Management Systems has developed a powerful, proven methodology with unique features for performance management that has been used by literally hundreds of organizations to grow successfully and profitably over the long term. An organization's “Performance Management System” is a set of mechanisms (both processes and techniques) designed to increase the probability that people will behave in ways that lead to the attainment of the organization's objectives. The Management Systems’ performance management system model has seven components that must be effectively designed, managed and linked:
Key Result Areas (from the Strategic Plan or individual Key Result Area-Based Role Descriptions) - Areas of performance essential to the organization's or the individual position-holder’s success.
Objectives (from the Strategic Plan) - Broad statements of what needs to be achieved in each Key Result Area.
Goals (from the Strategic Plan or individual performance plan) - Specific, measurable, time-dated performance targets to be achieved. Each Objective will have one or more Goals.
Measurement – Methods, procedures, and tools used to assess performance (i.e., Profit measurement, Monetary measurement, Non-Monetary measurement).
Progress Review – Information about how effectively the organization, department, or individual is performing relative to a goal.
Performance Evaluation – Systematic evaluation at the end of the planning period of performance against Goals by Key Result Area. Typically serves as the basis for future Goal setting.
Rewards – Positive reinforcers for performance against Goals.
Each of these seven components needs to appropriately designed and all seven need to be “linked” in a system as shown below:
Management Systems’ Performance Management System
The Management Systems framework for Performance Management is further explained in several of our books and articles (see Publications) including Eric Flamholtz’s and Yvonne Randle’s book, Growing Pains and Eric Flamholtz’s book, Effective Management Control: Theory and Practice.