Even before it became a business concept that is we there were applications of business performance in a non-office environment. For examples Tzu framed it in terms of understanding the relative weaknesses of the opponent and competitor.

This understanding of business performance management was particularly useful when undertaking warfare. It would involve the inversion of the formula so that one could examine their own organization and apply the same rigorous standards that they would apply to an enemy. It still involved the essential ingredients of data gathering which was then deciphered and turned into practical information.

Prior to the full development of information technology, organizational decisions were more often than not arising out of gut instinct rather than scientific evidence. This could lead to excellent decisions or it could lead to horrendous decisions but there was no systematic or consistent means of analyzing the critical factors for making decisions. It was not because of a lack of management information. In fact information was manually being collated on a very large scale involving vast numbers of staff. However this information was not in a compact or easily accessible format and therefore managers would find it inconvenient to make short term decisions based on it.

With the advent of information technology it was now possible to process vast amounts of data and disseminates it to a very wide spectrum of people. Pivotal table principles allowed individual managers to select only that portion of the management data that applied to them. This allowed the decisions makers to identify patterns of working. A correlation between management information and business performance management was established and gradually it was scaled up to a full profession.

In the late 1980S business writers began to seek new terminology to describe the process of managing organizations. As is often the case, professional bodies were established and contracting firms started to offer services on an outsourcing basis. At that point internal business managers were rather awestruck by some of the terminology and the concepts that were being put forward.

Business performance management then went through a phase where it was just like any other fad. All sorts of wild theories would be created and discredited. Eventually the practice was applied to both small and large organizations. As the results started to come in, there was a process of natural selection where the best theories would be adopted by the most successful companies while the unconvincing ones were left to die a natural death.

These days performance management is embedded in all business practice. It has been a standard addition to the manager’s toolkit and is consistently visible within any management training or recruitment programs.

These include but are not limited to operational performance management (OPM), business performance optimization (BPO), corporate performance management (CPA) and enterprise performance management (EPM). Despite the difference both operate on one principle which attempts to increase the efficiency and profitability of the organization right up to the optimum level.

In order to achieve this aim, the organization has to muster all its resources whether it is human capital or technology aids with the overriding aim of reducing costs, increasing output and growing profits. The challenge is getting all departments to understand their work in times of increasing efficiency and profitability. Many of them will have vested interests and their own agendas. The institutional culture that you have encouraged in your company will also have an impact in terms of the extent to which staff members are willing to join your efforts at performance management.

Evidence shows that performance management process does go hand in hand with change management. In order to prioritize the company’s core objective, there will have to be significant period of organizational change. Where there is change culture resistance is not far off. It will take a lot of work to get the whole organization to work in sync. The larger the organization the greater the complexity of effecting change.

Performance management by its very nature seeks to create minimum performance standards. It can create rewards and sanctions depending on the level of compliance. The strategic nature of its operations means that it often takes precedence over the day to day routine. It also creates a fear of management as people may believe that their jobs are being restructured and will eventually disappear from the payroll.

Performance management is a process and not just an incident. It is imperative that there is a continuous assessment in order to ensure that the changes and performance standards are not a one-off administered in haste but part of a well planned strategy to improve performance. Staff members should be encouraged to record the results of their own work and review their own performance in line with the standards that have been set.

There is always a risk that business performance management is created and supervised as a top-down activity. This is an approach that is likely to attract the stiffest resistance from members of staff who may feel that they are being dictated to by management. Rather efforts should be made to ensure that even the lowest employee believes that performance management is in their best interests. If they are to do well then the rewards will go to them in terms of promotion and better conditions.