Performance Models

Introduction

This article introduces different models of organizational performance that have been researched over the past decades and the trend observed toward a better understanding of how individuals function and perform in groups.

When appropriately measured and condensed into results that can be used on a broad range of subjects related to a company’s strategy and day-to-day operations, the measures provide the new foundation for raising organizational performance to new levels.

Performance Models

An organizational performance can be approached through various models, which address aspects of its measurement and control on one hand, and its conceptualization on the other hand.

Until the 1980s, management control research had focused on performance measures with the cybernetic model, an extension of the more popular command and control model until the 1950s. Considering new individual and cultural aspects amid non-financial measures has allowed the holistic model to gradually overcome some limitations of the cybernetic model. Since the 2000s, thanks to capabilities from software platforms, the Internet, and later AI, the Management Control System (MCS) packages have integrated and powered management control systems in an integral system to manage organizations, most often in line with the holistic models. The three grand models are summarized in this table and detailed in separate articles.

Performance Management

Models	Focus
Command and Control	Traditional hierarchical top-down approach, with original management control systems for planning and controlling.
Cybernetic	Accounts for the first-order loop feedback, learning, and communication in addition to financial and production metrics.
Holisitc	Extends from the cybernetic model with the second-order feedback loop and emphasizes the relationships and interactions between the organization’s different parts, including its culture, vision, mission, and reward systems.

Regarding its conceptualization, several approaches have been proposed for categorizing performance depending on the context: research, societal, leadership, organizational development, etc.. For example, the models can be grouped into three categories based on their origins in economics, organizational, and social research. Others have suggested categorizing along the following three categories of objectives, systems, and stakeholders which is the one we adopted here. The value model was analyzed separately from the stakeholders model because it offers a distinct general overall understanding of how individuals and organizations behave. The non-performance model was added, which stands apart and continues to be a powerful model for understanding and managing performance. This grouping enables highlighting different analytical anchor points, limitations, and relations with management control systems.

Performance Conceptualization

Models	Focus
Objectives	Objectives are set and managed at different levels of the organization. Techniques such as cost-benefit analysis, management by objectives, individual criteria, or behavioral goals are used.
Systems	Systemic models emphasize the importance of an organization's means, such as inputs, outputs, resource acquisition, and processes. They include the operations research model, the structural contingency model, and the culturalist and social regulation models.
Stakeholders	Stakeholders' performance models emphasize the expectations of individuals and interest groups that are either within or surrounding the organization. It includes the organizational development model, satisfaction, and expectancy models.
Values	Value models extend from the stakeholder model to understand organizations based on individual values and preferences. The concept of values encompasses broad aspects of social behavior that, unlike others, can be described, measured, and shared.
Non-performance	It is easier, more precise, consensual, and beneficial to address performance issues by problems and faults rather than by skills and performance criteria.

Organizational performance models have grown over the years, not to supplant previous models but rather to refine them, better understand their scope, and create new models that better fit their times. Since the 2000s, with the Internet, and more recently with AI, our capacity to collect and analyze people's data has grown to incredible levels, and so has the capacity of management control systems, and our potential to better understand and manage people. How organizations can better perform over time remains a question tied to how people can better perform individually and in teams.

Individual Performance: The Adaptive Profiles

As the conceptualization of organizational performance and management control systems has greatly progressed over the past decades, so has the understanding of people and their management. Although taking more time than in technology, research in social science has had the chance to build, break, challenge, and test the limits of many models and techniques.

Adaptive profiles emerged from research in the 1950s in the USA and started to penetrate small and large organizations worldwide progressively. They measure how people perform in context—not if they perform, but how they perform.

The information is obtained from an assessment technique, which brings objectivity by applying statistics and removing important biases. The results are profiles that accurately depict with nuances the way people express, think, and feel about their behavior. The adaptive profiles also inform about people's adaptation and engagement, the conditions to avoid underperformance, and to maximize individual performance. At GRI, we have continued researching and refining the work initiated on these profiles and taken their use to adaptation and organizational performance levels. The adaptive profiles are discussed in great detail in other articles such as this one accessible here.

Today, markets are familiar with behavioral trait and type assessments that have been extensively used in recruitment and coaching. Adaptive profiles, however, are more recent and based on factors rather than traits and types. They exhibit different characteristics from those of other techniques. They help to rethink and enhance individuals' private techniques. They bring precision and additional benefits to numerous applications in recruitment, management, leadership, and organizational development.

Measuring Organizational Performance

The adaptive profiles also apply to positions, teams, companies, and even at industry and societal levels, representing the performance required in jobs and those occurring at group levels.

Performance models based on values include a behavioral component that makes them especially useful for practical applications and use in management control systems. Behaviors are observable. We can discuss and analyze them more effectively than abstract concepts that are inferred from observations. We can measure them as we do with adaptive profiles. At a company level, those aspects increase the chances of reaching consensus about what those behaviors are and what can be done with them to increase performance.

For organizations, the information from the adaptive profiles can be regrouped and compared with that of position and group profiles to measure and analyze performance..

Once a company's management has defined the behaviors required in the positions and teams, strategic indicators can formalize the intent and help manage the gap in people's performance over time. Social indicators follow the adaptation, and engagement of employees in the organization. See here in this article how the information is used to calculate strategic and social indicators.