# Monitoring and Controlling Project Performance

> Chapter 16 of the Courseiva PMI-PMP curriculum — https://courseiva.com/learn/pmi-pmp/monitoring-and-controlling-project-performance

**Official objective:** 2.10 — Monitor and control project work, performance, and changes.

## Introduction

How do you know if your project is actually going well, or if it is secretly falling apart? This is the problem that monitoring and controlling project performance solves. For the PMP exam, this is where you prove you can catch problems early, manage changes without chaos, and keep the project aligned with its original goals.

## The Kitchen Remodel Analogy

Have you ever tried to get a new kitchen built while you are still living in the house?

You have a plan: new cabinets, granite countertops, and a fancy island. The work starts. The contractor rips out the old sink, and suddenly the plumber says the pipes behind the wall are corroded. They will need to be replaced, which costs an extra £1,500 and adds three days. You did not plan for that. This is exactly the moment when you have to monitor and control the project.

In a kitchen remodel, you are not just standing there watching the workers. You are checking progress against the schedule every morning. You are looking at the budget every time someone asks for more money. When the plumber finds a surprise, you decide: do you approve the change, or do you tell them to patch it and move on? That decision is a "change control" action. You also need to know if the whole project is still on track. If one delay pushes the tiling, you have to re-sequence the work. If the cost overrun eats into your contingency fund, you adjust the spending plan.

Monitoring and controlling is the act of constantly comparing what is actually happening against your plan, spotting the gaps, and making real-time decisions to keep the project from derailing. Without this, you end up with a half-finished kitchen and no money left for the fridge.

## Core explanation

Monitoring and Controlling is the fourth of the five Process Groups in project management. It runs in parallel with the entire Execution phase and continues until the project closes. Think of it as the dashboard in a car. You do not just press the accelerator and close your eyes. You constantly check the speedometer, the fuel gauge, and the warning lights. If the temperature gauge climbs, you ease off or pull over. If you are low on fuel, you plan a stop.

In project management, the "dashboard" is a collection of tools and processes that compare actual performance against the plan. The plan includes the Project Management Plan, which is the master document that contains the schedule, budget, scope, quality standards, and resource allocations. The actual performance data comes from Work Performance Data — raw measurements like how many tasks were completed today, how much money was spent, and how many hours the team logged.

The core purpose of this process is to identify variances. A variance is any difference between what you planned and what is happening. If you planned to finish 10 tasks this week and only finished 7, you have a schedule variance. If you budgeted £50,000 for materials but have already spent £60,000, you have a cost variance. Monitoring and Controlling is about catching these variances early, analysing their impact, and deciding what to do.

A key concept here is integrated change control. When a variance is significant, or when someone requests a change to the project (like adding a new feature), you cannot just say yes or no on a whim. You must evaluate the change's impact on all parts of the triple constraint: scope, schedule, cost, quality, resources, and risk. This evaluation is done by the Change Control Board (CCB), a group of stakeholders who have the authority to approve or reject changes. Approved changes then update the Project Management Plan and the project baselines.

Why does this exist? Without monitoring and control, projects spiral out of control. Missing a delivery date by a week might seem small, but if nobody tracks it, that week can turn into a month. Overspending by 5% on one line item can eat up the entire contingency reserve — the buffer of money set aside for "unknown unknowns." Monitoring and controlling replaces guesswork with data. It replaces reactive firefighting with proactive decision-making.

What does it replace? In old-school project management, people often managed by walking around and asking "how is it going?" That approach is unreliable because nobody wants to deliver bad news. Formal monitoring replaces that with objective metrics. Earned Value Management (EVM) is a specific technique within this process that compares the value of work completed against the actual cost and the planned schedule. It gives you numbers like CPI (Cost Performance Index) and SPI (Schedule Performance Index) that tell you with mathematical precision whether you are over budget or behind schedule.

For the PMP exam, you need to understand the main outputs of this process: change requests, work performance reports, and updates to the project documents and plan. You also need to know the tools: variance analysis, trend analysis, earned value analysis, and the change control tools built into a project management software system. The exam loves to test your ability to recognise when a change request is needed, and what the correct sequence of steps is for integrated change control.

## Real-world context

Imagine you are a project manager at a mid-sized insurance company. The company is building a new customer portal where clients can file claims online. Your team includes four developers, one designer, one tester, and a cloud engineer. The project has a budget of £350,000 and a deadline of nine months. You are now in month five.

Every Monday morning, you run a meeting called the "weekly status review." For that meeting, you need Work Performance Data. The developer team lead tells you that the claims submission module is 80% complete. The tester reports that they found 12 bugs this week, 8 of which are resolved. The cloud engineer says the test environment is up but one load balancer is misconfigured. You take these raw facts and turn them into Work Performance Information. For example, if the claims module was supposed to be 90% complete by now, you have a 10% schedule variance. You calculate that 10% of the remaining work means an extra week of effort.

You then update the Earned Value report. Your Planned Value (PV) at month five is £200,000. Your Earned Value (EV) — the value of work actually done — is only £180,000. Your Actual Cost (AC) is £195,000. Your CPI is EV/AC = 0.92, meaning for every pound you spend, you get only 92 pence of value. You are over budget. Your SPI is EV/PV = 0.90, meaning you are at 90% of the planned progress.

You present these numbers at the weekly meeting. The stakeholders ask: what are you going to do? You have options. You can submit a change request to add more budget or extend the schedule. You can also re-allocate resources — maybe pull a developer from a less critical feature to help the claims module. You choose to submit a formal change request to the Change Control Board, asking for a one-week extension and a £15,000 budget increase.

The CCB meets. They review your impact analysis. They note that without the extension, quality will drop because the tester will be rushed. They approve the change. You then update the project baseline — the schedule and budget — to reflect the new approved plan. The team gets back to work, and you continue monitoring.

This scenario is repeated weekly. You also produce monthly Performance Reports that show trend lines: is the CPI getting worse or better? Is the team completing more or fewer story points per sprint? These reports are shared with senior management so they have visibility into the project's health.

Key tools an IT professional uses daily in this process:
- Project management software like Jira or Microsoft Project to track tasks and progress
- Timesheets to capture actual hours worked
- A change log to track every change request and its status
- A risk register to monitor whether identified risks are happening
- A dashboard that displays EVM metrics in real time

## Exam focus

The PMP exam tests Monitoring and Controlling heavily because it is where a project manager earns their pay. Expect at least 30% of your questions to come from this area. The exam loves the following specific concepts:

- Integrated Change Control: The sequence is non-negotiable. Someone requests a change. The project manager evaluates impact. The Change Control Board (CCB) approves or rejects. Only then do you update the plan and implement. Any answer that skips impact analysis or the CCB is wrong.

- Earned Value Management (EVM): Memorise the formulas. CPI = EV / AC. SPI = EV / PV. EAC = BAC / CPI (this is the forecast at current efficiency). Trap: they will give you a scenario where both CPI and SPI are below 1.0, and ask if the project is over budget and behind schedule. The answer is yes. Trap: they will give you a scenario where CPI is 1.2 but SPI is 0.8, and ask whether you should crash the schedule. The correct answer is to consider crashing only if the sponsor agrees to the cost increase.

- Variance Analysis: The exam loves to ask: "What should you do first when you discover a variance?" The first step is always to analyse the variance to understand the root cause. Not to immediately request more budget or to fire someone.

- Performance Reporting: Know the difference between Work Performance Data (raw numbers), Work Performance Information (processed data with context), and Work Performance Reports (formal summaries for stakeholders). The exam will test your ability to identify which level of reporting is needed in a given situation.

- Change Log: Every change request must be logged. No change is too small. The change log is a project document, not part of the Project Management Plan.

- Preventive vs. Corrective Action: Preventive action is doing something to avoid a future variance. Corrective action is doing something to fix a variance that has already happened. The exam will give you a scenario and ask which type of action is needed.

- Trap: In a question about a change request, the answer that says "implement the change if it is small" is wrong. Even small changes go through the CCB if they affect the baseline.

- Trap: Questions that say "the project is on track, but the customer requests a new feature." The answer is always to submit a formal change request. Never implement without approval.

- Key definitions to memorise:
  - Baseline: The approved version of the plan that you compare against
  - Contingency reserve: Money set aside for known risks
  - Management reserve: Money set aside for unknown risks, requires sponsor approval to use
  - Re-baselining: Updating the baseline after significant approved changes

## Step by step

1. **Collect Work Performance Data** — Gather raw data on what is actually happening in the project. This includes completed tasks, hours worked, costs incurred, bugs found, and materials used. This data comes from timesheets, task tracking tools, and status reports from the team.
2. **Analyse Variances** — Compare the collected data against the baselines in the Project Management Plan. Calculate schedule variance (SV = EV - PV) and cost variance (CV = EV - AC). Use trend analysis to see if variances are getting better or worse over time. This step identifies where the project is deviating from the plan.
3. **Evaluate Change Requests** — When a change is proposed — by a stakeholder, a team member, or as a result of a variance — you must perform an integrated impact analysis. Determine how the change will affect scope, schedule, cost, quality, resources, and risk. Document the analysis and submit it to the Change Control Board.
4. **Approve or Reject Changes** — The Change Control Board reviews the analysis and decides. They can approve the change, reject it, or ask for more information. Only approved changes are implemented. The decision is recorded in the change log.
5. **Update the Baselines and Plans** — Once a change is approved, update the Project Management Plan and all affected baselines (schedule baseline, cost baseline, scope baseline). Communicate the new baselines to the team and stakeholders. This ensures everyone is working from the same approved plan.
6. **Produce Performance Reports** — Create formal Work Performance Reports that summarise the project's health. Include EVM metrics, variance analysis, trend graphs, and a forecast of future performance. Distribute these reports to stakeholders and senior management for visibility and decision-making.

## Comparisons

### Work Performance Data vs Work Performance Information

**Work Performance Data:**
- Raw, unprocessed facts such as hours logged or tasks completed
- No context or analysis attached
- Collected daily from timesheets, task boards, and reports

**Work Performance Information:**
- Processed data with analysis, such as variance percentages
- Provides context and meaning for decision-making
- Produced weekly by the project manager for stakeholders

### Corrective Action vs Preventive Action

**Corrective Action:**
- Done after a variance has already occurred
- Aims to bring performance back in line with the plan
- Example: adding resources to catch up a late task

**Preventive Action:**
- Done before a variance occurs
- Aims to prevent a potential deviation from the plan
- Example: training the team on a new tool to avoid delays

### Contingency Reserve vs Management Reserve

**Contingency Reserve:**
- Money set aside for known risks that have been identified
- Controlled by the project manager
- Can be used without sponsor approval for approved risks

**Management Reserve:**
- Money set aside for unknown risks that were not identified
- Controlled by senior management or the sponsor
- Requires sponsor approval before it can be used

## Diagram

_The flow of monitoring and controlling: from collecting data, through variance analysis, to change control decisions, and back to continuous monitoring._

```mermaid
flowchart TD
    A[Collect Work Performance Data] --> B[Analyse Variances]
    B --> C{Variance Detected?}
    C -- Yes --> D[Perform Impact Analysis]
    D --> E[Submit Change Request to CCB]
    E --> F{CCB Approves?}
    F -- Yes --> G[Update Baselines and Plan]
    F -- No --> H[Log Rejected Change]
    G --> I[Implement Change]
    I --> J[Monitor Again]
    C -- No --> J
    H --> J
```

## Common misconceptions

- **Misconception:** Monitoring and controlling only happens at the end of a phase or when a milestone is reached. **Reality:** Monitoring and controlling is a continuous activity that happens throughout the entire project execution phase, often daily or weekly. (Many beginners think of project reviews as big formal events, but real monitoring is the regular small checks that catch problems early.)
- **Misconception:** If a change is small and the sponsor agrees informally, you can skip the formal change request process. **Reality:** Every change that affects the baselines (scope, schedule, cost) must go through integrated change control, no matter how small. Verbal approval is not enough. (People want to avoid paperwork, but skipping it leads to scope creep and undocumented decisions that cause chaos later.)
- **Misconception:** Earned Value Management is just about tracking how much money has been spent. **Reality:** EVM compares the value of work completed (Earned Value) against both the planned value and the actual cost. It tells you about schedule and cost performance together. (The word 'value' tricks people into thinking it is only about cost, but it is a combined metric of progress and spending.)
- **Misconception:** A high CPI (e.g., 1.2) is always good news, meaning the project is under budget. **Reality:** A high CPI can mean the work is cheaper than planned, but it could also mean the work is not being done to the required quality, or that tasks are being skipped. Always investigate the root cause. (Beginners see a number above 1.0 and assume everything is fine, forgetting that quality and scope must also be verified.)
- **Misconception:** The project manager can approve their own change requests without the CCB. **Reality:** The project manager can approve changes that do not affect the baselines (e.g., changing a team meeting time). Any change that touches scope, schedule, cost, or quality requires CCB approval. (This misconception comes from confusing operational decisions with project control decisions. The PM has authority within limits, but baseline changes are higher-level.)
- **Misconception:** Monitoring is the same as reporting — as long as you send a status report, you are monitoring. **Reality:** Monitoring includes analysing data, making decisions, and taking action. Reporting is just one output. If you send a report but do not act on the variance, you are not controlling. (Passive reporting feels productive, but controlling requires active decision-making and follow-through.)

## Key takeaways

- Monitoring and controlling is a continuous process that runs throughout the entire project execution phase, not a one-time review.
- Integrated change control requires evaluating every change request for its impact on scope, schedule, cost, quality, resources, and risk before approval.
- Earned Value Management uses CPI and SPI to measure cost efficiency and schedule efficiency with mathematical precision.
- The first step when a variance is detected is always to analyse the root cause before taking corrective or preventive action.
- Work Performance Data is raw measurements; Work Performance Information is analysed data; Work Performance Reports are formal summaries for stakeholders.
- A change request that affects the project baselines must always go through the Change Control Board, regardless of how small the change seems.
- The contingency reserve is for known risks; the management reserve is for unknown risks and requires sponsor approval to use.
- Re-baselining is only done after significant approved changes, not for every small variance.

## FAQ

**What is the difference between monitoring and controlling in project management?**

Monitoring is the act of collecting data and comparing it to the plan — it is about seeing what is happening. Controlling is taking action based on that data, such as approving a change request or re-allocating resources to fix a variance.

**Do I need to use Earned Value Management on every project?**

No, EVM is a formal technique best used on large or complex projects. For smaller projects, simpler tracking methods like budget tracking and milestone checks may be sufficient. The PMP exam tests your understanding of EVM even if you do not use it daily.

**Who sits on the Change Control Board?**

The CCB typically includes key stakeholders such as the project sponsor, the project manager, a senior user representative, and sometimes experts in risk, finance, or quality. The exact members are defined in the project's governance plan.

**Can I approve a change myself as the project manager?**

You can approve changes that do not affect the baselines, such as changing the order of internal meetings. Any change that impacts scope, schedule, cost, or quality must go through the CCB. Check the project's change management plan for your specific authority limits.

**What does a CPI of 0.85 mean?**

A Cost Performance Index (CPI) of 0.85 means that for every pound spent on the project, you are getting only 85 pence worth of work completed. You are over budget by 15%. You need to investigate the cause and consider corrective action or a change request for more budget.

**What is the difference between a corrective action and a preventive action?**

Corrective action is done to fix a variance that has already occurred — for example, adding a developer to catch up a delayed task. Preventive action is done to avoid a future variance — for example, scheduling extra testing to prevent quality issues later.

## Check your understanding

1. **What is the first step you should take when you discover a cost variance of £10,000 on your project?**

   Answer: Analyse the variance to determine the root cause. Do not immediately request more budget or take corrective action until you understand why the variance occurred.

2. **Your project has a CPI of 0.9 and an SPI of 1.1. What does this tell you about the project's performance?**

   Answer: The project is over budget (CPI < 1.0) but ahead of schedule (SPI > 1.0). You are spending more than planned, but you are completing work faster than planned.

3. **A stakeholder asks for a minor change to the project scope. The change will not affect the budget or schedule. Should you implement it immediately?**

   Answer: No. Even small changes to scope must go through the formal integrated change control process and be approved by the Change Control Board if they affect the scope baseline.

4. **What is the difference between a change request and a corrective action?**

   Answer: A change request is a formal proposal to modify the project baselines. A corrective action is a specific action taken to bring future performance back in line with the plan, often resulting from an approved change request.

5. **Your project's Earned Value (EV) is £50,000, Planned Value (PV) is £60,000, and Actual Cost (AC) is £55,000. Calculate the Schedule Performance Index (SPI) and Cost Performance Index (CPI).**

   Answer: SPI = EV / PV = 50,000 / 60,000 = 0.83 (behind schedule). CPI = EV / AC = 50,000 / 55,000 = 0.91 (over budget).

---

Interactive version with quiz and diagrams: https://courseiva.com/learn/pmi-pmp/monitoring-and-controlling-project-performance