfaction can be measured in cognitive (evaluative), affective, and behavioral components. Researchers have also noted that job satisfaction measures vary in the extent to which they measure feelings about the job. or cognitions about the job.

<span class="mw-page-title-main">Performance indicator</span> Measurement that evaluates the success of an organization

A performance indicator or key performance indicator (KPI) is a type of performance measurement. KPIs evaluate the success of an organization or of a particular activity in which it engages. KPIs provide a focus for strategic and operational improvement, create an analytical basis for decision making and help focus attention on what matters most.

<span class="mw-page-title-main">Business analyst</span> Person who analyses and documents a business

A business analyst (BA) is a person who processes, interprets and documents business processes, products, services and software through analysis of data. The role of a business analyst is to ensure business efficiency increases through their knowledge of both IT and business function.

Competence is the set of demonstrable characteristics and skills that enable and improve the efficiency or performance of a job. Competency is a series of knowledge, abilities, skills, experiences and behaviors, which leads to effective performance in an individual's activities. Competency is measurable and can be developed through training.

<span class="mw-page-title-main">Performance measurement</span> Process of collecting, analyzing and/or reporting information regarding performance

Performance measurement is the process of collecting, analyzing and/or reporting information regarding the performance of an individual, group, organization, system or component.

Greenberg (1987) introduced the concept of organizational justice with regard to how an employee judges the behavior of the organization and the employee's resulting attitude and behaviour. For example, if a firm makes redundant half of the workers, an employee may feel a sense of injustice with a resulting change in attitude and a drop in productivity.

Knowledge sharing is an activity through which knowledge is exchanged among people, friends, peers, families, communities, or within or between organizations. It bridges the individual and organizational knowledge, improving the absorptive and innovation capacity and thus leading to sustained competitive advantage of companies as well as individuals. Knowledge sharing is part of the knowledge management process.

BSC SWOT, or the Balanced Scorecard SWOT analysis, was introduced in 2001, by Lennart Norberg and Terry Brown.

Organizational behavior management (OBM) is a subdiscipline of applied behavior analysis (ABA), which is the application of behavior analytic principles and contingency management techniques to change behavior in organizational settings. Through these principles and assessment of behavior, OBM seeks to analyze and employ antecedent, influencing actions of an individual before the action occurs, and consequence, what happens as a result of someone's actions, interventions which influence behaviors linked to the mission and key objectives of the organization and its workers. Such interventions have proven effective through research in improving common organizational areas including employee productivity, delivery of feedback, safety, and overall morale of said organization.

Talent management (TM) is the anticipation of required human capital for an organization and the planning to meet those needs. The field has been growing in significance and gaining interest among practitioners as well as in the scholarly debate over the past 10 years, particularly after McKinsey's 1997 research and the 2001 book on The War for Talent. Although much of the previous research focused on private companies and organizations, TM is now also found in public organizations.

Business process management (BPM) is the discipline in which people use various methods to discover, model, analyze, measure, improve, optimize, and automate business processes. Any combination of methods used to manage a company's business processes is BPM. Processes can be structured and repeatable or unstructured and variable. Though not required, enabling technologies are often used with BPM.

Market intelligence (MI) is gathering and analyzing information relevant to a company's market - trends, competitor and customer monitoring. It is a subtype of competitive intelligence (CI), which is data and information gathered by companies that provide continuous insight into market trends such as competitors' and customers' values and preferences.

Counterproductive work behavior (CWB) is employee's behavior that goes against the legitimate interests of an organization. This behavior can harm the organization, other people within it, and other people and organizations outside it, including employers, other employees, suppliers, clients, patients and citizens. It has been proposed that a person-by-environment interaction (the relationship between a person's psychological and physical capacities and the demands placed on those capacities by the person's social and physical environment.) can be utilized to explain a variety of counterproductive behaviors. For instance, an employee who is high on trait anger is more likely to respond to a stressful incident at work with CWB.

Human resource planning is a process that identifies current and future human resources needs for an organization to achieve its goals. Human resource planning should serve as a link between human resource management and the overall strategic plan of an organization. Ageing workers population in most western countries and growing demands for qualified workers in developing economies have underscored the importance of effective human resource planning.

In organizational theory, organizational analysis or industrial analysis is the process of reviewing the development, work environment, personnel, and operation of a business or another type of association. This review is often performed in response to crisis, but may also be carried out as part of a demonstration project, in the process of taking a program to scale, or in the course of regular operations. Conducting a periodic detailed organizational analysis can be a useful way for management to identify problems or inefficiencies that have arisen in the organization but have yet to be addressed, and develop strategies for resolving them.

Responsible Research and Innovation (RRI) is a term used by the European Union's Framework Programmes to describe scientific research and technological development processes that take into account effects and potential impacts on the environment and society. It gained visibility around the year 2010, arising from predecessors including "ELSA" studies prompted by the Human Genome Project. Various slightly different definitions of RRI emerged, but all of them agree that societal challenges should be a primary focus of scientific research, and moreover they agree upon the methods by which that goal should be achieved. RRI involves holding research to high ethical standards, ensuring gender equality in the scientific community, investing policy-makers with the responsibility to avoid harmful effects of innovation, engaging the communities affected by innovation and ensuring that they have the knowledge necessary to understand the implications by furthering science education and Open Access. Organizations that adopted the RRI terminology include the Engineering and Physical Sciences Research Council.

Workplace democracy is the application of democracy in various forms to the workplace, such as voting systems, debates, democratic structuring, due process, adversarial process, and systems of appeal. It can be implemented in a variety of ways, depending on the size, culture, and other variables of an organization.

Personal initiative (PI) is self-starting and proactive behavior that overcomes barriers to achieve a goal. The concept was developed by Michael Frese and coworkers in the 1990s.

References

  1. ↑ Mahmoudi, Amin; Javed, Saad Ahmed (2022). "Performance Evaluation of Construction Sub-contractors using Ordinal Priority Approach". Evaluation and Program Planning. 91: 102022. doi:10.1016/j.evalprogplan.2021.102022. ISSN   0149-7189. PMID   34736766. S2CID   239609916.
  2. ↑ "Introducing the CPM Suites Magic Quadrant", Lee Geishecker and Frank Buytendijk, 2 October 2002, www.gartner.com, M-17-4718
  3. ↑ Frolick, Mark N.; Ariyachandra, Thilini R. (Winter 2006). "Business performance management: one truth" (PDF). Information Systems Management. 23. www.ism-journal.com: 41–48. doi:10.1201/1078.10580530/45769.23.1.20061201/91771.5. S2CID   11317244. Archived from the original (PDF) on 2011-07-19. Retrieved 2010-02-21. Business Performance Management (BPM) [...] is also known and identified by other names, such as corporate performance management and enterprise performance management.
  4. ↑ Mojdeh, Sana (2005-12-20). Technology-enabled Business Performance Management: Concept, Framework, and Technology (PDF). 3rd International Management Conference. pp. 1–9. Archived from the original (PDF) on 2011-07-22. Retrieved 2010-02-21. 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'.
  5. ↑ vom Brocke, J. & Rosemann, M. (2010), Handbook on Business Process Management: Strategic Alignment, Governance, People, and Culture (International Handbooks on Information Systems). Berlin: Springer
  6. ↑ Harris, Hilary; Brewster, Chris; Sparrow, Paul (2003). International Human Resource Management. CIPD Publishing. ISBN   9780852929834.
  7. ↑ "Performance Management". U.S. Office of Personnel Management. Retrieved 2019-02-28.
  8. ↑ Hameed, Waseem (2020-11-12). "Performance Management".
  9. ↑ Van Decker, John E.; Rayner, Nigel; Iervolino, Christopher (October 31, 2017). "Back to Basics: The Refocusing of Corporate Performance Management". www.gartner.com. Gartner. G00341616. Retrieved 2019-04-16.
  10. ↑ Achterbergh, Jan; Vriens, Dirk (2010). "Organizational Structures Supporting Rich Survival". Organizations. Springer. pp. 351–378. doi:10.1007/978-3-642-14316-8_11. ISBN   978-3-642-14315-1 . Retrieved 17 March 2023.
  11. ↑ Mettler T, Rohner P (2009). Performance management in health care: The past, the present, and the future (PDF). International Conference Business Informatics. Vienna. pp. 699–708. Archived (PDF) from the original on 2022-10-09.
  12. ↑ Smith, Marisa; Bititci, Umit Sezer (2017-09-04). "Interplay between performance measurement and management, employee engagement and performance". International Journal of Operations & Production Management. 37 (9): 1207–1228. doi:10.1108/ijopm-06-2015-0313. ISSN   0144-3577.
  13. ↑ Zaffron, Logan, Steve, David (Feb 2009). Performance Management: The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life (1st ed.).{{cite book}}: CS1 maint: multiple names: authors list (link)
  14. ↑ "Performance". U.S. Office of Personnel Management. Retrieved 2019-02-28.
  15. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2021-06-01). "Role of Peripheral Analysis Methods in Adoption of Successful KPIs for a Research Institute Working Towards Commercial Agriculture". International Journal of Global Business and Competitiveness. 16 (1): 61–71. doi:10.1007/s42943-021-00021-z. ISSN   0976-1888. PMC   8039501 .
  16. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Seneviratne, Gamini (2022-12-31). "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". All Life. 15 (1): 220–233. doi: 10.1080/26895293.2022.2038280 . ISSN   2689-5293. S2CID   246761304.
  17. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith Krishantha (2021-01-01). "Role of key performance indicators on agile transformation of performance management in research institutes towards innovative commercial agriculture". Journal of Science and Technology Policy Management. 13 (2): 213–243. doi:10.1108/JSTPM-10-2020-0151. ISSN   2053-4620. S2CID   237685948.
  18. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R. (2022-05-23). ""Connected researches" in "smart lab bubble": A lifeline of techno-society space for commercial agriculture development in "new normal"". New Techno Humanities. 2: 79–91. doi: 10.1016/j.techum.2022.05.001 . ISSN   2664-3294. S2CID   249035865.
  19. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R.; Madhushani, K. B. (2022-08-22). "Intelligently driven performance management: an enabler of real-time research forecasting for innovative commercial agriculture". SN Social Sciences. 2 (9): 168. doi:10.1007/s43545-022-00484-8. ISSN   2662-9283. PMC   9395937 . PMID   36033638.
  20. ↑ Madden, Bartley J. (September 2014). Reconstructing Your Worldview. Learning What Works Inc. p. 99. ISBN   978-0988596931.
  21. ↑ Nielsen, Poul A. 2014. "Performance Management, Managerial Authority, and Public Service Performance." Journal of Public Administration Research and Theory. 24(2):431–458.
  22. ↑ Gerrish, Ed. 2015. "The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis." Public Administration Review 76(1):48–66.
  23. ↑ 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.
  24. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2022-08-10). "Single window performance management: a strategy for evaluation integrated research culture in the commercial agriculture sector". SN Business & Economics. 2 (9): 128. doi:10.1007/s43546-022-00297-0. ISSN   2662-9399. S2CID   251504791.
  25. ↑ US Office of Personnel Management, A Handbook for Measuring Employee Performance, published March 2018, accessed 26 October 2022
  26. ↑ 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
  27. ↑ Kakkar, Shiva; Dash, Sanket; Vohra, Neharika; Saha, Surajit (2020-04-23). "Engaging employees through effective performance management: an empirical examination". Benchmarking. 27 (5): 1843–1860. doi:10.1108/bij-10-2019-0440. ISSN   1463-5771. S2CID   219006172.
  28. ↑ Richard, Pierre J.; Devinney, Timothy M.; Yip, George S.; Johnson, Gerry (2009-02-06). "Measuring Organizational Performance: Towards Methodological Best Practice". Journal of Management. 35 (3). SAGE Publications: 718–804. doi:10.1177/0149206308330560. ISSN   0149-2063. S2CID   143585204.
  29. ↑ Upadhaya, Bedanand; Munir, Rahat; Blount, Yvette (2014). "Association between performance measurement systems and organisational effectiveness". International Journal of Operations & Production Management. 34 (7). Emerald: 853–875. doi:10.1108/ijopm-02-2013-0091. ISSN   0144-3577.
  30. ↑ BPM Mag, What is BPM? Archived December 12, 2006, at the Wayback Machine
  31. ↑ The Next Generation of Business Intelligence: Operational BI Archived 2009-08-02 at the Wayback Machine
  32. ↑ White, Colin (May 2005). "The Next Generation of Business Intelligence: Operational BI". Information Management Magazine. Archived from the original on 2011-07-22. Retrieved 2010-02-21. The biggest growth area in operational BI analysis is in the area of business performance management (BPM).

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