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Performance management is all about managing the activities that generate results. Those activities should directly support the organization's strategic objectives. Therefore, a good plan acts as a road map, showing the organization how it should move from its current level of performance to the desired level of performance, based on the perceived economic environment. The plan accounts for the activities, dependencies, assumptions, time scales, and resources necessary to support an overall strategic objective. Budgeting is part of a larger, closed-loop process called "performance management." Performance management is a holistic approach to the way organizations direct and manage resources to achieve objectives. In the context of performance management, budgeting's central role is to support execution through the allocation of resources to the activities that drive value. |
