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Performance Management Supports Continuous Accounting

Continuous improvement is a pillar of continuous accounting – an approach to managing finance and accounting organizations that makes improving the department’s effectiveness practical by increasing its efficiency. A business culture that has embraced and internalized continuous improvement sets increasingly rigorous objectives, reviews performance vis-a-vis those objectives and makes addressing shortcomings a departmental priority.

Performance management is a discipline that supports continuous improvement by quantifying all relevant measures used in evaluations. Performance management uses quantified measurement to assess how well individuals or groups are performing. It is an outgrowth of Peter Drucker’s concept of “management by objectives” (MBO), a focus of his 1954 book The Practice of Management. While conceptually sound, MBO proved unworkable in mid-century corporations because technology couldn’t collect and process relevant data quickly enough to reliably measure performance. Only within the past decade have systems advanced enough to make this approach is practicable. Today’s systems can collect the right data and communicate it in a timely fashion, in the appropriate context, to make continuous improvement an attainable goal. As Drucker observed, “What gets measured gets improved.”


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