Performance

Why Performance Management Matters

Generalizing about human organizations, the basic function of a business or enterprise is to collect and deploy Financial resources (and their surrogates, “assets” and “liabilities”) to enable an enterprise’s Workforce to serve Customers (we understand that these terms have various other manifestations such as employees, associates, partners, members, patients, constituents, et. al.).

These Three “M’s”: Financial Resource Management (FRM), Employee/Enterprise Performance Management (EPM), and Customer Relationship Management (CRM),  in all of their myriad variations, are the real-world application of these basic priorities.

Success in each discipline requires the total integration of Priority-dictating business process execution and enabling technology implementation.  And, therein lives the challenge.

Even in the most sophisticated industries, in the most advanced markets and economies, business processes and enabling technologies are not integrated across the full spectrum of Finance/Resources, Customers, and the Workforce.

The model for an “ideal” is how business and government have standardized the processes and technologies of Financial Resource Management: creating centralized organizations (the SEC, IRS, FASB et. al.); to define, enforce and sustain universal process standards (GAAP, Tax Codes, financial reports, audit standards, insurance, etc.); so that uniform technologies (general ledger, fixed assets, forecasting and other accounting systems) could be created and cost-effectively deployed.

Financial Resource Management works (absent criminality) because both processes and technologies are already standardized: precisely defined, mature, stable, completely integrated, totally interdependent, and implemented without compromise across organizations (with appropriate organization, market, and/or government sanction when standardized processes are violated).

For most businesses and organizations, that is not the case in CRM, and the situation is far worse in EPM.  Across the spectrum of Process and Technology integration, fragmentation and dislocation escalates:

 

The Status Of Process & Technology Integration

Financial Resource

Management (FRM)

Customer Relationship

Management (CRM)

Employee Performance

Management (EPM)

PROCESSES

Universal, Mature, Standardized

Fragmented, Company-Specific, Relatively Simple

Fragmented, Company-Specific, Very Complex

TECHNOLOGIES

Fully-Automated,

Fully Integrated

Largely Automated,

But Not Integrated

Largely Manual, Partially Automated, Not Integrated

 

With the lack of uniform process standardization, technology cannot be standardized, nor can it be integrated.  Without integration, technology cannot leverage business process to improve performance.

While many have examined the successes and failures of FRM and CRM over the years, the Performance Manager Blog will explore the keys to success in Employee and Enterprise Performance Management, and EPM’s critical impact on these other disciplines.

 

Where Are My Generally Accepted Performance Management Principles?

Given that labor costs represent one of the most significant expense items for most enterprises, it should come as no surprise to anyone that “personnel”, “talent”, or “human resource” management is a major strategic and tactical priority.

Too many organizations, however, both in and outside of the commercial arena, take far too much for granted when it comes to the management of workforce performance (we don’t mean glorified historical job assessment tracking, but the actual on-the-ground, hour-to-hour performance of real work).

The facts are that when it comes to the workforce, most organizations implement broad-based yet highly fragmented initiatives, or invest the minimum required by regulation and law, or both (unfortunately, the same can also be said for most CRM initiatives).

Yet, since there are no “Generally Accepted Performance Management Principles”, each enterprise is left to its own devices to imagine, construct, implement, sustain, and evolve its own ‘unique’ approach.  And, do so with the participation of stakeholders, subject matter specialists, consultants, technologists and governments who have not agreed on any standards.

The Financial Resource Management equivalent of this would be for each business in an economy to use its own accounting methods, systems, rules, processes and procedures.  Which would lead to total chaos.  Sadly, that’s the world within which most employees perceive they live and work.  The fundamental consequence is the under-performance of most human enterprises.

Employee/Enterprise Performance Management (EPM) is an approach that applies the same process, procedure and technology rigor, consistency, and universality to workforce performance as organizations now apply to Financial Resource Management; at least within an organization.  EPM’s objective is to create a coherent and comprehensive environment within which a workforce can thrive and optimize, and an organization can fulfill its potential and achieve its objectives.

Some may characterize this approach as Human Performance Improvement, Talent Management, or simple Human Resource Management.  However, each of those approaches neglect the broader day-to-day street-level realities of linking strategies, tactics, customers, managers, the workforce, technologies, and business processes that are addressed by EPM.

In our strategy development and implementation client work over the past quarter century, we’ve discovered and evolved a range of guidelines that define the keys to success in rigorous and integrated EPM.  These “Rules” evolve in scope from “big-picture” strategy-focused, to those that are more tactical and execution-specific.

Based on the foundation of these guidelines, we’ll post ongoing observations, information, and opinions about business, organization, and government and their ongoing performance management initiatives.

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