Getting Performance from Performance Management: A Framework for Strategic Management Choices

Abstract

The choices for optimal performance management depend upon the circumstances – there is no single ideal management approach. The principals have three basic tools available to encourage high performance from subordinate entities: they can delegate authority, impose rewards or sanctions, and/or develop (or enhance) a performance measurement system. These tools allow the principals to motivate, delegate, educate, reevaluate, and/or reassign the agent in order to generate increased learning and improved outcomes from the program. Thus, depending on the nature of the agency culture and the quality of the performance measures, different managerial responses will have different results.

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