Organizational performance management systems

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					Organizational performance management systems

This article highlights a study that deals with boardroom perspectives on the performance
management systems and culture of their organizations. Research data to form this article
is based on the views of 625 directors who sit on 79 different Australian and New
Zealand boards.

The Global Financial Crisis provides organizations with a good opportunity to recalibrate
their thinking around what is important in terms of performance management systems
and culture. Boards must provide leadership and direction in relation to these very
important issues and firm oversight of setting review processes.

Our study of the perceptions of board members has revealed that boards have a long way
to go in ensuring high standards of organization performance are met.

3 key findings:

   1. many boards need to focus more on lifting the performance bar in their
      organizations with only half (50%) of the directors agreeing their board
      encourages a strong culture of organization performance and less than half (49%)
      agreeing that their board takes appropriate action when performance measures are
      not met
   2. while 65% of directors agree that their board and management have a shared
      commitment to the actual measures used for organization performance, no more
      directors agree because inappropriate performance measures, or lack of clarity,
      can cause significant organizational tensions
   3. the largest variation in views among demographic groups is in the age category
      with directors under 45 years being consistently more critical or demanding
      across the areas surveyed than those directors over 64 years

Tips to encourage a strong performance culture

      have clarity of and agreement with what constitutes appropriate performance
      set challenging goals and the celebrate good performance
      have an effective performance management system throughout the organisation
       with agreed accountabilities
      act appropriately when performance measures are not met.

Tips on what makes a good performance measure
      includes both financial and non-financial measures over the short, medium and
       long term
      is aligned with the organisation's strategic and business plans
      is appropriately cascaded down through each level of management.

Tips on what makes an effective performance management system

      includes KPIs that are aligned to the organisation's strategy and business plans
       and which are appropriately cascaded down through the organisation
      appropriately encourages, recognises and rewards good individual performance
      includes appropriate team and organisation KPIs and has an appropriate balance
       of financial and non-financial KPIs with a mix of leading and lagging orientations
      is transparent, easy to use and its use timed appropriately during the annual cycle
      is used constructively with a view to ongoing individual development. : Over 200 ebooks, templates, forms for
performance appraisal.

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