Clarity on terms 'Performance Management / Measurement'

Hi,

Hopefully the below will assist:

a) Performance Management is concerned with the key drivers that add value to a product or process and thus in tern attract and retain customers. An easy way of thinking about performance management is Critical Success Factors and how the variables contributing to the CSF can be managed

For example, a CSF could be – Efficient production process resulting in little waste and high quality products (indirectly resulting in customers receiving a superior product, therefore becoming a loyal customer)

A manager must then manage this CSF through control and improvement.

b) A Performance measurement directly relates to the above, in the sense that, how can this CSF be measured using KPI. – How can we quantify the success or failure.

For example, following on from the above, a Key Performance Indicator could be time taken to produce one unit OR level of waste material.

However, P5 is also concerned with Non Financial Measures so Balanced Scorecard or F&M Building blocks are examples of measuring non financial performance.

C) Performance management system is concerned with improving and enhancing current management processes to minimise failure or to achieve strategic goals. This links in with A.

In a nutshell, they are are the systems in an organisation by which the performance of an organisation is measured, controlled and improved.

For example, Value Based Management shows how much value a division or company is adding for shareholders through Economic Value Added. VBM Measures the value added which is compared to a benchmark (control – in this case investors minimum rate of return) and any improvements are implemented.

Let me know if this helps! 🙂

Hi mo993,
I like the way you explain….clear and concise.

Guess you had passed your P5.

I had failed for many times for P5. Any question on P5, can I approach you?