Overview

Performance Mananagement Tools

Performance management tools are specialized instruments that an organization, a department, a team or / and an individual needs to use, in order to develop and improve the level of performance reached. The effectiveness of these tools depends most on their fit within the broader perspective, such as the internal organisational system.

Implementation principles

There is no defined formula to design, develop and combine performance management tools in order to guarantee successful results and implementation. However, some aspects should be considered when choosing a specific tool for performance management:

Decisions making factors: define the position on competing priorities in performance management (recognizing the team vs. the individual; achieving results vs. demonstrating valued behaviors etc.)
Integration: choosing a tool should consider the fit with the strategy, structure and culture. The performance management tools should support and reinforce the strategy regarding the performance, rewards and recognition, future directions etc.
Communication of the performance culture: each tool has an important role in communicating and enabling the culture of performance desired.

Toolset:

The list of performance management tools presented bellow aims to assess the most common instruments, without having the expectations of being considered complete:

Performance management tool	Brief description	Level of implementation
KPIs	Instruments used in performance management that monitor the performance of key result areas of business activities, which are absolutely critical to the success and growth of the business. The development and use of the KPIs should form the basis for the analysis of an organization’s current performance, its future requirements and the improving strategies required for ongoing success (NHS Institute for Innovation and Improvement, 2010).	Strategic Individual
PIs, measures and metrics	Represent factors that tend to indicate the health, progress and/or success of a project, process or area of service delivery. They focus on resources and processes that are most likely to lead to successful outcomes and are usually short, focused, relevant, measurable, repeatable and consistent (smartKPIs.com, 2010).	Operational Individual
Scorecards	Represent repositories with all the KPIs, allowing visualization of the information and analysis, showing deviations and warnings to the managers. They are performance management instruments, displaying periodic snapshots of performance associated with an organization’s strategic objectives and plans (Wayne, 2006)	Strategic Individual
Dashboards	Represent repositories with PIs, measures or metrics, allowing visualization of the information and analysis at operational level, showing deviations and warnings to the middle management.	Operational
Tableau de Bord	Represents a management tool that contains a set of indicators related by causal links and relationships. Developing this tool implies selection, documentation and interpretation of these indicators.	Operational
Performance evaluations	Aim to assess and measure the performance achieved in a well defined frameworks, such as quarterly or annual reviews.	Strategic Individual
Data mining / visualization tools	Represent diverse tools used to support decision making process, by facilitating the process of data visualization and mining, usually in an interactive way. The visualization solutions, often software based nowadays, aim to instantly transform the data in valuable information for business decision makers.	Strategic Operational

References

NHS Institute for Innovation and Improvement (2010), Performance management, available at: http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_and_service_improvement_tools/performance_management.html (accessed 16 August 2010)
smartKPIs.com (2010), KPIs, KRIs, PIs, metrics and measures, available at: http://www.smartkpis.com/pages/context/info-i8.html (accessed 16 August 2010)
Wayne, W., E. (2006), Performance Dashboards, John Wiley & Son, NJ.