What is a Performance Management System?

Fourth Objective
Dubai Islamic Bank –
Performance Management Systems
What is a Performance
Management System?
Performance Management is about managing the
performance of the employees in the organization and the
performance of organization as a whole.
What’s its Importance?
Most successful organizations have very strong
performance management systems.
A strong performance management system enables
setting, tracking, monitoring and achievement of goals
which are defined in the strategy map of the
“The successful organization
should have a performance
MANAGEMENT system and
performance MEASUREMENT
What is
What is Performance Measurement
Performance measurement is a process
whereby the drivers and results of key
activities within a company are measured and
recorded using different types of information.
Why is Performance Measurement
Performance Measurement provides feedback to decision makers
to assist them in improving performance and to key stakeholders to
attest as to whether the different departments are delivering on
their commitments.
Performance Measurement is a part of any proper organizational
strategy, planning and reporting process.
Ideal Performance Measurement
• Strategic
Characteristics of
a good
• Holistic
• Relevant
• Timely
• Accurate
• Consistent
What is the difference between performance
management & performance measurement?
Performance measurement is a control procedure and it aims to measure
the actual performance and determine whether it is good or bad so that new
actions or changes in existing actions can be planned.
Performance measurement is just part of performance management and
they are both ongoing processes.
We can say that performance management involves planning, control and
decision making so that the performance will improve continuously, and not
only measuring the outcomes they hope to achieve.
Performance Management & Performance
One of the most popular Performance Management systems i.e. the
Balanced Scorecard is followed by DIB wherein it measures the
performance on 4 aspects of the organization:
These 4 aspects are crucial to the success of any organization and
hence it is important to set KPIs to ensure that employees focus
on these aspects to ensure the success of the organization.
What are KPIs (Key
Performance Indicators)?
Key Performance Indicators
Any performance measurement system requires the identification
of indicators to identify past, current or potential future outcomes
which will attest to the company’s sustainability and may be either
qualitative or quantitative in nature.
There can be many indicators of performance in any company but
only a select group of indicators are measured and tracked at
higher levels in the organization.
These KPIs are used because they highlight those aspects of
performance that are integral above all others in
providing insights on performance and
how it can be improved.
Why Use KPIs
KPIs allow a company to do a number of things:
Report past outcomes, both good and bad;
Identify where improvements should be made and what resources
are required;
Support internal and external quality improvement;
Determine the quality and robustness of business processes; and
Allow stakeholders to independently judge the company’s
Why Measure Performance using KPIs?
(1 of 2)
Performance measurement using KPIs is a process that requires
substantial planning and effort to achieve a successful outcome. So why
implement a KPI program? Some or all of the following reasons for using
KPIs will typically apply:
To instil a performance driven culture
To improve the quality of management decision making
To identify whether the organizational strategy and milestones are on
track so that stakeholders can be confident that the management is
working towards the objectives.
Why Measure Performance using KPIs?
(2 of 2)
To communicate and align strategy across the organization to ensure
that all the key parts of the organization are working to achieve the
same strategic goals
To provide transparency and credibility at both management and
stakeholder level.
To assist in meeting compliance reporting requirements set by
Government and regulators (where applicable)
To support a focus on continuous improvement which can be
facilitated by tracking the progress of KPIs overtime and between
both internal and external benchmarks.
How Often?
Setting Clear Objectives Beginning of financial
Monitoring of the
execution Objectives
Throughout the year
Rating of Objectives
End of the year
Performance Management is the sole responsibility of each and every
supervisor (or manager). The supervisor should ensure that each of
his employees performs to the best of his/her ability and should take
appropriate measures to ensure that. The supervisor should be able
to distinguish between average performers, good performers and
exceptional performers and this is the key aim of any
performance management program.
When it Should be Reviewed?
A formal review should take place at the mid of the year and at
the end of the year. However, depending on the work
responsibilities, the performance of the employee has to the
conveyed to the employee at every stage of achievement or
non–achievement. The employee has to be clear where he or
she stands on achievements throughout the year.

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