The State of Kansas (2008) lists the Performance Planning process as the first step in a performance management system. It defines Performance Planning as the establishment of an organisation’s performance objectives for the following year. 
At the beginning of each performance management cycle, managers should establish strategic objectives for their division to achieve. You may refer to our previous article on strategic direction for more tips on establishing relevant objectives.
Once an organisation has defined their corporate objectives, as well as a specific set of KPIs, its managers should establish a performance management system to drive their employees towards strategic goals.
Performance management systems allow organisations to establish a working environment that maximises employee performance. With an emphasis on leadership and development, effective performance management models empower employees to achieve the organisation’s objectives. 
Once an organisation has determined its value proposition, it may select KPIs that are aligned with its financial objectives. Financial KPIs allow managers to determine if their organisation is generating sufficient revenue and profits. 
In order to remain competitive, an organisation should analyse its mission, identify its stakeholders, and define its goals. In addition, it needs to establish Key Performance Indicators (KPIs) to measure its corporate progress. In this article, we'll introduce the fundamental characteristics of effective KPIs.
According to Kaplan and Norton, who have published an article in an issue of the Harvard Business Review, an organisation may use frameworks, systems and processes to devise strategies that would enable them to remain competitive in the marketplace.