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Finance & Accounting
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Ferreira & Otley's Performance Management Framework 2009 Name Institution Ferreira & Otley's Performance Management Framework 2009 Performance management refers to the process used within an organization to achieve set goals. Performance management entails the evaluation of costs and input within an organization to attain set goals (Diamond, 2006 p.
Studies have revealed that the simplification process has produced results that have not only been conflicting but also ambiguous. Due to the disadvantages stated above, Ferreira & Otley's formulated the performance management framework that clearly describes the operation and structure of performance management system. Researchers have emphasized that to obtain accurate results that are essential in developing skills and knowledge on management performance, it is important to use theoretical foundations. Managers of an organization need to select rational theories that will guide them when analyzing performance of an organization (Chapman, 2007p. 664). Performance management approach usually involves many processes that take place in an organization. These processes include analysis, measurement, control, and planning. The mechanisms employed in performance management systems are formal and informal controls. The controls are usually dependent on the size of the organization because larger firms use administrative controls (Margret, 2010 p. 210). Performance Management Framework by Otley’s In the year 1999, Otley developed a framework that was to provide a guideline in the study of the operations of management control systems. He focused on five areas that included identification of the main goals of an organization. ...
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