Unit- 3.Performance Management and strategic Planning

Herman Aguinis, University of Colorado at Denver

PERFORMANCE MANAGEMENT AND

STRATEGIC PLANNING

Prof. Preeti BhaskarSymbiosis Centre for Management Studies, NOIDA

Herman Aguinis, University of Colorado at Denver

Strategic Planning: Definition

• Process• Describe organization’s

destination• Assess barriers• Select approaches for moving

forward

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Herman Aguinis, University of Colorado at Denver

Goal of Strategic Planning:

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Allocate resources to provide

organization with competitive advantage

Herman Aguinis, University of Colorado at Denver

Strategic Planning: Purposes Help define the organization’s identity Help organization prepare for the future Enhance ability to adapt to environmental change Provide focus and allow for better allocation of

resources Produce an organizational culture of cooperation Allow for the consideration of new options and

opportunities Provide employees with information to direct daily

activities

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Herman Aguinis, University of Colorado at Denver

There was a good strategic planning in

most of the organization , but there is no clear relationship between Organizational Level and individual level

goals.There is a need to link the strategic planning

with individual goals

Herman Aguinis, University of Colorado at Denver

Alignment of Strategic Plan with Performance

Critical to involve all levels of management

Critical to involve all unit head &

department head

Herman Aguinis, University of Colorado at Denver

Resent study including 338 organization in 42 countries

found performance management is the 3rd most important factor affecting

success of a strategic plan.

Herman Aguinis, University of Colorado at Denver

Linking among organization , Unit strategic Plan , Job

Description and individual and Team

BANK OF UTAH Washington, United States

Herman Aguinis, University of Colorado at Denver

Mission statement: The mission of the corporation is to operate as a High performing financial institution providing a

wide range of profitable Competitive and superior financial services in our market

Goals: To attract and retain an outstanding staff who are

highly motivated and productive and who vigorously pursue revenue – generating and Costs-reduction

strategies

Strategy: Critically reviews out existing branches and departments to Ensure that all branches are

consistent in their goals, strategies, And profit objectives.

Herman Aguinis, University of Colorado at Denver

Mission (Department Level):

Increase the Knowledge, management skills and Decision- making abilities of our branches

Managers so that we will minimize losses and other operating

expenses. While maximizing the profitability of our branching

systems.

Herman Aguinis, University of Colorado at Denver

Position Description for HR Manager

Administers A comprehensive human resources program in the division to ensure the expertise, effectiveness, motivation, and

depth ( including providing appropriate management succession) to the

division’s staff members.

Herman Aguinis, University of Colorado at Denver

Individual Performance:

Information on various responsibilities, standards

expected, goals to be reached, and actions to be taken to improve

performance in the future..

Herman Aguinis, University of Colorado at Denver

Steps require for successful Strategic Planning

Herman Aguinis, University of Colorado at Denver

Environmental Analysis

Identifies external and internal trends

• To understand broad industry issues• To make decisions using “big picture”

context

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SWOT AnalysisSWOT Analysis

Herman Aguinis, University of Colorado at Denver

External trends• Opportunities:

• environmental characteristics that can help the organization succeed

• Threats: • environmental characteristics that can prevent the

organization from being successful

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Factors to Consider

• Economic• Political/legal • Social

• Technological• Competitors• Customers• Suppliers

Herman Aguinis, University of Colorado at Denver

Internal trends• Strengths:

• internal characteristics that the organization can use for its advantage

• Weaknesses:

• internal characteristics that can hinder the success of the organization

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Factors to Consider• Organizational structure• Organizational culture• Politics• Processes• Size

Herman Aguinis, University of Colorado at Denver

Gap Analysis

Analyzes:External environment

(opportunities and threats)

vis-à-vis

Internal environment(strengths and weaknesses)

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Gap analysis determines:

Opportunity + Strength = Leverage

Opportunity + Weakness = Constraint

Threat + Strength = Vulnerability

Threat + Weakness = Problem

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Herman Aguinis, University of Colorado at Denver

Strategic Planning for the Organization

Environmental and Gap Analyses provide information for organizations to decide:

Who they areWhat they do

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Mission

A good mission statement answers:Why does the organization exist?What is the scope of the organization’s

activities?Who are the customers served?What are the products or services offered?

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Herman Aguinis, University of Colorado at Denver

Mission Statement contains:A. Information on organization’s Basic product/service to be offered Primary market/customer groups Unique benefits and advantages of

product/services Technology to be used Concern for survival through growth and

profitability

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B. Information on organization’s values and beliefs Managerial philosophy Public image sought by organization Self-concept of business adopted by

Employees Stockholders

Herman Aguinis, University of Colorado at Denver

Vision• Statement of future aspirations• Focuses attention on what is important• Provides context for evaluating• Opportunities• Threats

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A Good Vision Statement is:

Brief Verifiable Bound by a Timeline Current

Focused Understandable Inspiring A stretch

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Purposes for Setting Goals• Formalize expected achievements• Provide motivation• Provide tangible targets • Provide basis for good decisions• Provide basis for performance measurement

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Strategies• Create strategies or Game Plans or “How to”

procedures to address issues of:• Growth• Survival• Turnaround• Stability• Innovation• Leadership

Herman Aguinis, University of Colorado at Denver

How the HR Function contributes:

• Communicate knowledge of strategic plan

• Provide knowledge of KSAs needed for strategy implementation

• Propose reward systems

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Herman Aguinis, University of Colorado at Denver

Strategic Plans at the Unit Level

• Organization Mission statement, Vision statement, Goals, and Strategies

Must clearly align with………And be congruent with……

• Every Unit Mission statement, Vision statement, Goals, and Strategies

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Job Descriptions

• Tasks and KSAs are congruent with Organization and Unit strategic plans

• Activities described support mission and vision of Organization and Unit

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Individual and Team Performance

Organization and Unit mission, vision, goals lead to

Performance management system, whichMotivates employees Aligns development plans with organization

priorities

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Herman Aguinis, University of Colorado at Denver

Strategic Plan Choices in PM System Design

• Criteria (Behavior vs. Results)• Participation (Low vs. High)• Temporal Dimension (Short Term vs. Long

Term)• Level of Criteria (Individual vs.

Team/Group)• System Orientation (Developmental vs.

Administrative)• Rewards (Pay for Performance vs.

Tenure/Position)

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Herman Aguinis, University of Colorado at Denver

Building Support – Answering “What’s In It for Me?”

• Top Management: • Help carry out vision

• All levels: • Involvement • Participation • Understanding

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