Definition of performance management, and how the theories shaped the performance measurements in business management

Performance management is the process of setting goals, monitoring progress, and evaluating the performance of individuals, teams, and organizations. It involves the systematic measurement of performance against predetermined objectives and the identification of areas for improvement.

There are several theories that have shaped the way performance measurements are conducted in business management. One such theory is the Goal-Setting Theory, which suggests that setting specific and challenging goals can motivate individuals to perform better. This theory emphasizes the importance of clear and measurable objectives in performance management.

Another influential theory is the Expectancy Theory, which posits that individuals are motivated to perform well when they believe that their efforts will lead to desired outcomes. This theory highlights the importance of aligning performance measures with rewards and incentives to enhance motivation and performance.

The Balanced Scorecard is another theory that has had a significant impact on performance measurements in business management. It suggests that performance should be evaluated based on multiple dimensions, including financial, customer, internal processes, and learning and growth perspectives. This theory emphasizes the need for a balanced