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# Performance Management Calculator

Performance Management is the process of defining specific goals and targets to a group, team and or individual, measuring and applying a weighted score of achievements against each goal/target with a view to measuring the overall effectiveness of the group, team or individual.

TypeDescriptionTargetAchievedScore
GoalProductivity50
TargetFiles Created5
TargetCustomers Converted5
TargetAfter Sales Packages5
TargetTotal Orders Processed5
TargetQuality of Work5
TargetTimeliness of work5
TargetEfficiency of work5
TargetInnovativeness5
TargetFlexibility and Commitment5
GoalPersonal50
TargetAttendance5
TargetAttitude5
TargetKnowledge5
TargetExperience5
TargetAppearance5
TargetTraining Undertaken5
Performance Management Score50%
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## What is Performance Management?

Performance Management is the process of defining specific goals and targets to a group, team and or individual, measuring and applying a weighted score of achievements against each goal/target with a view to measuring the overall effectiveness of the group, team or individual.

Increasingly, performance management is used as part of internal KPI's (Key Performance Indicators) to measure the effectiveness of people as a resource. When applied properly, performance management can assist the manager with identifying any training shortfalls, under and over achievers and any key skills or experience that an individual, team, department etc. may be lacking.  Performance management can be utilised in any situation when there is a defined output (something is produced whether physical or a service).

Good performance management knowledge is essential for modern companies and managers and underpins most Continuous Improvement Programs (CIP) whether %s, 6 Sigma, Lean/Agile Project managed etc.

## How to calculate Performance Management | Performance Management Formula

Performance Management is calculated using these simple formulas:

Target Formula: tPM = (T/100) * A

Goal Formula gPM = Sum of all tPM / number of Targets (i.e. score 510 / 10 targets = 51)

Performance Management Formula PM = Sum of all gPM / number of Goals (i.e. score 680 / 10 targets = 68)

• PM is Performance Management Score
• tPM is Target Performance Management Score
• gPM is the Goal Performance Management Score
• T is the Target Performance Management Score
• A is the Achieved Performance Management Score

In most environments, Performance management is an organic tool with targets and gaols driven by changing in PESTLE (Political, Economic, Social, Technological, Logistic and Environmental) factors affecting the market or group.

Good Managers know and understand this and should actively manipulate their performance metrics and those of their teams to ensure that productivity, activity and effort is focused towards achieving core business objectives.

In large companies, it requires considerable effort and focus to define true and effective performance management goals.  Goals should be defined at the strategic level and then cascaded through departments and teams, each level reviewed and quality controlled to ensure that the micro goals tie into the macro goals. Individual and Team level goals that do not support the holistic goals and objectives of the company simply generate waste and drive up costs although this can be viewed as value added activity that is not understood by the wider company or employees. From experience, any added value activity should be clearly defined with cost association, goals and targets to ensure that waste does not become a normal part of the business operation - a good lesson from 6 Sigma methodology.

Regardless of the above considerations, Performance Management is actually a very simple formula, see the steps below.

• Define the goal(s) for the team / individual etc
• Define the targets within the goal which are necessary to achieve the goal
• For quantified activity (i.e., number of bread roles made per day) define the expected output (maybe 250 roles per day)
• For non quantified activity (effort, commitment etc) Assign a weighting to each target (maybe A-F, 1-10, 1-100 etc.), From experience numerical values are more effective, 1-10 works best. Simpler for review and easier for quantifying overall performance scoring
• Repeat for each Goal and Target
• Once complete, review to ensure that the Goals dovetail in with associated teams, departments, overall strategic aims etc.
• Conduct periodic assessments (daily, weekly, monthly etc.). There are costs associated to performance management as they can be timely to complete. The best Performance management systems are automated and tied into production (particularly in manufacturing where it is relatively easy to define high repetition activity). Software provides more accurate and timely metrics but may be too costly to implement for smaller companies.

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