Strategic Management of Performance: An Examination of Public Sector Organizations in the United Arab Emirates Kasim Randeree, University of Oxford, Said Business School, UK Hind Al Youha, The British University in Dubai, United Arab Emirates Abstract: This paper outlines a mechanism jor the development and tmplementation of a strategic performance management framework within government departments in the United Arab Byairates (UAB). The work also addresses corporate per formance management for governmental organtzations dealing with service and operations with the aim of evaluating existing performance management systerns and identif ing major issues ad challenges affecting thetr tmplementation. This research has enabled the identification of the most appropriate systems and indicators for uttlization withen all ‘government divisions. Thus, through the use ofeffective performance management systems, ant orgart- tation can develop performance related strategies and generate accurate and thmely reports pertinent to organtzational management activities. Consequently, organtzational leaders and senior managers care equipped for decision-making based on proper measures, with the atm of boosting organizational efficiency and productivity Keywords: Performance, Strategy, Management, UAE Introduction and operation management, and 2) applied performance measures are inadequate ‘The research thus focuses on corporate performance management for organizations’ service and operations. The main aim of the research was to evaluate existing per- formance management systems in government organizations in the UAE and to identify the major issues and challenges that are affecting the implementation of performance systems ‘The paper also suggests amechanism for building and implementing a strategic performance management framework in government organizations through the analysis of current per- formance management methodology specifically in Dubai Government and suggests the best tool and indicators that can be used for all government organizations This paper aims to benefit newly established organizations and highlights areas for im- provement in existing organizations by providing detailed procedures and critical success factors for establishing a performance management system in organizations. The main ob- jectives ofimplementing a strategic performance management in government organizations are as follows T: PAPER HYPOTHESIZES that 1) there is alack of alignment between strategy + Review and assess new strategic planning methodology. conducting areview and assess- ment of the current strategic planning process to identify rationale and understand per- formance drivers while providing an assessment of the tool mapping requirements ‘The Intemational Journal of Knowledge, Culture and Change Management COMMON Vohune 9, Nene 4.2009, itplhvweiamgenentfoumaicom, 65n 1479524 Q Saou No (© Cones Ground, Kasim Radeve, Hid Al Yous, All Right Reserved, Psion g-nipponi@commrongroungublihing comTHE INTERNATIONAL JOURNAL OF KNOWLEDGE, CULTURE AND CHANGE MANAGEMENT + Develop performance management framework: develop a structured methodology for identifying critical performance drivers and definition of appropriate performance measures * Develop performance management methodology: develop a guidebook to explain the methodology to users. + Develop performance management templates: develop templates required to enable the ‘management and reporting of the new performance management methodology. ‘The research focused on performance management in government organizations, performance management frameworks, obstaclesin goverment organization that affect the implementation of performance management and measurement tools. The literature review has therefore been divided into four parts, namely, management control systems, performance management in the public sector, strategic performance management and strategic performance manage- ment frameworks Difficulties were faced when conducting the literature review particularly in searching for materials about local governments adopting performance management. This is because performance system is normally adopted in the private sector and government organizations do not believe they add value. Another obstacle was in finding interviewees from top man- agement or middle management who are aware about the performance system concept. Fi- nally, few government organizations that have amoderate understanding about performance management are not in favor of sharing their experience with researchers However, designing and implementing a performance management system would support government organizations in the delivery of services in a more effective and efficient way and would improve staff motivation and involvement as they will be rewarded on higher performance and achievement. Such a performance system would also lead to transparency as the activities are linked with employees in the hierarchy, thus, each will be responsible about the tasks. Moreover, govemment organizations would be forced to plan more rigorously, particularly in linking their articulated objectives with programs, measurements and targets, resulting in better utilization of budget and resources. Management Control System ‘A management control system concentrates on financial and non-financial performance measurements, The financial aspect is clear, relating to monetary and fiscal transactions of government departments. Non-financial aspects are quality, reputation, customer service and employee behavior in the organization. Overall, all departments can be considered as being on a ‘performance improvement wheel’ that aids in developing the current results or performance, whether they be financial or non-financial in nature. The management control system that is established, must be implemented in all functions, including understanding the market, developing and communicating organizational values, building and adapting a delivery system and upgrading implemented performance management systems (Anthony & Govindarajan, 2001). 124KASIM RANDEREE, HIND AL YOUHA Performance Management in Government Sector ‘The public sectoriis facing extraordinary pressure to change the way it manages performance. This presents government departments with opportunities and challenges involved in achieving a new approach to performance management, There are anumber of factors that are forcing organizations in the Arab world to become more focused on performance from the point of view of their customers and key stakeholders, This major transformation can be achieved by lessons leamed from public sector organizations elsewhere that have already undergone such a transformation. All growing public sector organizations must be interested in developing and deploying effective performance management systems. This is because only through such systems can they continue to ensure outstanding performance and provide their communities with high quality services and products. Government organizations must develop and execute strategic plans that demonstrate their commitment to enhancing the quality oftheir services and thereafter evaluate the performance to ensure future best practice Strategic plans are thus the starting point for an effective performance management system as they establish organizational goals and objectives, define how an organization intends to achieve those goal and demonstrate measurement parameters on performance (DCA, 2000, Kanakri, 2005 and Sanderson, 2001). Strategic Performance Management Corporate performance management is one of the latest strategic mechanisms for measuring the results of an organization’s functionality in the light of organizational interaction with surrounding elements of intemal and extemal environment. Organizational performance is an outcome of the sum total performance of individuals in an organization, which reflects the performance of organizational units, which in turn reflects the performance of the organ- ization. Therefore, organizational performanceis a an aggregation of individual performance impacted on the working units systems and programs. Consequently, this reflects how the organization is performing in achieving maximum production with minimum cost, in less time and at an appropriate level of quality. The work units performance is measured through various indicators that cover economic, political, social and environmental aspects. There are other extemal factors that influence the performance of work units, such as government policies and industrial changes (DCA, 2001 and RTA-2, 2006). Furthermore, performance management is a mechanism to measure Key Performance In- dicators (KPI’s) of an activity that is critical to the success of an organization. Hence, KPIs will differ depending on the nature of products or services and organizational objective. ‘Thus, selectivity is needed in identifying appropriate KPls for implementation and measure- ment ‘The performance mechanism enables alignment of the objectives with the mission, vision and processes that deliver the desired results. It also helps in cascading actions to deliver objectives, assists with reporting systems which track progress against objectives and take corrective actions, provides a benchmarking tool to compare against best practice and utilizes a continual improvement cycle. Finally, performance management is used to provide a practical action plan by setting out an approach for managing the transformation of perform- ‘ance management for emphasis on strategic goals and performance improvement (Johnson & Scholes, 2002 and Boume et al, 2003). 125