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.
Behavioral 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.

Centrality of Social Behaviors

Performance models based on actions and values include a behavioral component that makes them especially useful for research and practical applications. Behaviors are observable. We can discuss and analyze them more effectively than abstract concepts, increasing the chances of reaching consensus about what they are and what can be done with them. Behaviors are also a fundamental component of the personality concept. Behavioral traits and typologies have been extensively studied and used, both in recruitment and coaching. The behaviors that people value, are interested in, and will most likely express, also inform us about how they function and can perform.

Being capable of analyzing behaviors using different models at the individual, team, company, and societal levels uncovers a limited set of behavioral factors. When combined, these factors can help explain behaviors; at GRI, we estimate that up to 90% of observable behaviors in organizations can be explained by four factors. As science progressed, so has our sophistication in analyzing and assessing people and in modeling and representing their behaviors.

Organizational Performance

Adaptive profiles, as we measure them at GRI and show in this example here on the right, accurately account for how people perform in context. The metrics represent, in a condensed way, how someone thinks, feels, and behaves. The three relate to each other. In other words it’s how someone functions based on what they think and feel about how they act. The metrics are people’s mindset about their preferences, interests, values, how they socialize, and communicate.

With adequate content and statistics, the metrics also apply to positions, teams, companies, and even at a societal level. When provided in a condensed way, the results can be learned, memorized, and used— or in short, make sense— in multiple situations, where they can bring their value.

The adaptive profile is produced by answering two questions and applying statistics. If you see this profile for the first time, it will not tell you much. It is shown here only to illustrate what it looks like.

At an organizational level, the information from the adaptive profiles is regrouped and compared with that of position and group profiles for measuring and analyzing performance.