PAGE 1

PERFORMANCE
MANAGEMENT

GENERAL OVERVIEW

PERFORMANCE
MANAGEMENT
GENERAL UNDERSTANDING
BY LAITH H. ALZAHRANI

Performance management is not only a

method for me rather and out of experience it
forms almost 80% of any successful business
infrastructure. It is the art of how you can
manage your growth internally as well as the
measure of how close your business is to its
strategy. To be concise in this article I am
going to disclose a general understanding of
what is performance management and the
ways of its integration in your business.
Managing performance allows you to understand
your current position and progress and based on it
you will be able to control futuristic change and
anticipate potentials , threats and weaknesses. The
nearest example would be to our subject as imagine
you are going through weight loss program that
entitles you to run every day a non-determined
distance and based on that you will know how
successful you are by noticing the weight loss which
is in ( kg ) compared to the distance you ran where
you archive these results to understand your

progress and based on that you build your decision

of how many kilometers you are planning to run inorder to achieve more weight loss. That is in general
your personal weight loss performance
management you controlled your weight by
defining a measurable value that allows you to
understand your progress and the course of action
you took to achieve better results.
The example I discussed earlier gave us a general
brief idea of how to apply a simple performance
control task to successfully achieve a result. In
business it is almost similar if you can imagine the
small differences we can apply. The question that
we are going to ask ourselves basically how do I
know if my business on the right path ? what tells
me that am growing not losing ? what indicates to
me if I increased the number of clients ? and that is
where we are going to introduce the KPI term. KPI ,
stands for Key Performance Indicator , in-other
words ( kg ) that we lost while running. KPI allows
you to unify a specific progress or assets into a

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PERFORMANCE
MANAGEMENT

GENERAL OVERVIEW

PERFORMANCE
MANAGEMENT
GENERAL UNDERSTANDING
BY LAITH H. ALZAHRANI

recognizable unit allows you to understand your

current situation. Archiving KPI's helps a lot in
understanding your current position by comparing it
to past records and based on the results and course
of actions been taken in successful records you can
plan your future achievement.
For example, lets say that your company sells a
specific product not considering the source of the
product wether it was manufactured or resold, the
way to measure your success in this pattern follows
many approaches for instance setting a KPI for the
past 3 months inventory of that specific product in
unit and measure how many you sold out within a
month or setting KPI for the number of clients for
the past three months and compare the growth ( Ex.
June,2016 [31,3923 Client] , July,2016 [31,3400] Client
) as we can see the number of clients increased from
June to July and to plan for August you have
understand what course of action you took that
increased the number of clients within a month
therefore, you can apply it on August to set your
target .

Measuring success in KPI's follow many approaches

as I mentioned in the example above you can plan
ahead for the future based on your historical records
where you can set your Target and when it comes to
the end of August you will get the Real Value. Lets
say and based on the historical records your Target
is 31,3600 clients and when you achieved 31,550
clients , the question will be is this good ? is this
value considered as success or almost close to the
target ? These questions don't have to have an
answer rather the right question is what was my
strategy , as we all know strategy the approach of
what you plan to stand for formulated as Vision and
the means of reaching this vision is by following
studied patterns and approaches supported by tools
like project management customer relations
management etc. all under one title called Mission.
Therefore, for every action you take you are entitled
to acquire a strategy, to combine the introduction of
strategy we have mentioned and the Real Value we
achieved , it is obvious to understand that we need
to have a professional strategy that governs the rules
and patterns to be used during the month.

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PERFORMANCE
MANAGEMENT

GENERAL OVERVIEW

PERFORMANCE
MANAGEMENT
GENERAL UNDERSTANDING
BY LAITH H. ALZAHRANI

In the beginning of this article I have given a general

introduction about performance management later
I have mentioned examples that led us to the
understanding of KPI's and how do we consider
them as meter indicators to our success.
Performance management have much more than
that it is more about studying every single action inorder to achieve a milestone. The importance of the
logic that goes through the process of controlling
performance is not only by applying it but it takes
much more deeper understanding of how to
integrate such methodology and the complete
understanding of your business resources. Managing
performance is not your success or growth gateway
rather it is considered as an advantage factor that
helps you succeed by logically aiming for best and
understanding the worst situations to avoid them.
A very well known tool that allows you manage your
performance is called Balanced Scorecards or BSCs.
BSCs is based on four main perspectives that allows
to manage every single aspect of your resources if
you have the mentality, vision and complete

understanding of your business and the industry you

are involved in. The way to understand the four
perspectives differs from one person to another it all
depends on how you can combine the factors in
your way of thinking and based on the evidence you
have on the table.
The four perspectives of the BSCs revolve around the
main objective which is achieving our vision and
mission or in general our strategy. The strategy does
not have to be what the business is built on rather as
we mentioned in the earlier example it might refer
to the strategy you planned for achieving your KPI
target or achieving a specific point.
Perspectives are divided onto 4 main sectors
Customer Perspective where we have to understand
our customer satisfaction & retention as well as the
market share and brand strength. The other
perspective is Financial where we analyze and study
our revenue, expenses, net income, cash flow and
asset value. The third perspective concerns the
Learning / Growth Development which covers every

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PERFORMANCE
MANAGEMENT

GENERAL OVERVIEW

PERFORMANCE
MANAGEMENT
GENERAL UNDERSTANDING
BY LAITH H. ALZAHRANI

aspect regarding employees including their

satisfaction, turnover, skills and education. Last but
not least the perspective that involves every single
internal resource in your business like inventory,
orders, resource allocation, cycle time and quality
control they all listed under one title called Internal
Processes.
Integrating each perspective into your business
resources and processes assures that you will be
able to manage, control and anticipate your current
position and future success by allowing them to
work in coherent with your KPI's. There are many
tools and softwares in the technology market that
allows you to automate some of the processes
which will help you manage your business
performance and engages you with results and
records that helps you in your decision making
process.
Applying the perspectives with your personal
understanding of you business resources as well as
integrating the KPI's allows you to create a
connection that as we mentioned earlier all work

for the benefit of your business strategy. Lets say for

example that you own a small web hosting
company where from your in-house data centers
you offer plans and for clients to acquire a specific
amount of storage on a web server , mail server,
database server and you want to make sure your
quality of service and your up-time is always on the
spot. The way to apply the perspectives basically
remains in your pure understanding of your clients
requirements, level of experience that your
employees acquire, the processes that goes through
your data centers as well as ensuring your business
financial stability. The process follows this pattern
in-order to ensure your up-time and quality of
service to get customer satisfaction and increase
your clients will require you to keep your employees
up to date with the latest technologies and open to
set of knowledge base which in-return will ensure
the flexibility and adaptability with new updates
and upgrades of your business internal processes
and all can be achieved within the pure
understanding of your financial perspective
elements as well as the perfect understanding of
your customers feedback, suggestions and response.

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PERFORMANCE
MANAGEMENT

GENERAL OVERVIEW

PERFORMANCE
MANAGEMENT
GENERAL UNDERSTANDING

Each perspective mentioned in the example

discussed earlier require an indicator of progress
and strategy of growth and development with a
dedicated plan studied and applied to achieve the
quality of service. Applying such tools and
methodology will greatly help you compete in a
competitive market and ensures your strength when
it comes to the international market for the reason
that you are well aware and able to create critical
decision based on your business growth rate and
performance.
It is understandable that success in the current
market can not be achieved unless you are able to
understand the mentality and the mechanism of
your business resources and development and that
performance management is considered as the
main infrastructure of business growth and stability.
There are many softwares and tools that you can
relay on when it comes to control such elements of
your business but it is much more recommended
that you construct your very own business BSCs
system to ensure it fits perfectly with your business
understanding.

I have a passion in business and in development

being able to control every single resource in your
own business opens a lot of success doors"
"

By Laith H. Alzahrani
Mechatronics Engineer
Founder of eSmart MENA
http://esmrt.com
[email protected]
[email protected]
Linkedin : linkedin.com/in/alzahranilaith
Twitter : twitter.com/alzahranilaith