Performance management includes activities which ensure that goals are consistently being met in an effective and efficient manner. Performance management can focus on the performance of an organization, a department, employee, or even the processes to build a product of service, as well as many other areas. Managing employee or system performance and aligning their objectives facilitates the effective delivery of strategic and operational goals. There is a clear and immediate correlation between using performance management programs and improved business and organizational results.
Performance measurement is the process of collecting, analyzing and/or reporting information regarding the performance of an individual, group, organization, system or component. It can involve studying processes/strategies within organizations, or studying engineering processes/parameters to see whether output are in line with what was intended or should have been achieved. Direct financial gains include growth in sales, reducing costs in the organization, stopping project overruns and aligning the organization directly behind the CEO's goals.