For the suitable mechanism in performance management only one slogan is applied and that is 

What can I (Entrepreneur) understand about his business is totally differ in same business, another person and ideas of management is not a strict path the management is tool to make the path if your path is appropriate for your business not necessary that same shall be applied in another business, though for the performance management is subject to matter of your own choice that how can you improve and make your own suitable idea in exist infrastructure like human and plant & machine of your own business to get best result.     

Dear Dr.Ashok KUmar,

You talk about the competitive advantages of business. But I am interested in the mechanisms of business performance management, i.e. a set of methods, actions, relationships, structures and tools that enable to improve the business and make it more effective.

  Dear Prof. Goncharuk,

I think your question is too general. Can you specify your needs. Do you search for strategic or operational tools? For research or for consulting? For which type of organisation? What do you accet as main performance measure (value, financial returns, growth, growth of competitive advantage etc.)

I am interested in business performance management tools and will be happy to contribute.

Sincerely,

Karolina Mazur, prof. UZ

Dear Karolina,

We look for effective mechanism to improve performance at wine business (SME and big business).

What measures and tools do you prefer and why?

When you want to manage business performance

• the first step is to assess business performance, ideally against defined goals
• second you need to identify root causes for the achieved performance level
• third you need an improvement program to achieve the desired level

To assess the business performance you want to look at

• market performance

i.e. market position, market share, distance to key competitors, awards

• financial performance

i.e. key figures including sales, order intake, profit, growth, return on capital employed, economic value added (EVA)

• value creation for stakeholders

- investors: EVA (see above), earnings per share (EPS)

- customers: value added by products/ innovations incl. ROI

- partners: value created through partnership (turnover, customer access,

  business reach, access to knowledge/ best practices ...)

- employees: compensation & benefits, career opportunities, ...

- society, environment: social responsibility, sustainability, ...

To identify root causes for over or under achievement respective to the defined goals, you need to look at key success factors. These include

• business processes
• strategy
• organisation
• leadership, culture

To design the improvement program, you take the identified strengths and weaknesses into account and consider the risks and opportunities for the respective business and define measures to achieve the necessary performance level in every relevant area. Prioritization of the measures and stringent management of the improvement program with high management attention is key.

Dear Elisabeth,

Thanks for your comprehensive answer.

Do you have any general scheme how to unite all these actions in one mechanism that will ensure a steady and continuous growth of business performance?

Top management has to take responsibility and ensure that this improvement cycle is performed on a regular basis e.g. annual or bi-annual - depending on the individual pace of the business. He/she has the option to install a dedicated function to execute.

From time to time it may be necessary to call in independent consultants to perform a full blown business audit.

Anatoily,

You may like to research the concept of “balanced scorecards” to establish a set of measures that will help to assess and track the success of the business against a range of financial, attitudinal, and functional measures. You could establish the key macro and micro areas that the business consider as important for its development, and spend time with the leaders establishing what there “Key Performance Indicators” are – the old maxim of “what gets measured gets managed” sounds simplistic but rings true.

Positioning is also key; if it’s the business managers who are going to be implementing this, an important factor to think of is how they will conceptualise it and what will help them buy in to it? Production managers who are focused on input and output costs are more likely to embrace performance management approaches that that have a discourse in these terms.

 Elisabeth,

 So how do you motivate your  employees to perform these performance indicators?

and who proves the value of the targets?

Agree with Brian, and also expand it to encompass a triple bottom line approach.  That is, also include in the scorecard measures related to environmental and social responsibility - very relevant today for any company.

Dear Brian,

The measurement is possible, but whether we will be able to manage and to achieve the required level of performance?

Unfortunately the most of methods and tools in the literature are connected with the measurement and evaluation of performance. But this is only one management function!

Where is a full mechanism of business performance management?

Not sure what you mean by "only one management function", Anatoliy.  I'm not sure you can measure management as opposed to the outcomes of management.

Dear Sylvia,

Measurement is a part of only one management function - Controlling.

But what about the other function like Planning, Organizing, Motivating ... ?

Should we include them to business performance management mechanism?

Hmm, I'm still not following.  You can measure lots of things outside o controlling.  For example, you can measure change in organizational culture by measuring change in perceived behaviours.  Not everything can be quantified, of course, but you can verify that something has improved by looking at other indicators. I'm still not really understanding what you are asking here - can you give more detail about what it is you are trying to change?

Anatoliy,

employee motivation is part of the leadership/culture aspects of the assessment, RCA and improvement program. The most efficient and effective means to motivate the employees can only be selected based on the specific results and taylored for the specific case.

What exactly do you refer to when speaking about proving the value of the targets? Is it related to the adequacy of the defined goals?

Sylvia, I'm not trying to change anything.

I'm just trying to find out if you or anyone else has an idea of what should be an effective mechanism for business performance management.

You are trying to show the importance of measurement. But the measurement is not the management! This is just one of its functions.

 Elisabeth,

I'm interested in effective motivation tools that will make employees to achieve goal of improving performance.

Anatoliy,

as I said before, employee motivation is very case specific. Only a very good understanding of the status quo and underlying root causes enable the (performance) manager to come up with the right measures.

But generally, my experience is, that one of the best levers is to implement a high performance culture in the organization.

Perhaps it's the word "mechanism" that's throwing me off.  Is that what you mean by effective motivation tools?  There is  huge amount of research around regarding fostering employee performance.  Organizational culture is an fundamental element of this, as are performance development and coaching, role clarity, leadership behaviours, and so much more. The biggest driver of performance, I believe, is culture, and the biggest driver of culture is leadership approaches/behaviours.  

Culture is wonderful. But if the company has automated production and 99% of the working time employee has no one to talk, except of the machine? How to get them to improve business performance? What will you measure and where here is your culture?

 Elisabeth,

I agree with you about the specificity of motivation.

But how to combine all the functions of the business performance management into a single mechanism?

Well, maybe providing more opportunity for people interaction would help.  So what you're really asking, I think, is how to generate improved employee performance that contributes to overall organizational performance.  All the things I listed earlier - performance development and coaching, etc., still apply.  As does culture.  Do the employees believe they are seen primarily as machine minders?  Do leaders involve them in discussing how to improve processes?  Do the employees have any sense of autonomy?  Do leaders ensure they understand how their work contributes value to the company?  Are people engaged in their work, or simply hanging out in a production line context? These are all aspects of culture.  

You can measure process improvement, through things like faster process completion, quality of output, etc.  But you can't simply 'legislate' process improvement.  You can measure levels of employee engagement (although it is a snapshot in time, not a deep measure).  

is what Elizabeth and I a writing of getting to what you need?

Sylvia,I agree with you. This is all important and necessary for the improvement of the enterprise activity. But this is only the individual elements of the management cycle.

But how to combine them into a single mechanism? How to present them in the form of a scheme that would reflect the full range of management subsystems and their interactions with the guarantee of the result - the sustainable growth of enterprise performance.

organizations cannot achieve performance. What we term org performance is, in reality, the aggregate of all individual performance.  Profits, for example, flow from performance factors such as people identifying and implementing cost savings, improved processes, and improved investments, developing people's marketing and sales competencies and people improving their marketing and sales results and outcomes, people developing and implementing quality management functions, and so on. It's the people who generate the collective performance results. 

For guarantee, there isn't any.  If there was, we'd all be out of jobs!  

Perhaps look at organizational design

Dear Sylvia,

Thank you.

Of course, a lot depends on the employees, but not all.

Business success affected by many factors both external and internal.

How can enterprise confront them, how to provide high performance, for example, in a fall in market demand or when we have a shortage of qualified personnel in country.

True, but it's people that confront the factors, not the enterprise.  Yes, that's often a collaborative effort to address a challenge or capitalize on an opportunity, but nonetheless, each person contributes to the decision and action.  

I see my last answer got truncated.  Perhaps organizational design (one of my passions :} ) might give you a framework for creating and measuring success (but not a guarantee).  Org design is about understanding and managing how all the elements of an organization work together, as each are interdependent on the others.  So factors like strategy, org structure, culture, leadership, talent management,, performance management, workplace safety and health, etc.

Thank you for your helpful advice.

Successful organizational performance is indeed a function of both internal and eternal factors, of which there are many. Business models focus on the who, what, and how to clarify managerial choices and their consequences. What Peter Drucker called the theory of the business may shed light on the question posed. An article on Business Model Innovation is at http://www.adb.org/publications/business-model-innovation. The key elements that Table 2 therein identifies provide sundry entry points for assessments of performance.

Thank you Olivier!

Effective performance management is critical for creating a high performance culture

which has a focus on service delivery to customers. It comprises rigorous individual

performance planning and assessment together with personal development. Good

performance management enables leaders to:

 be clear and consistent in focusing individual performance and development

on the delivery of strategic business priorities;

 motivate people to give their best;

 manage succession planning, career and personal development; and

 make informed reward decisions that recognise individual contribution and

achievement

Behrad,

This is only a definition and benefits. But I need a mechanism - a set of tools, methods and concrete actions to ensure the effective performance management.