Performance Management: What It Is and How To Optimize It?

Today as never before, one of the main challenges of every company is the management of its human resources : from selection to training, up to the assessment of skills and Performance Management. In fact, regularly carrying out an evaluation analysis of one’s employees helps to evaluate how and to what extent their work is helping the company to achieve its objectives.

From this point of view, performance management is essential to recognize the strengths and weaknesses of its internal resources, as well as to define effective strategies for their growth. In this article, we will therefore explain what performance management is and how it works and provide some useful tips to get the most from it.

Performance Management :What It Is

Performance management is a set of activities and tools aimed at monitoring and evaluating the work of employees and ensuring that it is aligned with the strategic objectives of the company .

This process therefore makes it possible to:

  • establish individual and team goals
  • performance planning
  • review and evaluate progress
  • receive and / or give feedback
  • ensure that each employee has all the skills necessary to achieve the objectives set

What is business performance management?

Business performance management, or CPM, is a practice that involves evaluating a company’s financial and operational performance and putting processes in place to improve strategic decisions made by the organization’s managers and executives.

It is usually undertaken to help the company achieve a certain goal. The way in which business performance management is practiced may vary by company, but usually includes the introduction of tools that enable management to set strategic goals, analyze overall business performance, manage performance and monitor the accuracy of the reports.

The quality of decisions made by organizational leaders can have a significant impact on the results of operations.

For this reason, the use of business performance management can be helpful in facilitating better decision making. Practice can often improve the execution of the strategy used by the organization and provide a basis for measuring and monitoring the quantitative results of strategic decision making.

The specific business performance tools used by each organization will vary according to the needs of the organization and the external environment in which the organization operates; the tools are typically driven by technology that allows for an analytical review of the company’s performance.

Business performance often depends on collecting and analyzing significant amounts of performance data, so there are many software programs available for this specific purpose. It is possible to incorporate performance practices without these tools, but it is usually more difficult.

The use of proactive strategies for monitoring and evaluating organizational performance is critical to the ability of a performance  process to provide managers and executives with support for decision-making and strategic development.

Proactive strategies involve essential elements such as defining key performance indicators (KPIs) in operations. KPIs are typically used by the organization to monitor important performance areas. When changes are seen in these indicators, leaders can proactively respond before significant problems arise for the organization.

The ability of leaders to implement business performance  across all departments of the organization is also relevant to the success of the practice. Cross-functional implementation is needed to help ensure that business units in the organization are focused on similar goals and that they use metrics and measures relevant to other departments in the organization.

Synthesis of departmental activities through business performance can enable executives to comprehensively assess organizational performance, stimulating transparency and flexibility of operations.


The comprehensive and consistent use of a performance process can often offer numerous benefits to an organization, including improving reporting accuracy, gaining better control of operations, and greater flexibility in decision making.

The process can also increase transparency for more efficient organizational development. Real-time monitoring and reporting of results can give managers greater control over their departments as well.

By clearly defining business goals and the process by which those goals can be achieved, business performance  can help guide a business. Success for the organization, however,

requires managers and executives to use data acquired through performance management tools to improve processes and operations. Failure to make changes or improvements can create additional challenges for the organization and eliminate the benefits that can be achieved.

Leave a Comment