Performance Management

Performance management is a broad term that includes the inter-related and ongoing processes of performance measurement, financial reporting, benchmarking, strategic planning, portfolio analysis, capital allocation, target setting, budgeting, performance review, incentive compensation, and investor communication. In short, performance management is what managers do.

The ultimate goal of performance management is to coordinate all business activities toward the common strategic, financial and mission-driven objectives set by company leaders. Importantly, not all of these goals are financial in nature, as companies strive to be accountable to both shareholders and other stakeholders, such as employees and communities.

Not all of the performance-based financial and strategic goals can be measured objectively or in a single year. The Balanced Scorecard is a popular method of combining financial and non-financial metrics that may be short, medium or long-term in nature.

Performance measurement frequently involves the use of software to track all the data being measured. This software typically goes by the names of CPM (Corporate Performance Measurement), BPM (Business Performance Measurement), or BI (Business Intelligence) software.

The most recent and widely accepted performance management trend over the last two decades is Value Based Management.

Benchmarking performance against competing companies, or peers is a common and important practice in performance measurement and management. See Indexing Operating Performance, to explore how Obermatt has taken benchmarking to new levels. Obermatt's methods of ranking relative performance and measuring Operating Alpha have resulted in Value Based performance measurement and management practices not possible before, but with significant opportunities for long-term, bottom-line value creation.