PERFORMANCE MANAGEMENT

AND
STRATEGIC PLANNING

Prof. Preeti Bhaskar

Symbiosis Centre for Management Studies, NOIDA
Herman Aguinis, University of Colorado at Denver

Strategic Planning: Definition

Process
Describe organizations
destination
Assess barriers
Select approaches for moving
forward

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Goal of Strategic Planning:

Allocate resources
to provide
organization with
competitive
advantage
Prentice Hall, Inc. 2006
Herman Aguinis, University of Colorado at Denver

Strategic Planning: Purposes

Help define the organizations 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

Prentice Hall, Inc. 2006

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
There is a need to link the strategic planning
goals.
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 Decisionmaking 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
divisions 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

SWOT Analysis

Identifies external and internal

trends
To understand broad industry issues
To make decisions using big picture
context

Prentice Hall, Inc. 2006

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

Factors to Consider
Economic
Political/legal
Social

Technological
Competitors
Customers
Suppliers

Prentice Hall, Inc. 2006

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

Factors to Consider

Organizational structure
Organizational culture
Politics
Processes
Size

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Gap Analysis

Analyzes:
External environment
(opportunities and threats)

vis--vis

Internal environment
(strengths and weaknesses)

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Gap analysis determines:

Opportunity + Strength = Leverage
Opportunity + Weakness = Constraint
Threat + Strength = Vulnerability
Threat + Weakness = Problem

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Strategic Planning for the Organization

Environmental and Gap Analyses
provide information for organizations
to decide:

Who they are

What they do

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

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

A. Information on organizations
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
B. Information on organizations values and beliefs
Managerial philosophy
Public image sought by organization
Self-concept of business adopted by
Employees
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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
A Good Vision Statement is:
Brief
Verifiable
Bound by a Timeline
Current

Focused
Understandable
Inspiring
A stretch

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Purposes for Setting Goals

Formalize expected achievements

Provide motivation
Provide tangible targets
Provide basis for good decisions
Provide basis for performance measurement

Strategies
Create strategies or Game Plans or How to
procedures to address issues of:
Growth
Survival
Turnaround
Stability
Innovation
Prentice Hall, Inc. 2006
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

Prentice Hall, Inc. 2006

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

Prentice Hall, Inc. 2006

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

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver

Individual and Team Performance

Organization and Unit mission, vision, goals lead
to
Performance management system, which
Motivates employees
Aligns development plans with organization
priorities

Prentice Hall, Inc. 2006

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)
Prentice Hall, Inc. 2006
Herman Aguinis, University of Colorado at Denver

Building Support

Answering Whats In It for

Me?

Top Management:
Help carry out vision
All levels:
Involvement
Participation
Understanding

Prentice Hall, Inc. 2006

Herman Aguinis, University of Colorado at Denver