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Performance Management and Strategic Performance Management and Strategic Planning: OverviewPlanning: Overview
Definition and Purposes of Strategic PlanningLinking Performance Management to the
Strategic Plan– Strategic Planning – Developing Strategic Plans at the Unit Level– Job Descriptions– Individual and Team Performance
Building Support
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Strategic Planning: Definition Strategic Planning: Definition
• Process– Describe organization’s destination– Assess barriers– Select approaches for moving forward
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Strategic Planning: GoalStrategic Planning: Goal
• Allocate resources – to provide organization – with competitive advantage
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Strategic Planning: PurposesStrategic 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
(continued on next slide)
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Strategic Planning: PurposesStrategic Planning: PurposesProduce an organizational culture of
cooperationAllow for the consideration of new options
and opportunitiesProvide employees with information to direct
daily activities
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Strategic Planning : OverviewStrategic Planning : Overview
1. Environmental Analysis2. Mission3. Vision4. Goals5. Strategies
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Environmental AnalysisEnvironmental Analysis
Identifies external and internal trends• To understand broad industry issues• To make decisions using “big picture” context
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External trendsExternal 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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External trends – External trends – Factors to ConsiderFactors to Consider
• Economic• Political/legal • Social
• Technological• Competitors• Customers• Suppliers
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Internal trendsInternal 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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Internal trends – Internal trends – Factors to ConsiderFactors to Consider
• Organizational structure• Organizational culture• Politics• Processes• Size
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Gap AnalysisGap Analysis
Analyzes:External environment (opportunities and threats)
vis-à-visInternal environment
(strengths and weaknesses)
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Gap analysis determines:Gap analysis determines:
Opportunity + Strength = Leverage
Opportunity + Weakness = Constraint
Threat + Strength = Vulnerability
Threat + Weakness = Problem
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Strategic Planning for the OrganizationStrategic Planning for the Organization
Environmental and Gap Analyses provide information for organizations to decide:Who they areWhat they do
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MissionMission
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?
Prentice Hall, Inc. © 2006 Herman Aguinis, University of Colorado at Denver
Mission Statement contains: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
Prentice Hall, Inc. © 2006 Herman Aguinis, University of Colorado at Denver
Mission Statement Mission Statement maymay contain: contain:
B. Information on organization’s values and beliefs Managerial philosophy Public image sought by organization Self-concept of business adopted by
Employees Stockholders
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VisionVision
• 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:A Good Vision Statement is:
BriefVerifiableBound by a TimelineCurrent
FocusedUnderstandableInspiringA stretch
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Purposes for Setting GoalsPurposes 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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StrategiesStrategies
• Create strategies or Game Plans or “How to” procedures to address issues of:– Growth– Survival– Turnaround– Stability– Innovation– Leadership
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How the HR Function contributes:How the HR Function contributes:
• Communicate knowledge of strategic plan• Provide knowledge of KSAs needed for
strategy implementation• Propose reward systems
Prentice Hall, Inc. © 2006 Herman Aguinis, University of Colorado at Denver
Strategic Plans at the Unit LevelStrategic Plans at the Unit Level
• Organization Mission statement, Vision statement, Goals, and Strategies
Must clearly align withAnd be congruent with
• Every Unit Mission statement, Vision statement, Goals, and Strategies
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Alignment of Strategic Plan with Alignment of Strategic Plan with PerformancePerformance
Organization’s Strategic PlanMission, Vision, Goals, Strategies
Unit’s Strategic PlanMission, Vision, Goals,
StrategiesJob Description
Tasks, KSAs
Individual and Team PerformanceResults, Behaviors, Developmental Plan
Critical to involve all levels of management
Critical to involve all employees
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Job DescriptionsJob 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 PerformanceIndividual and Team Performance
Organization and Unit mission, vision, goals lead toPerformance management system, which
Motivates employees Aligns development plans with organization priorities
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Strategic Plan Strategic Plan Choices in PM System DesignChoices 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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Building Support – Building Support – Answering “What’s In It for Me?”Answering “What’s In It for Me?”
• Top Management: – Help carry out vision
• All levels: – Involvement – Participation – Understanding