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
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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Herman Aguinis, University of Colorado at Denver
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
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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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Herman Aguinis, University of Colorado at Denver
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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Herman Aguinis, University of Colorado at Denver
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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