Performance management typically begins with the development of what?

The development of a strategic plan serves as the foundational step in performance management because it outlines the goals, objectives, and overall direction of the organization. A strategic plan provides a clear framework for what the organization seeks to achieve and sets the priorities that will guide decision-making and resource allocation.

By establishing the mission and vision, along with specific performance indicators that align with overall objectives, the strategic plan enables a structured approach to measuring success and progress in achieving desired outcomes. This planning process is essential as it ensures that all stakeholders are aligned towards common goals, making subsequent steps, such as performance reviews and budgeting, more effective and targeted towards achieving organizational success.

In contrast, other options like a financial audit, performance review, and budget proposal are important components of an organization’s operational processes but occur after the strategic direction has been established. They are tools that help in assessing and managing performance but are not the initial step in the performance management cycle.