Question

how does performance management relate to an organization s business model

Answer 1

The first step is to set targets that reflect the strategy of the company for each area of the company. You're the one who decides on this if you're in charge. If you are in HR, you may need to have them clarified for you by the board or senior management team. Set one or more targets that fit with the overall business strategy for each operational or departmental head. For example, you might want the marketing manager to hit certain customer retention and growth rates; the sales manager or business manager to reach certain sales volumes or per-customer price levels; buying to minimize their spending by a specific amount, etc.

Most administrators are guilty of treating box-ticking formalities as performance reviews. To make the alignment of goals and business strategy truly meaningful, however, the entire process of monitoring, reviewing, evaluating and feedback needs to occur frequently. Consider it normal to occur daily, weekly, monthly and quarterly inside the business for analysis and assessment–not just once a year. It can help with daily contact between managers and employees, as well as more comprehensive weekly and monthly reports.

Managers and employees frequently dislike the appraisal process. Having communication starts from the top at all grades. Getting passionate about performance management by the board and senior management makes it less of an awkward, HR-enforced job. The system is more readily accepted and respected by the staff with senior management on board. When employees see the connection between what they do on a day-to-day basis and what the company aims to achieve, then your company will run more effectively and efficiently.