What is performance management?
Performance Management is the framework that tells an organisation how it is performing in all areas of its operation.
Meaningful performance reports should be produced regularly to track progress in terms of financial information and other key performance indicators (KPIs) specific to your business.
Every organisation needs to know how they are performing in all areas of the business – is your sales team letting opportunities slip through their fingers? Is your credit control department chasing overdue invoices promptly to maintain healthy cashflow? Are your employees being careless with company resources?
Think of performance management as a map. You may know where you want to go to but to get there you also need to know where you’re starting from!
What is the purpose of having a framework to measure performance?
Every organisation needs a properly structured framework to measure performance in the key areas that determine the success or failure of the business. These will vary from business to business but will typically cover sales, margins, costs, productivity and customer satisfaction. Targets for improvement can be set for the organisation as a whole or broken down by department, team or individual.
The benefits of organisation performance management:
- Improved productivity
- Making the most of finite resources
- Better customer service
- Increased revenue
What are performance reports?
Performance reports should show at a glance how the organisation is performing across all areas.
Reports should be:
- Viewed in context – How does your organisation’s performance compare with that of peers? Explore opportunities to benchmark performance within your sector.
- Timely – It is pointless reporting on January’s performance in April.
- Easy to understand – Information should be presented visually and jargon kept to the bare minimum.
- Linked to your strategic objectives
Bridgehouse Company Secretaries can help you improve performance management in your organisation by working alongside you to identify key indicators and establish a performance management structure.