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Performance is the actions of an individual, group, or organization that result in something that the recipient values.
In an organizational context, performance is the combination of work activity and results accomplished by an individual, a team, or the entire organization. We can define results as deliberate actions performed by one entity that create value or satisfy requirements for another entity.
Performance of an organization is affected at the following 4 levels:
- Employee level
- Job level
- Workplace level
- Global level
Performance Improvement is the process of identifying and implementing strategies and measures that increase the efficiency, efficacy, and output of the individual, team, or organization responsible for specific activities.
The standard procedure for improving Performance is to concentrate on the problem, opportunity, or method.
Some models, on the other hand, advocate commencing with results or objectives in order to enhance Performance. Included among the questions that must be asked when using the final objective as the starting point are:
- What is the organization's desired outcome: cost reduction, increased income, or cycle time reduction?
- What should have changed after the required action was taken?
This approach to measuring performance entails evaluating both aspects, i.e., the work activities completed by the individual or team and the outcomes of those activities.
Work activity consists of the duties and responsibilities assigned to an individual or group, as well as the skills and knowledge required to complete those tasks. Various methods, such as Performance Reviews, Job Analyses, and Time and Motion Studies, can be used to monitor and quantify work activities.
Examples of definite outcomes include customer satisfaction ratings and sales revenue. Intangible outcomes may include enhanced team morale and innovation.
Improving Performance can take one of the following 3 forms, given that Performance is the combination of actions and outcomes:
- Cost reduction for an activity
- Making results more valuable
- Accomplishing both
Various models and approaches, each with their own distinct perspective and methodology, have been utilized to accomplish Performance Improvement. The 2 most prevalent models employed for Performance Improvement are:
- Performance System Model
- Performance Drivers Model
Let's delve a bit deeply into the specifics of these 2 models.
Performance System
The Performance System Model accepts that Performance Improvement is not a one-time occurrence, but rather a continuous process requiring ongoing evaluation and refinement.
This model's greatest advantage is its adaptability, as it can be applied to a wide variety of organizations and industries and modified to meet the specific requirements of each organization.
The model emphasizes the significance of feedback mechanisms to ensure that Performance Improvement efforts are proceeding as planned and producing the intended outcomes. In addition, it emphasizes the significance of aligning elements to accomplish organizational objectives. Performance System Model identifies 8 elements that require alignment:
- Receiving System
- Results
- Outputs
- Processes
- Inputs
- Conditions or Business Environment
- Value Feedback
- Performance Feedback
Performance System Model involves 3 key phases:
- Input
- Process
- Output
Performance Drivers
The Performance Drivers Model is a framework for determining and enhancing the factors that contribute to organizational or individual performance.
This model identifies 6 factors, 3 internal and 3 external that influence performance. Factors internal to the organization include information, resources, and incentives. External factors include skills, knowledge, and motives.
Both internal and external factors contain additional sub-factors that play a role.
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Performance Management (also known as Strategic Performance Management, Performance Measurement, Business Performance Management, Enterprise Performance Management, or Corporate Performance Management) is a strategic management approach for monitoring how a business is performing. It describes the methodologies, metrics, processes, systems, and software that are used for monitoring and managing the business performance of an organization.
As Peter Drucker famously said, "If you can't measure it, you can't improve it."
Having a structured and robust Strategic Performance Management system (e.g. the Balanced Scorecard) is critical to the sustainable success of any organization; and affects all areas of our organization.
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