Performance Management System

Creating organizational focus, strategic alignment, and a shared mental model


Performance Management System 5 elements


Vadim Kotelnikov

Manage performance to create greater value and measure what you value to discover new ways to create a greater value.

Vadim Kotelnikov, founder of 1000ventures - personal logo VadiK

Inventor Business e-Coach

Author Innoball

Founder Innompic Games icon



When a performance management system is operated effectively, there are great benefits for both individuals and organizations. It creates organizational focus and alignment and a shared mental model for developing, leading and managing the business in a way that converts strategic objectives into effective and synergistic business practices.




Design a Useful Performance Management System




Jack Welch advice business quotes

Stretch! We have found that by reaching for what appears to be the impossible, we often actually do the impossible.

Jack Welch




① Set Objectives: decide on what you want to achieve and set stretch goals

② Empower People: develop employees, help them grow, and give people the tools and the support and encouragement to improve their performance

③ Measure: decide how to measure performance against these objectives

④ Provide Feedback: tell people how well they are doing

⑤ Reward People: build performance into the reward system


Successful Company

Performance-based Company

Performance Management



Effective KPI

Benefits of Gain Sharing




Akio Morita advice quotes Sony

Management of an industrial company must be giving targets to the engineers constantly.

Akio Morita




Set Right Objectives

Setting right objectives is critical for effective performance management. Such objectives as higher profits, shareholder value, customer experience, customer satisfaction may be admirable, but they don't tell employees what to do. "They fail to specify priorities and focus. Such objectives don't map the journey ahead the discovery of better value and solutions for the customer," says Fred Wiersema, the author of Customer Intimacy.


Balanced Business System

Strategic Intent

Stretch Goals


Cross-functional Management

2 Categories of Goals



Successful Performance-based Company performance management system  

The objectives must be:

→ focused on a result, not an activity

→ consistent

→ specific

→ measurable

→ related to time

→ attainable




Balance 10 Major Tensions within Your Firm

1. Bottom-line and top-line growth

2. Long-term growth opportunities and short-term results

3. Higher profits and social responsibility... More