Corporate performance management (CPM) is an important element of business intelligence: It helps organizations evaluate where they are now, and develop a road map for where they want to go.
But unless you’re well-versed in the world of CPM, you may not fully understand what corporate performance management is, or how it differs from employee performance management.
Let’s take a closer look at corporate performance management: what it is, how it relates to employee performance management, and why organizations need both to succeed.
What Is Corporate Performance Management?
“Corporate performance management is the use of metrics, systems, and processes to analyze and manage a business’s performance,” explained Eropa Stein, entrepreneur and founder of employee scheduling software Hyre. “It’s a very broad term, or rather a parent term, that encompasses any methodology used to collect data or KPIs, and then translate them into a strategic plan to better optimize business performance.”
Corporate performance management is also sometimes referred to as enterprise performance management (EPM), or business performance management (BPM). But whatever verbiage you use, CPM is ultimately an umbrella term that covers a variety of strategies to improve and optimize a company’s performance.
It’s important to note that CPM is not a strategy in and of itself; there are a variety of strategic planning frameworks used in corporate performance management, such as Balanced Scorecard, a strategic planning system, or the EFQM Model, a framework for managing organizational change and performance. And CPM business metrics will vary based on the company, what they’re trying to accomplish, and how they go about hitting those goals.
“Each company, department, and product [or] service will have different and unique metrics and/or strategies,” said Stein.
For example, a Consumer Packaged Goods (CPG) company focused on increasing profits might use metrics like total revenue, units sold, and cost of goods in their CPM strategy, while a business consultancy aiming to improve customer retention might look at metrics like churn, customer sentiment, and monthly recurring revenue. Additionally, a company focused on improving profitability might take a different approach to CPM (and make completely different strategic decisions) than a business intent on increasing market share or driving product innovation.
Even though the metrics and methodology will vary from company to company, across the board, CPM should be “simple to understand and easy to track,” noted Stein. “[Stakeholders] agree on the overall company strategy, collect meaningful and relevant data, and use the data to gain insights to develop strategies in order to optimize company performance.”
Corporate Performance Management vs. Employee Performance Management
Corporate performance management is sometimes confused with employee performance management (also known as human performance management), but there are important distinctions between the two.
CPM is focused on “the overall health and well-being of the whole company, impacted by the contributions and efforts of all employees of the company across multiple disciplines and departments,” said Karen Mendoza, former senior leader at Nintendo and Program Director at Connected Affinity, a company that helps corporations drive connection, collaboration, and creativity through game-based programs. Employee performance management, on the other hand, “tracks the performance of each individual employee or a single department to determine its contribution or impact on the company,” she said.
Think of it as performance management on a macro and micro scale: Both are performance management processes, but while corporate performance management is about measuring and optimizing the success of the company as a whole (macro), employee performance management is about measuring and optimizing the success of each individual employee (micro). And in order for a business to thrive, you need both the macro and the micro.
“Having both corporate performance management and employee performance management will ensure that there are systems in place to evaluate the overall health and well-being of the company and its people,” Mendoza said.
Investing in employee performance management can also drive serious ROI for the company: When businesses help employees grow professionally and hit their goals, those employees then do better work — and it’s easier for the business to hit its goals as a result.
“Any strategies a company develops through CPM will be meaningless if the company’s personnel are having issues,” cautioned Stein. “You can’t effectively execute strategies if there are internal problems with your employees; they are the most important resource that makes everything in the company possible.”
How to Make Employee Performance Management More Effective
Employee performance management supports corporate performance management, and if HR teams want to contribute to improving their company’s performance, they need to invest in helping individuals succeed.
As a Human Resources leader, here are four steps you can take to improve your employee performance management processes — and help your employees (and organization) improve in the process.
1. Schedule regular one-on-ones.
You can’t manage your employees’ performance if you’re not meeting with them on a regular basis. To make employee performance management easier and more effective, start by scheduling more one-on-ones.
One-on-one meetings give you the opportunity to connect with your team members, deliver feedback (both on where they’re succeeding and any areas for growth and improvement), and receive feedback on what you can do to better support them, both at the HR and organizational levels.
2. Help your employees set goals.
Goal setting is a crucial part of employee performance management. In order to improve your employee performance management processes, use your one-on-ones to help your employees set OKRs.
OKR stands for “Objectives and Key Results.” Within this framework, the objective is the goal, and the key results are the measurable steps the employee will take to achieve that goal. For example, if your employee’s goal is to become the top salesperson on their team, their OKR might look something like this:
Objective: “Become the top salesperson on my team.”
Key Results: “Increase outbound call volume by 35 calls per day, schedule 10 sales demos by the end of the month, acquire 15 new customers by the end of the quarter.”
On an individual level, OKRs help your employees define where they want to go and develop a growth plan for how to get there. This can help employees feel more engaged and purposeful at work, which in turn can help drive productivity, boost employee engagement, and improve overall performance.
“Employees will work harder, contribute more, and stay loyal to the company if they see meaning and purpose in their work,” Mendoza said.
3. Support employees as they work toward those goals.
Helping your employees set goals is an important part of the employee performance management process. But equally important is supporting them when they face inevitable setbacks or challenges in making those goals a reality.
After you work with your employees to develop OKRs, continue to check in on their progress in regular one-on-ones: Is the original plan working out? Are they running into any challenges? Are they able to navigate those challenges, or do their objectives or key results need to be adjusted?
Continuing with the above example, let’s say that in a follow-up one-on-one with your employee, you find they’re burning themselves out in their efforts to become the top salesperson on their team. Increasing their call volume and sales demos is upending their work-life balance, leaving them stressed, overwhelmed, and disengaged at work.
In that scenario, you could work with the employee to adjust their OKR in a way that supports better work and a healthier work-life balance. For instance, they might be able to become the top salesperson on their team without increasing their call volume so dramatically. Or perhaps they could adjust their objective and work on improving their sales skills rather than being the top performer on the team, which would allow them to structure their time differently.
The path to achieving a goal is rarely linear. If you can support your employees when they hit a detour, your employee performance management will be more effective as a result.
“Mistakes, errors, and failures are all part of the learning and development process,” noted Mendoza. “Organizations that can effectively demonstrate support and empowerment to team members during the learning and development process are going to be much better off in the long run.”
4. Use the right tools.
If you want to make your employee performance management easier and more effective, you need the right tools.
At Lattice, our performance management tool allows you to work with employees to set goals, deliver and receive feedback, and maximize the effectiveness of your one-on-ones — all from one easy-to-use platform. We also offer a full analytics suite that allows you to better understand and track your employees’ performance over time — and use those insights to improve your employee performance management processes and help your team reach their full potential.
Want to learn more about how Lattice can help you make the most out of your employee performance management? Request a product demo today.