A performance baseline provides a steady reference to measure against, and allows performance to be assessed more accurately. Without a baseline it can be difficult to assess progress and when not controlled, issues can be easily masked.
Providing a clear link from the organisation's strategic objectives to the outputs of teams and individuals enables the business to plan more effectively and realistically. Monitoring and controlling the outputs through SMART performance metrics allows focus to be directed to areas where achievement of strategic objectives may be at risk.
Performance analysis adds value by providing a detailed understanding of what data means, rather than a straightforward presentation of raw data. The analysis is focussed on critical areas and may provide an indication of direction of the project and a clear understanding of the causes of historical trends. Effective, balanced data analysis prevents overloading stakeholders with data. Without valuable analysis, return on investment from a performance management system is unlikely to be seen, and opportunities to turn performance data into timely, targeted management actions may be lost.
Performance reports and dashboards
Information being reported must be trustworthy and used to support decision-making within the organisation. When performance management system outputs are not reliable or not acted upon, systems become under-utilised and concerns and issues go unreported, introducing greater inefficiencies.
Organisation structure and reporting hierarchy
Having clear reporting lines ensures the upward flow of information is straightforward, decisions and actions can be cascaded down, and a simple and effective closed feedback loop exists. It ensures that the right information is presented to the right people so the right decisions can be made. Where structure is not clear, or is unnecessarily complex, reported information can be distorted or delayed, resulting in the need for unnecessary senior mangement intervention.
Drumbeat of performance reporting
A disciplined reporting drumbeat allows individuals to plan their workload and establish a routine. It provides clear timeframes for information reporting and availability for stakeholders. Maintaining a regular drumbeat results in reliable, trusted reporting. Without a regular and disciplined drumbeat, reports will become unplanned, with ad-hoc requests resulting in rushed and potentially unreliable reports.
Effective and valuable performance management allows informed decision making at appropriate delegated levels. Without effective performance management, managers will not fully understand the exact project status or the impact of options available to them.
Decisions will not be based on sound data and detailed analysis.
Documenting interfaces with suppliers, customers and other teams, allows an organisation to clearly understand these interfaces and ensure they are actively managed. Understanding reporting requirements ensures accurate, correct, timely information is requested from suppliers, which can be streamlined to minimise meetings.
Staff behaviour and culture
Without the right behaviours and culture amongst staff, individuals may withhold or 'spin' information, causing unexpected issues in the future. A trusting, open and supportive environment results in early identification and resolution of problems.
Benefits and continuous learning
Performance management must deliver clear benefit and add real value for it to become embedded as a sustainable business-as-usual process. Analysis and reporting becomes easier and more effective as knowledge and experience of the performance management team grows. If performance management fails to add benefit to the business, senior managers will ignore data, individuals will stop reporting and performance management will gradually disappear.