Business performance management refers to the methods a business uses to measure performance, communicate the results to all relevant parties, and improve based on those results. Performance management solutions may include automation, data integration, predictive analytics, financial planning, reporting, and more.
Performance is a broad term. It can include the performance of individual employees, as monitored by supervisors and HR. It can also refer to the performance of departments or to how an entire organization performs. The aim is to define objectives and milestones, develop processes to measure performance, and ensure all parties understand and buy into the goals and expectations that apply to them.
When applied to employees, performance management goes well beyond the traditional year-end reviews to provide continuous learning opportunities each day.
Performance management offers several benefits:
- Workflow optimization. Performance management tools help managers modify workflows and develop new processes to improve their operations and increase productivity.
- Coordinated goals. Performance management helps managers align what they expect from their staff with the organization’s overall goals.
- Improved communication. An ongoing process of regular check-ins encourages more frequent and meaningful communication between managers and employees and between department managers and executives.
- Accountability. When employees and managers know they’re being evaluated against well-defined standards and will be held accountable for results and mistakes, they’re motivated to succeed.
- Transparency. Clear expectations make for a smoother-running, more positive work environment with less stress, which leads to better staff retention.
- Reporting. Performance management systems can provide complete, automated reporting to help managers stay on course.
Different performance management software options have different sets of features. These may include an employee performance appraisal system designed to encourage ongoing real-time feedback and goal tracking, such as the one used in Trakstar. Or they may feature management of payroll and benefits as well as talent and general HR, such as cloud-based Namely.