Business performance management

Short description: Processes to bring output into alignment with goals

"Performance management" redirects here. For performance management of software in real time or forensically, see software performance management.

Business Performance ManagementDiscipline Overview

Other names| Corporate Performance Management (CPM), Enterprise Performance Management (EPM)
Core objective| Optimization of business results and alignment with strategy
Methodologies
Frameworks| Balanced Scorecard, Six Sigma, OKR, Total Quality Management
Key Metrics| KPIs, ROI, ROE
Technical Components
Tools| Business intelligence, Data warehousing, Data mining
Cycle| Plan, Act, Monitor, Analyze
Organizational performance and its types[1] Business administration

Management of a business

Accounting

* Management accounting
* Financial accounting
* Financial audit

Business entities

* Corporate group
* Conglomerate
* Holding company
* Cooperative
* Corporation
* Joint-stock company
* Limited liability company
* Partnership
* Privately held company
* Sole proprietorship
* State-owned enterprise

Corporate governance

* Annual general meeting
* Board of directors
* Supervisory board
* Advisory board
* Audit committee

Corporate law

* Commercial law
* Constitutional documents
* Contract
* Corporate crime
* Corporate liability
* Insolvency law
* International trade law
* Mergers and acquisitions

Corporate title

* Chairman
* Chief business officer/Chief brand officer
* Chief executive officer/Chief operating officer
* Chief financial officer
* Chief human resources officer
* Chief information officer/Chief marketing officer
* Chief product officer/Chief technology officer

Economics

* Commodity
* Public economics
* Labour economics
* Development economics
* International economics
* Mixed economy
* Planned economy
* Econometrics
* Environmental economics
* Open economy
* Market economy
* Knowledge economy
* Microeconomics
* Macroeconomics
* Economic development
* Economic statistics

Finance

* Financial statement
* Insurance
* Factoring
* Cash conversion cycle
* Insider dealing
* Capital budgeting
* Commercial bank
* Derivative
* Financial statement analysis
* Financial risk
* Public finance
* Corporate finance
* Managerial finance
* International finance
* Liquidation
* Stock market
* Financial market
* Tax
* Financial institution
* Working capital
* Venture capital

Types of management

* Asset
* Brand
* Business intelligence
* Business development
* Capacity
* Change
* innovation
* Commercial
* marketing
* Communications
* Configuration
* Conflict
* Content
* Customer relationship
* Distributed
* Earned value
* Electronic business
* Enterprise resource planning
* management information system
* Financial
* Human resource
* development
* Incident
* Integrated
* Knowledge
* Materials
* Network
* administrator
* Office
* Operations
* services
* Performance
* Power
* Problem
* Process
* Product life-cycle
* Product
* Project
* Quality
* Records
* Resource
* Risk
* crisis
* Sales
* Security
* Service
* Strategic
* Supply chain
* Systems
* administrator
* Talent
* Technology

Organization

* Architecture
* Behavior
* Communication
* Culture
* Conflict
* Development
* Engineering
* Hierarchy
* Patterns
* Space
* Structure

Trade

* Business analysis
* Business ethics
* Business plan
* Business judgment rule
* Consumer behaviour
* Business operations
* International business
* Business model
* International trade
* Business process
* Business statistics

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Business performance management (BPM) (also known as corporate performance management (CPM)[2] enterprise performance management (EPM),[3][4]) is a management approach which encompasses a set of processes and analytical tools to ensure that a business organization's activities and output are aligned with its goals. BPM is associated with business process management,[5] a larger framework managing organizational processes.

It aims to measure and optimize the overall performance of an organization, specific departments, individual employees, or processes to manage particular tasks.[6] Performance standards are set by senior leadership and task owners which may include expectations for job duties, timely feedback and coaching, evaluating employee performance and behavior against desired outcomes, and implementing reward systems.[7] BPM can involve outlining the role of each individual in an organization in terms of functions and responsibilities.[8]

## Contents

* 1 History
* 2 Definition and scope
* 3 Application
* 4 Public-sector effects
* 5 How it can fail
* 6 Organizational development
* 7 Design and implementation
* 7.1 Outcomes
* 8 Technology
* 9 See also
* 10 References
* 11 Further reading
* 12 External links

## History

By 2017, Gartner had reclassified CPM as "financial planning and analysis" (FP&A) and "financial close" to reflect an increased focus on planning and the emergence of new solutions for financial close management.[9][10]

Following the 2017 reclassification, the market transitioned from monolithic on-premises suites toward cloud-based "Best-of-Breed" solutions, leading Gartner to officially retire the "Corporate Performance Management" (CPM) Magic Quadrant in 2018 in favor of two distinct categories: Cloud Financial Planning and Analysis (FP&A) and Cloud Financial Close. [11]

In 2020, this evolution continued with the introduction of Extended Planning and Analysis (xP&A), a framework designed to integrate financial planning with operational data from departments such as sales, human resources, and supply chain into a single, unified planning environment.[12]

## Definition and scope

New technology realizes corporate strategic outcomes and describes risk-management programs.[13]

## Application

Performance management principles are commonly applied in the workplace but can also be used in other settings where individuals interact with their environment to achieve specific outcomes, such as healthcare.[14] The effective implementation of performance management is crucial for maximizing team potential and enhancing daily employee performance.. It must not encourage internal competition, but teamwork, cooperation, and trust.[15]

Performance management aligns company goals with those of teams and employees to increase efficiency, productivity, and profitability.[16] Its guidelines stipulate the activities and outcomes by which employees and teams are evaluated during performance appraisal.[17] Many types of organizations use performance management systems (PMS) to evaluate themselves according to their targets, objectives, and goals; a research institute may use PMS to evaluate its success in reaching development targets.[18] Complex performance drivers such as the societal contribution of research may be evaluated with other performance drivers, such as research commercialization and collaborations, in sectors like commercial agriculture.[19][20] A research institute may implement data-driven, real-time PMS to address complex performance management challenges in a country developing its agricultural sector..[21][22]

Werner Erhard, Michael C. Jensen, and their colleagues developed a new approach to improving performance in organizations. Their work emphasizes how constraints imposed by one's worldview can impede cognitive abilities, and explores the source of performance which is inaccessible by cause-and-effect analysis. They say that a person's performance correlates with their work situation, and language (including what is said and unsaid in conversations) plays a major role. Performance is more likely to be improved when management understands how employees perceive the world and implementing changes which are compatible with that worldview.[23]

## Public-sector effects

In the public sector, the effects of performance-management systems have ranged from positive to negative; this suggests that differences among systems and the context in which they are implemented affect their success or failure.[24][25]

## How it can fail

Employees managed by those with unclear expectations may erroneously think that they are performing well.

Employees who question the fairness of a performance-management system or are overly competitive will affect its effectiveness; those who do not feel adequately rewarded become disgruntled with the process. Without proper system planning, employees may view it as mandating compliance.[26]

## Organizational development

In organizational development (OD), performance can be thought of as actual versus desired results; where actual results fall short of those desired is the performance-improvement zone. Performance improvement aims to close the gap between the two.[27]

Other organizational-development definitions differ slightly. According to the U.S. Office of Personnel Management (OPM), performance management is a system or process in which work is planned and expectations are set; performance of the work is monitored; staff ability to perform is developed; performance is rated and the ratings summarized, and top performance is rewarded.[28]

## Design and implementation

An organization-wide 360-degree feedback process integrated into the organization's culture can be a powerful tool for communicating and instituting change, rapidly touching all members of the organization when new markets, strategies, values and structures are introduced into the system.[29] Each year, companies spend considerable money on their performance-management systems. For performance management to succeed, businesses must continue to adapt their system to correct current deficiencies. Some aspects, such as goal setting or performance bonuses, may resonate more with employees than others.[30]

### Outcomes

According to Richard et al. (2009), organizational-performance metrics encompass three outcomes:[31]

* Financial performance, such as profits, return on assets, and return on investment
* Product market performance, such as sales and market share
* Total shareholder return, economic value added, and similar

Organizational effectiveness[32] is a similar term.

## Technology

Business performance management requires large organizations to collect and report large volumes of data. Software vendors, particularly those offering business intelligence tools, offer products to assist in this process. BPM is often incorrectly understood as relying on software to work, and many definitions suggest software as essential to the approach.[33] Interest in BPM by the software community may be sales-driven.[34][35]

## See also

* Behavioral systems analysis
* Data and information visualization
* Electronic performance support systems
* Executive information systems
* Integrated business planning
* IT performance management
* List of management topics
* Operational performance management
* Organizational behavior management
* Organizational engineering
* PDCA
* Performance measurement
* Rosabeth Moss Kanter
* Vitality curve (a.k.a. stack ranking)
* Strategy Markup Language and particularly StratML Part 2, Performance Plans and Reports

## References

1. ↑ Mahmoudi, Amin; Javed, Saad Ahmed (2022). "Performance Evaluation of Construction Sub-contractors using Ordinal Priority Approach". Evaluation and Program Planning 91. doi:10.1016/j.evalprogplan.2021.102022. ISSN 0149-7189. PMID 34736766. https://www.sciencedirect.com/science/article/abs/pii/S0149718921001178.
2. ↑ "Introducing the CPM Suites Magic Quadrant", Lee Geishecker and Frank Buytendijk, 2 October 2002, www.gartner.com, M-17-4718
3. ↑ Frolick, Mark N.; Ariyachandra, Thilini R. (Winter 2006). "Business performance management: one truth". Information Systems Management (www.ism-journal.com) 23: 41–48. doi:10.1201/1078.10580530/45769.23.1.20061201/91771.5. http://snyfarvu.farmingdale.edu/~schoensr/bpm.pdf. Retrieved 2010-02-21. "Business Performance Management (BPM) [...] is also known and identified by other names, such as corporate performance management and enterprise performance management.".
4. ↑ Mojdeh, Sana (2005-12-20). "Technology-enabled Business Performance Management: Concept, Framework, and Technology". 3rd International Management Conference. pp. 1–9. http://www.mbaforum.ir/download/335_Full_sanamojdeh.pdf. Retrieved 2010-02-21. "Confusion also arises because industry experts can not agree what to call BPM, let alone how to define it, META Group and IDC use the term 'Business Performance Management', Gartner Group prefers 'Corporate Performance Management', and others favor 'Enterprise Performance Management'."
5. ↑ vom Brocke, J. & Rosemann, M. (2010), Handbook on Business Process Management: Strategic Alignment, Governance, People, and Culture (International Handbooks on Information Systems). Berlin: Springer
6. ↑ Harris, Hilary; Brewster, Chris; Sparrow, Paul (2003) (in en). International Human Resource Management. CIPD Publishing. ISBN 978-0-85292-983-4. https://books.google.com/books?id=s3WpPyiz3IIC.
7. ↑ "Performance Management". https://www.opm.gov/policy-data-oversight/performance-management/.
8. ↑ Hameed, Waseem (2020-11-12). "Performance Management". https://www.academia.edu/42049818.
9. ↑ Van Decker, John E.; Rayner, Nigel; Iervolino, Christopher (October 31, 2017). "Back to Basics: The Refocusing of Corporate Performance Management". Gartner. https://www.gartner.com/doc/3823164/basics-refocusing-corporate-performance-management.
10. ↑ "What is FP&A?" (in en). https://www.oracle.com/apac/performance-management/planning/what-is-fp-and-a/.
11. ↑ "Time to retire the corporate performance management concept" (in en). 2017-12-21. https://www.accountingtoday.com/opinion/time-to-retire-the-cpm-concept.
12. ↑ "What is Extended Planning and Analysis (xP&A)? | IBM" (in en). 2025-11-26. https://www.ibm.com/think/topics/extended-planning-analysis.
13. ↑ Achterbergh, Jan; Vriens, Dirk (2010). "Organizational Structures Supporting Rich Survival". Organizations. Springer. pp. 351–378. doi:10.1007/978-3-642-14316-8_11. ISBN 978-3-642-14315-1. https://link.springer.com/chapter/10.1007/978-3-642-14316-8_11. Retrieved 17 March 2023.
14. ↑ "Performance management in health care: The past, the present, and the future". International Conference Business Informatics. Vienna. 2009. pp. 699–708. https://www.alexandria.unisg.ch/214579/1/WI2009.pdf.
15. ↑ Smith, Marisa; Bititci, Umit Sezer (2017-09-04). "Interplay between performance measurement and management, employee engagement and performance". International Journal of Operations & Production Management 37 (9): 1207–1228. doi:10.1108/ijopm-06-2015-0313. ISSN 0144-3577.
16. ↑ Zaffron, Logan, Steve, David (Feb 2009). Performance Management: The Three Laws of Performance: Rewriting the Future of Your Organization and Your Life (1st ed.).
17. ↑ "Performance". https://www.opm.gov/policy-data-oversight/senior-executive-service/performance/.
18. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2021-06-01). "Role of Peripheral Analysis Methods in Adoption of Successful KPIs for a Research Institute Working Towards Commercial Agriculture" (in en). International Journal of Global Business and Competitiveness 16 (1): 61–71. doi:10.1007/s42943-021-00021-z. ISSN 0976-1888.
19. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Seneviratne, Gamini (2022-12-31). "Probing into the concept of 'research for society' to utilize as a strategy to synergize flexibility of a research institute working on eco-friendly commercial agriculture". All Life 15 (1): 220–233. doi:10.1080/26895293.2022.2038280. ISSN 2689-5293.
20. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith Krishantha (2021-01-01). "Role of key performance indicators on agile transformation of performance management in research institutes towards innovative commercial agriculture". Journal of Science and Technology Policy Management 13 (2): 213–243. doi:10.1108/JSTPM-10-2020-0151. ISSN 2053-4620.
21. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R. (2022-05-23). ""Connected researches" in "smart lab bubble": A lifeline of techno-society space for commercial agriculture development in "new normal"" (in en). New Techno Humanities 2: 79–91. doi:10.1016/j.techum.2022.05.001. ISSN 2664-3294.
22. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K.; Kodituwakku, Saluka R.; Madhushani, K. B. (2022-08-22). "Intelligently driven performance management: an enabler of real-time research forecasting for innovative commercial agriculture" (in en). SN Social Sciences 2 (9): 168. doi:10.1007/s43545-022-00484-8. ISSN 2662-9283. PMID 36033638.
23. ↑ Madden, Bartley J. (September 2014). Reconstructing Your Worldview. Learning What Works Inc.. p. 99. ISBN 978-0-9885969-3-1.
24. ↑ Nielsen, Poul A. 2014. "Performance Management, Managerial Authority, and Public Service Performance." Journal of Public Administration Research and Theory. 24(2):431–458.
25. ↑ Gerrish, Ed. 2015. "The Impact of Performance Management on Performance in Public Organizations: A Meta-Analysis." Public Administration Review 76(1):48–66.
26. ↑ Peacock, M., Stewart, E. B., & Belcourt, M. (2020). Managing Employee Performance. In Understanding human resources management: A Canadian perspective (pp. 211-239). Toronto: Nelson Education.
27. ↑ Abeysiriwardana, Prabath Chaminda; Jayasinghe-Mudalige, Udith K. (2022-08-10). "Single window performance management: a strategy for evaluation integrated research culture in the commercial agriculture sector" (in en). SN Business & Economics 2 (9): 128. doi:10.1007/s43546-022-00297-0. ISSN 2662-9399.
28. ↑ US Office of Personnel Management, A Handbook for Measuring Employee Performance, published March 2018, accessed 26 October 2022
29. ↑ Bracken, D., & Rose, D., "When does 360-degree feedback create behavior change? And how would we know it when it does?", Journal of Business and Psychology, 26(2), 183-192
30. ↑ Kakkar, Shiva; Dash, Sanket; Vohra, Neharika; Saha, Surajit (2020-04-23). "Engaging employees through effective performance management: an empirical examination". Benchmarking 27 (5): 1843–1860. doi:10.1108/bij-10-2019-0440. ISSN 1463-5771.
31. ↑ Richard, Pierre J.; Devinney, Timothy M.; Yip, George S.; Johnson, Gerry (2009-02-06). "Measuring Organizational Performance: Towards Methodological Best Practice". Journal of Management (SAGE Publications) 35 (3): 718–804. doi:10.1177/0149206308330560. ISSN 0149-2063.
32. ↑ Upadhaya, Bedanand; Munir, Rahat; Blount, Yvette (2014). "Association between performance measurement systems and organisational effectiveness". International Journal of Operations & Production Management (Emerald) 34 (7): 853–875. doi:10.1108/ijopm-02-2013-0091. ISSN 0144-3577.
33. ↑ BPM Mag, What is BPM?
34. ↑ The Next Generation of Business Intelligence: Operational BI
35. ↑ White, Colin (May 2005). "The Next Generation of Business Intelligence: Operational BI". Information Management Magazine. http://www.information-management.com/issues/20050501/1026064-1.html?zkPrintable=true. Retrieved 2010-02-21. "The biggest growth area in operational BI analysis is in the area of business performance management (BPM).".

## Further reading

* Business Intelligence and Performance Management: Theory, Systems, and Industrial Applications, P. Rausch, A. Sheta, A. Ayesh (Eds.), Springer Verlag U.K., 2013, ISBN 978-1-4471-4865-4.
* Performance Management - Integrating Strategy Execution, Methodologies, Risk, and Analytics. Gary Cokins, John Wiley & Sons, Inc. 2009. ISBN 978-0-470-44998-1
* Journal of Organizational Behavior Management, Routledge Taylor & Francis Group. Published quarterly. 2009.
* Handbook of Organizational Performance, Thomas C. Mawhinney, William K. Redmon & Carl Merle Johnson. Routledge. 2001.
* Improving Performance: How to Manage the White Space in the Organization Chart, Geary A. Rummler & Alan P. Brache. Jossey-Bass; 2nd edition. 1995.
* Human Competence: Engineering Worthy Performance, Thomas F. Gilbert. Pfeiffer. 1996.
* The Values-Based Safety Process: Improving Your Safety Culture with Behavior-Based Safety, Terry E. McSween. John Wiley & Sons. 1995.
* Performance-based Instruction: Linking Training to Business Results, Dale Brethower & Karolyn Smalley. Pfeiffer; Har/Dis edition. 1998.
* Handbook of Applied Behavior Analysis, John Austin & James E. Carr. Context Press. 2000.
* Managing for Performance, Alasdair A. K. White. Piatkus Books, 1995

## External links

* Plug-In T12 Business Process http://www.sci.brooklyn.cuny.edu/~firat/mis/PlugInT12.pdf
* "Giving the Boss the Big Picture: A dashboard pulls up everything the CEO needs to run the show". BusinessWeek. Bloomberg L.P.. 2006-02-13. http://www.businessweek.com/magazine/content/06_07/b3971083.htm.
* Business Finance: Bred Tough: The Best-of-Breed, 2009 (July 2009)
* Defining success through strategic planning and priority goal setting
* The Balanced Scorecard
* Organizational Performance Management

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