The process of business performance management is one where measurement of the business is constantly measured against specific objectives. The performance of everyone from the Chief executive to the newly recruited cleaner is measured against objectives or targets to identify where the business is going right and where corrective action needs to be applied.

The performance management process begins with defining a vision - the purpose of the business and where it is headed. The vision is expanded into a strategy which explains how the business can achieve its vision. The strategy consists of a number of strategic objectives. Strategic objectives are broad, longer term objectives that the business must achieve to be successful.

Objectives should be SMART objectives - Specific, Measurable, Achievable, Realistic and Time-bound. The What, How much and When are key to the process.

Ideally the objectives should define everything that is important for the business to succeed and performance should be measured against only these objectives. Put simply, do only what is required to achieve these objectives and nothing else.

Often a Balanced Scorecard or BSC is defined for the business. This attempts to measure the businesses success in terms of a number of perspectives. The financial perspective could have measures such as profit, turnover, and measures against costs. Each measure is called a Key Performance Indicator or KPI. Typically, a KPI is a formula that measures the performance of an aspect of the business against the objective. For example, sales volumes can be measured against last year's sales volume, against costs or in terms of the profitability of the sales.

Moving from the executive to the operational divisions the KPIs cascade downwards becoming more detailed in the process. Often the entire process is replicated at divisional (or departmental) level where each division defines its own objectives and defines its own balanced score card. The divisional BSC is fed up to the corporate corporate BSC.

As KPIs cascade down the organisation, they become more specific until they can be measured in terms of individual activities. Each division is measured in terms of its own KPIs or measures. Each manager has personal objectives measured by personal KPIs that must be achieved by his division or department. On the ground floor the KPIs become very specific to each employee where each activity is measured against specific targets.

The entire

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