PERFORMANCE
MANGEMENT AT THE ORGANTIONAL LEVEL
Mission statements
The start of the performance management process is the formulation of a
mission statement. This is a succinct definition of the overall purpose of the
organization, setting out clearly what it is there to and achieve.
A mission Statement is defined
as an announcement of what your business does today and why it
exists.
Value statements
The purpose of a value statement is to help develop
a value-driven and committed organization that conducts its business
successfully by reference to shared beliefs and an understanding of what is
best for the enterprise.
Value statements set out how the
organization intends to achieve its mission as in the following statement of
values for a software company: How we accomplish our mission is as important as
the mission itself. Fundamental to success for the company are these basic
values:
v People
v Product s
v Customers
v profit
Critical success factors
Critical success factors indicate those
areas of corporate performance that are vital to the successful accomplishment
of the organization’s mission. Critical success factors will, of course, vary
considerably from organization to organization.
v product development – the ability to develop innovative
products to meet current or anticipated needs;
v market development – the capacity to make markets and
increase market share;
v process innovation – the ability to develop new
manufacturing processes and systems that will improve productivity and quality
and reduce operating costs;
v customer service – the ability to meet customer needs
and to deliver improved standards of customer service;
v human resources – the ability to obtain and retain
high-quality people with distinctive capabilities who will deliver added value;
v Asset utilization – the optimization of working capital,
including inventory, and the profitable use of capital assets.
Strategies
Strategies are declarations
of intent. They define the direction in which the organization is going in
order to achieve its mission. Corporate strategies
for long-term growth, increased
profitability and product market development, diversification,
acquisition, investment and disinvestment;
v Marketing
v Operations
v Research and development
v Human resources
v Finance
v IT
Objectives
Objectives can be set out under
the following headings:
v financial – targets for profit, added value,
sales revenue, overhead rates, return on capital employed, economic value
added, earnings per share etc;
v product/market development – projects for new or improved products
or services or new markets;
v operational development – projects for the development of new systems
and processes;
v performance improvement – targets for productivity, cost
reduction, stock turn etc;
v growth – acquisitions, mergers, joint ventures
etc;
v People – strategies for making the
organization a compelling place to work.
The objective of organization must be SMART.
Organizational performance measures
It is necessary to measure
achievements and progress against objectives, and organizations have therefore
to decide what measures should be used.
The key measures are likely to
include those concerned with:
v Financial
v Operational
v People
performance.
Their original concept of the scorecard
required managers to answer four basic questions, which means looking at the
business from four related perspectives.
1- How do customers see us?
2- What must we excel at?
3- Can we continue to improve and create value?
4- How do we look at shareholders?
The organization has to make mission, vision, core
values and to set critical success factors then organization has to make
strategies that define that in which direction to move to achieve the
organization mission then next step is setting of objectives these include management,
operational, functional and performance improvement etc. It is necessary to
measure achievements and progress against objectives, and organizations have
therefore to decide what measures should be used. Then Performance management
is a matter of developing plans to achieve objectives, putting them into
action, measuring and obtaining feedback on results and reviewing achievements
in order to modify plans or take corrective action as necessary.
The Sears performance model
This model is divided into main three factors.
1. A compelling
place to work
A compelling place to work is which
fulfils the all requirements of the workers.
now the worker will do job with satisfaction, result is greater work
speed, heavier out come, best use of time, saving of raw materials and good
quality products. Under such environment the worker will pay deep attention
toward his job, he will prefer to work in the firm than others; he will show
great interest to see his organization as a developed, trustable and impressive
among the customers.
2. A compelling
place to shop
Employees behavior definitely
affects the standards of products .products manufactured under high quality
standards, become a hot cake to sell. Nicely prepared item, with no flaws,
packed with care are sold easily in the market. In this way some organization
can get the place ‘’A compelling place to shop’’.
3.
A Compelling place to invest
When a manufacture’s team is efficiently
working and producing items as per customer’s requirements .luckily the items
are holding god impression on the users.
The user not only uses these items himself but also recommends
others. As well as he keeps the items in
use for a long time so the demand of the specific item prevails so long. This
situation will encourage the investor to invest more.
That’s why it is emphasizes the importance of employee attitude
and behavior in making the firm ‘a compelling
place to shop’ and ultimately ‘a compelling place to invest.
IMPROVING INDIVIDUAL PERFORMANCE
The University of Bath People and
Performance Model (Purcell and colleagues) states that performance is a function
of ability + motivation + opportunity. To improve performance, therefore, attention has to be paid to
Performance
= Ability + Motivation + Opportunity
These three points are very important for performance, missing a single
point out of three, individual cannot produce the required performance or
outcome e.g if a person has ability and opportunity but no motivation then rest
of the factors are in vain. Combination of these points in individual will
produce best results.
The following factors are
also very important for the improvement of individual performance.
·
Discretionary
behavior
·
Relation
with workers
·
Policies
and practices
·
Line
manager role
Performance management provides a valuable platform
for doing this.
Essentially, the approach covers seven
steps:
1. Select the goal – establish priority areas for action.
2. Define expectations –
targets and standards.
3. Define performance measures –
the basis upon which progress to achieving the goal can be monitored.
4. Plan the improvement programmed.
5. Act – implement the improvement
programmed
6. Monitor – review progress and analyze feedback to ensure the target or standard is achieved.
7. Extend the process – continue
the development programmed as required.
The role of top manager to improve individual performance
To improve organizational, team and individual performance top management needs to focuson developing a high-performance culture. The characteristics of such a culture are:
1. A clear line of sight exists between the strategic aims of the organization and those of its departments and its staff at all levels;
2. Leadership from the top that engenders a shared belief in the importance of continuous improvement;
3. Focus on promoting positive
attitudes that result in a committed, motivated and engaged
workforce.
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