Systems for Managing Organizational Performance


The approaches and processes that assist you in defining, measuring, and eventually achieving your strategy are collectively called organizational performance management. This is a word that is used to describe methodologies and procedures. The following are some of the most popular organizational performance management systems.

  • The Balanced Scorecard (BSC)

The Balanced Scorecard (BSC) is one of the most significant kinds of performance management systems that are now accessible, and there is a solid reason for this: 88% of BSC users think that the framework is very or very beneficial in helping them reach their objectives.

These are its primary constituents:

  • A high-level organizational goal that states what your company is seeking to achieve strategically and is segmented according to the four viewpoints makes up an organization’s objectives.
  • Measures, also known as key performance indicators (KPIs), are valuable for determining whether or not you successfully achieve your strategic goals.
  • Initiatives are essential action programs established to help you reach your goals. Initiatives are also referred to as projects in specific contexts.
  • Because you can relate the goals of individual departments to the company’s objectives as a whole, it is easier to achieve alignment across divisions and departments.
  • It necessitates a method of reporting that is organized. Developing a BSC relies on regular reviews of your strategy, yet, you can only perform such reviews successfully if your strategy is well-organized.
  • Management Oriented Toward Goals

Peter Drucker, a prominent management consultant, is credited with developing management by objectives (MBO), which may be implemented in various ways in performance management systems. In its most basic form, the process revolves around formulating several corporate goals, which are then used as pointers for each employee’s individual career goals.

The following are some of its more notable qualities:

  • There is no guarantee that one objective will lead to the achievement of another.
  • It is possible for leaders and workers to work together to develop objectives as part of a collaborative effort. The fundamental tenet of this approach is that encouraging engagement from workers will result in increased buy-in and will also assist in making the road toward achieving the goals more transparent.
  • The primary focus of MBO is on the objectives, while less attention is paid to the strategies that will be used to attain those goals.
  • Measures or initiatives are often the primary pillars on which organizations depend. The creation of a framework that makes a distinct distinction between projects and measurements is essential to the successful implementation of MBO. Because of the different ways, they operate, attempting to group them will surely lead to misunderstanding.
  • Budget-driven Business Plans

There are occasions when the budget rather than the plan serves as the driver of the performance management process. In this scenario, the organization’s “work plans” are connected to its total budget, and the money spent is allocated to the initiatives and programs that produce results. Some businesses succeed with this kind of performance management, even though it is not as widespread in usage. The following are some of its more notable qualities:

  • It is possible to categorize income sources and costs, enabling executives to quickly see business areas that need cost-cutting or may provide investment opportunities.
  • It is possible that this will encompass both existing initiatives and brand-new ones.
  • It is distinct from the other alternatives, which are coordinated by a strategy department since it is driven by money rather than strategy.
  • The finance team will typically start the development process by presenting the spending from the previous year to a department and then asking the department to list the activities they hope to accomplish within the following year without changing the budget. 


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