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Performance Improvement

Editor's Note: Take a look at our featured best practice, Objectives and Key Results (OKR) (23-slide PowerPoint presentation). Successful organizations are using Objectives and Key Results (OKR) now. OKRs are efficient way to track company and team goals and measure their progress. It helps every organization's success by cutting out unimportant goals and focusing on what truly is important within the organization. OKR [read more]

Also, if you are interested in becoming an expert on Performance Management, take a look at Flevy's Performance Management Frameworks offering here. This is a curated collection of best practice frameworks based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. By learning and applying these concepts, you can you stay ahead of the curve. Full details here.

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Performance is a set of actions taken by an individual, a group, or an organization that result in something that the recipient values.

Performance, in an organizational context, can be defined as the combination of work activity and results achieved by an individual, a team, or the organization as a whole.  We can define results as deliberate actions taken by one entity that create value or fulfill requirements for the entity benefiting from those actions.

An organization’s Performance is affected at the following 4 levels:

  1. Employee level
  2. Job level
  3. Workplace level
  4. Global level

Performance Improvement consists of the process of ascertaining and implementing strategies and measures that enhance the efficiency, effectiveness, and output of the person, team, or organization that undertakes particular activities.

The usual approach to enhancing Performance is to focus on the problem, opportunity, or method.

Some models, however, suggest taking results or goals as the starting point in order to improve Performance.  Questions that need asking when taking the end goal as the 1st step include:

  • What is the result the organization wants—cost reduction, raised income, or a reduction in cycle time?
  • What should have changed after what was required was executed?

Measuring Performance through this approach consists of evaluating both aspects, i.e., the work activities accomplished by the individual or team and the results attained from those activities.

Work activity means the tasks and responsibilities given to an individual or team; it also comprises the skills and knowledge necessary to undertake those tasks.  Work activities can be monitored and measured via different methods, for example, Performance Reviews, Job Analyses, and Time and Motion Studies.

Results can be definite, e.g., customer satisfaction ratings or sales revenue.  Results may be intangible, such as better team morale or improved Innovation.

Since Performance is activity plus results, improving Performance may take one of the following 3 forms:

  1. Reduction in the cost of activity
  2. Making results more valuable
  3. Accomplishing both

Performance Improvement has been achieved through the use of various models and approaches, each with its own unique perspective and methodology.  The 2 models that are more commonly employed for Performance Improvement include:

  1. Performance System Model
  2. Performance Drivers Model

Let us delve a little deeper into some of the details of these 2 models.

Performance System

Performance System Model recognizes that Performance Improvement is not a one-time event but a continuous process that requires ongoing evaluation and refinement.

The strength of this model is its flexibility, as it can be applied to a wide range of organizations and industries, and can be tailored to fit the specific needs of each organization.

The model emphasizes the importance of feedback mechanisms to ensure that Performance Improvement efforts are on track and achieving the desired results.  It also stresses the importance of aligning elements to achieve organizational goals.  Performance System Model recognizes the following 8 elements that need alignment:

  1. Receiving System
  2. Results
  3. Outputs
  4. Processes
  5. Inputs
  6. Conditions or Business Environment
  7. Value Feedback
  8. Performance Feedback

Performance System Model involves 3 key phases:

  1. Input
  2. Process
  3. Output

Performance Drivers

Performance Drivers Model is a framework used for identifying and improving the factors that contribute to organizational or individual Performance.

As per this model, 6 factors affect Performance, bifurcated as internal or external.  Internal factors include information, resources, and incentives.  External factors are skills and knowledge, capability, and motives.

Both internal and external factors have further sub-factors that play their part.

Interested in learning more about Performance Improvement?  You can download an editable PowerPoint presentation on Performance Improvement here on the Flevy documents marketplace.

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For even more best practices available on Flevy, have a look at our top 100 lists:

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Elevate your team's performance and strategy execution to new heights with the Performance Scorecard Framework, crafted by former strategy consultants from elite firms such as BCG and EY. This unique tool combines the strengths of the Balanced Scorecard with an exclusive proprietary [read more]

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Gain the knowledge and develop the expertise to become an expert in Performance Management. Our frameworks are based on the thought leadership of leading consulting firms, academics, and recognized subject matter experts. Click here for full details.

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.

Learn about our Performance Management Best Practice Frameworks here.

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About Mark Bridges

Mark Bridges is a Senior Director of Strategy at Flevy. Flevy is your go-to resource for best practices in business management, covering management topics from Strategic Planning to Operational Excellence to Digital Transformation (view full list here). Learn how the Fortune 100 and global consulting firms do it. Improve the growth and efficiency of your organization by leveraging Flevy's library of best practice methodologies and templates. Prior to Flevy, Mark worked as an Associate at McKinsey & Co. and holds an MBA from the Booth School of Business at the University of Chicago. You can connect with Mark on LinkedIn here.

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