This document discusses performance management as a methodology for assessing and reporting on organizational progress, management, and governance impact. It provides an overview of performance management systems, including their purpose of achieving objectives, process optimization, and managing outcomes. Various models of performance management systems are described, such as the balanced scorecard and critical few model. Methods for evaluating performance management systems include the SMART-ER test, quality check, and three criteria test. Key aspects of effective performance management systems are outlined.

1. PERFORMANCE MANAGEMENTPERFORMANCE MANAGEMENT
A methodology for assessing and reportingA methodology for assessing and reporting
progress, management and governanceprogress, management and governance
impactimpact
YAKUBU, EMMANUEL O.

2. It would be nice if all of the data [we] require could be
enumerated because then we could run them through
[computers] and draw charts…
However, not everything that can be counted counts, and
not everything that counts can be counted
William Bruce Cameron instead of Albert Einstein.
Cameron’s 1963 text “Informal Sociology: A Casual
Introduction to Sociological Thinking”
The Paradox in performance Management
What are you counting and reporting...?

3. “…chart a course for every endeavour that we take the
people’s money for, see how well we are progressing, tell
the public how we are doing, stop the things that don’t
work, and never stop improving the things that we think
are worth investing in.”
President Bill Clinton, on signing the
Government Performance and Results Act of 1993
The US Government established the National Performance Review
(NPR) to reinvent government…with initiatives to foster
collaborative, systematic benchmarking of ‘best-in-class
organisations’ - public and private - to identify best practices in a
wide range of areas vital to the success of organisations in
providing high-quality products and services to the American
people.
Performance Management…in Governance…

4. Performance Management System is….
1. An overall management system aimed at achieving
organisational objectives to meet the needs of customers
[local citizens’]
2. Process optimization to attain increased efficiency and
effectiveness ...in a continuous cycle, allowing options for
improvement.
3. Managing outcome...to reduce or eliminate variation
[waste] with the goal to arrive at sound decisions about
actions affecting the organisations’ processes and output.

5. What Are Performance Measures?
a. Qualitative & Quantitative measures of
the value of our projects/services, and
the processes that produce them.
b. Provide us with the information necessary
to make intelligent decisions about what
we do.
c. Tools to help us understand, manage, and
improve what our organisations do. They
let us know:
• how well we are doing
• if we are meeting our goals
• if our [citizens] stakeholders are satisfied
• if our processes are under control
• if and where improvements are necessary

6. Why measure performance?
1. Control: If you cannot measure an activity, you cannot control it. If you
cannot control it, you cannot manage it. Without dependable measurements,
intelligent decisions cannot be made.
2. To reduce variation, detect deviations from
plans and restore performance to the planned levels.
3. Self-Assessment: to assess how well a process
is doing, including improvements that have been made.
4. Continuous Improvement: to identify defect sources, process trends,
and defect prevention, and to determine process efficiency and effectiveness,
as well as opportunities for improvement.
5. Management Assessment: to ensure we are meeting value-added
objectives

7. Methods of Evaluating Performance
Management Systems
1. SMART-ER Test
2. Quality Check Test
3. The 3 Criteria Test

8. Evaluation System
Method 1: SMART-ER TEST
• S = Specific: Is the measure clear and focused to avoid
misinterpretation? It should have clear definitions and be easy to
interpret.
• M = Measurable: Can the measure be quantified and compared
to other data? Avoid “yes/no” measures, if you can
• A = Attainable: Is the measure achievable, reasonable, and
credible under conditions expected?
• R = Relevant…Does the measure fit into the organisation’s
constraints? Is it cost-effective?
• T= Timely: Is measurement doable within the time frame given?
• E= Evaluated: Can it be evaluated?
• R= Risk: What is the level of risk?

9. Evaluation System
Method 2: Quality Check
• Is the measurement objectively measurable?
• Does the measurement include a clear statement of the end results expected?
• Does the measure support [stakeholder] requirements, including compliance
issues where appropriate?
• Does the measure focus on the effectiveness and/or efficiency of the system
being measured?
• Does the measure allow for meaningful trend or statistical analysis?
• Has appropriate industry or other external standards been applied?
• Does the measure include milestones and or indicators to express qualitative
criteria?
• Are the measures challenging, and at the same time, attainable?
• Are assumptions and definitions specified for what constitutes satisfactory
performance?
• Are those who are responsible for the performance being measured been fully
involved in the development of this measure?
• Has the measure been mutually agreed upon by you and your stakeholders?

10. Evaluation System
Method 3: The 3 Criteria Test
1. Strategic Criteria - Do the measures enable strategic planning
and then drive the deployment of the actions required to
achieve objectives and strategies? Do the measures align
behavior and initiatives with strategy, and focus the
organisation on its priorities?
2. Quantitative Criteria - Do the measures provide a clear
understanding of progress toward objectives and strategy as
well as the current status, rate of improvement, and probability
of achievement? Do the measures identify gaps between
current status and performance aspirations, thereby
highlighting improvement opportunities?
3. Qualitative Criteria - Are the measures perceived as valuable
by the organisation and the people involved with the metrics?

11. Models of Performance Management Systems
1. Balance Score Card
2. The “Critical Few” Model
3. Performance Dashboards

12. Some Models…
Balance Score Card [Robert Kaplan and
David
Norton, 1992] - looks at four interconnected
business perspectives, takes a systematic
approach to assessing internal results while
probing the external environment

13. Balance Score Card…an example of a Health
Management System

14. Some Models…
The “Critical Few” Model selects a few critical
factors that drive strategic success and helps
sharpen understanding of the strategic plan
and objectives, noting a balance between
internal and external requirements, as well
as financial and nonfinancial measures

15. The “Critical Few”…
This involves selecting a few element of the
business operations as areas of/for strategic focus
The selected ‘critical few’ must have…

16. Some Models…
Performance Dashboards pilots the
organisation by identifying key success
factors, especially those that can be
measured as physical variables

17. HEALTH WARNINGS!
What the Executive Dash-Board won’t tell you
• The cause and effect of outcomes –
are not easily established
• Poor results do not necessarily point
to poor execution
• Numerical quotas do not fix defective
processes
• Measurements only approximate the
actual system
• Performance measures do not ensure
compliance with laws, regulations and
policy

18. Top 10 “Good Practice” Indicators in Performance
Management
1. Define clearly who your stakeholders are
2. Adapt, don’t adopt, make the system work for you
3. Don’t stop at the top, cascade throughout the organisation
4. Listen to your stakeholders and employees and define what measures
mean the most to them, create an easily recognised body of measures
5. Try to achieve a balanced set of performance measures i.e. a family of
measures
6. Establish Results-Oriented Set of Measures - that balance Business,
Stakeholders and Employee
7. Commit to initial change, make the system clear and concise.
8. Be flexible, recognise that performance systems are living processes,
maintain a balance between financial and nonfinancial measures.
9. Establish accountability at ALL levels of the organisation
10. Connect the Dots - performance management system must be linked to
your strategy and plan

19. Conclusion
To achieve good performance management…
Provide people with increased autonomy—pushing the
responsibility for making the necessary business trade-offs as close
to the front line as possible
Encourage building capabilities of people and teams, not just
evaluating them
Be a more open and collaborative process that truly leverages the
collective intelligence of the company and de-politicizes decision-
making
Feature ongoing, consistent dialog and feedback that enables
real-time adjustments based on a broad set of inputs and metrics
Apply these principles in how you design and execute several
important management processes, like when setting goals,
allocating resources, forecasting, and providing rewards and
incentives
The processes should be as self-regulating as possible…the less
we need to manage the better.