Definition and Introduction
Performance management is the process which focuses on achieving targets and goals in an efficient and effective manner. This process aims at enhancing organizational effectiveness by improving individual performances of employees, department, or processing.
An advantage of this process is that it helps to reconcile personal goals of all employees with the organizational targets and thus improving profits and productivity. This process can be adopted on organizational as well as departmental level.
For performance management, a spreadsheet can be used very effectively but performance management applications are also available and are more reliable. A manually created spreadsheet may lack a few disciplines whereas an application is a complete package covering all aspects like sales benefits, operation efficiency, progress tracking.
Performance management can be very beneficial in achievement of goals and targets of an organization. The long lasting benefits of performance management include:
- Financial growth
As far as financial growth is concerned there could be many related factors which could be impacted by adopting this process like increased sales, reduction in cost and expenses, avoid project overruns and decrease in time for creating strategic changes.
- Motivated Employees
Some factors in Performance management which may include optimizing incentive plans for employees who achieve their targets, employee better understand their contribution towards organizational growth, transparent process, bonus payments and professional development program will help motivation of employees to perform better.
- Better Control and Management
A distinguished advantage of performance management is that it can be used for improved management control. It will not only develop better response to management needs but also help audit, simplify communication of strategic goals and improved documentation process.
For growth of a business it is highly recommendable to follow performance management process. This is a completely beneficial process which has no negative points. A company’s growth rate may enormously boost as a result of adopting performance management.
- Debt ratios
- Liquidity ratios
- Profitability ratios
- Asset management ratios
- Cash Flow Indicator Ratios
- Market value ratios
- Financial analysis
- Business Terms
- Financial education
- International Financial Reporting Standards (EU)
- IFRS Interpretations (EU)
- Financial software
Most WantedFinancial Terms
- Most Important Financial Ratios
- Debt-to-Equity Ratio
- Financial Leverage
- Current Ratio
- Interest Coverage Ratio (ICR)
- Solvency Ratio
- Break-even Point
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