Introduction
Organizational performance management is a significant activity because it can directly affect a company’s success. When businesses and their employees face emerging and unpredictable situations and challenges, performance management helps address the issues (Sherafat & Elahi, 2018). Furthermore, the concept under analysis contributes to the fact that organizations can achieve their goals and missions (Sherafat & Elahi, 2018). That is why organizations should do their best to ensure that they correctly approach their performance management. The following slides will present more detailed comments regarding what organizational performance methods are suitable for various companies and how an organization’s size can impact the choice of a particular performance management approach.
Using Performance Measurements
Performance measurements are significant elements because they lead to a multidimensional evaluation of organizational performance. The balanced scorecard (BSC) is a requested example of performance measurements and includes a few advantages. This performance management tool is useful because it helps turn a company’s strategic goals into specific performance objectives (Vărzaru, 2022). The BSC is additionally effective because it promotes digital transformation by focusing on innovation. Finally, Yazdi et al. (2022) stipulate that the selected tools can facilitate “a better understanding of the various performance factors and strategies and thus create a competitive advantage” (p. 2). This information demonstrates that the BSC can provide companies with a few essential benefits.
Relying on a Market-Oriented Approach
In turn, market orientation is a different approach that can help businesses improve their organizational performance. In particular, the leading goal of this method is to establish a superior value for customers (Borodako et al., 2022). This focus is placed on the current and potential clients, which allows companies to highlight the improvement of their organizational performance. In addition to that, Rodrigues and Martins (2020) stipulate that market orientation is effective since it develops sales capabilities. When companies focus on their clients and competitors, they better understand how to increase sales. Simultaneously, customer value creation is possible because every employee comprehends the importance of this activity and knows how to contribute to achieving the task.
Comparing the Two Approaches
Even though the two approaches above, BSC and market orientation, lead to significant advantages, they are different. On the one hand, the BSC is a more compressive approach because it focuses on four dimensions, including financial, customer-centric, internal process, and learning and growth areas. On the other hand, market orientation draws attention to creating value for customers, which will promote sales. That is why it is impossible to mention which method is better or more effective. These findings indicate that organizations should utilize the two approaches in combination to achieve the best outcomes. In this strategy, organizations can ensure that their management approach addresses the internal processes and contributes to gaining a competitive advantage in the market.
Performance Management & Organization Size
The size of an organization can significantly affect what performance management should be used. In particular, various sizes imply that a company can have significantly different numbers of employees. Thus, if a particular performance management approach is suitable for companies with 30 employees, this strategy should be carefully applied to corporations with thousands of workers. It is even more likely that a performance management method that is effective for small companies can be useless for large organizations. The rationale behind this statement is that a higher number of employees implies that an organization deals with more processes and volumes of data. That is why it is necessary to focus on how many employees a business has when selecting a performance management method.
When the connection between organization size and performance management is analyzed, it is necessary to draw attention to the fact that large organizations are more likely to have higher revenues. A more massive capital, in turn, allows these businesses to invest more financial resources in facilitating processes and activities. Consequently, more profitable organizations are more likely to invest more resources and efforts in managing their organizational performance more professionally. According to Borodako et al. (2022), performance management is a significant activity that forces companies to allocate physical and financial resources. Thus, there is no doubt that large companies can have better opportunities to cope with performance management more successfully.
In addition to that, a business size directly impacts what organizational structure is employed in this particular entity. As a rule, large corporations rely on more complex structures since a higher number of departments and, therefore, governance levels are found (Ongena & Ravesteyn, 2019). Consequently, large organizations are forced to spend more effort managing their organizational performance. The state of affairs is significantly different for smaller businesses that have fewer employees and departments. Simpler and more straightforward structures imply that such companies have fewer departments, which denotes that organizational management is easier in such businesses. That is why one can firmly acknowledge that an organization’s size can denote whether a company requires a complex or straightforward organizational management approach.
Performance Management in Large Organizations
When large organizations are under analysis, one should acknowledge that appropriate performance management approaches are needed. Firstly, such companies are typically said to have more resources and, therefore, more opportunities to invest higher sums of money in relying on professional strategies and interventions (Ongena & Ravesteyn, 2019). Secondly, the previous slides have already demonstrated that large organizations have more complex structures. That is why such businesses can benefit from management by inquiry, which implies that top executives and middle management attend regular meetings to assess organizational and employee performance. This information clearly demonstrates that large organizations are expected to invest more time and effort in managing organizational performance successfully (Ongena & Ravesteyn, 2019).
Performance Management in Small and Medium-Sized Organizations
Performance management experienced significant changes during the COVID-19 pandemic. Since a significantly higher number of employees engaged in remote working, different principles should have been prioritized to monitor their performance. The article by Suresh et al. (2021) investigates how small and medium-sized organizations responded to the challenge. The most significant aspect was to ensure that tasks were performed and deadlines were met (Suresh et al., 2021). In addition to that, employees should be provided with appropriate recognition and rewards so that they are sufficiently motivated to achieve the expected performance standards. This information demonstrates that small and medium-sized organizations should improve their individual employee performance to reach organizational goals.
Comparison of Organization Sizes
The analysis of the available information demonstrates that performance management in small and medium-sized organizations is easier because such companies have a few advantages. Firstly, smaller companies are more flexible, which implies that it is possible to test various performance management approaches and choose the most appropriate one (Ongena & Ravesteyn, 2019). Secondly, such businesses rely on informal communication channels inside organizations (Ongena & Ravesteyn, 2019). This fact denotes that less formal management interventions can be effective. Finally, Ongena and Ravesteyn (2019) stipulate that smaller organizations are less subject to bureaucracy, which demonstrates that performance management is easier, more straightforward, and more effective in these companies compared to large businesses.
Conclusion
The current paper has overviewed the organizational performance management area and has come across a few important conclusions. In particular, a balanced scorecard is an effective performance measurement tool that allows organizations to analyze a comprehensive picture and transform strategic goals into performance objectives. This and other performance measurements should be used in combination with market-oriented approaches because the latter promotes sales and creates superior value for customers. Furthermore, the presentation has found that an organization’s size can significantly affect performance management. Thus, this process is easier and more effective in small and medium-sized companies because they are more flexible, rely on informal communication channels, and are less subject to bureaucracy.
References
Borodako, K., Berbeka, J., Rudnicki, M., Łapczyński, M., Kuziak, M., & Kapera, K. (2022). Market orientation and technological orientation in business services: The moderating role of organizational culture and human resources on performance. Plos one, 17(6), e0270737. Web.
Ongena, G., & Ravesteyn, P. (2019). Business process management maturity and performance: A multi group analysis of sectors and organization sizes. Business Process Management Journal, 26(1), 132-149. Web.
Rodrigues, G. P., & Martins, T. S. (2020). Sales capability and performance: Role of market orientation, personal and management capabilities. RAM. Revista de Administração Mackenzie, 21(4), 1-29. Web.
Sherafat, S., & Elahi, A. A. K. (2018). Developing a model for alignment between individual and organizational performance management and organizational objectives. Journal of Human Resource Management, 21(2), 49-57.
Suresh, A., Vigneshwar, K. R., & Priyadarshini, R. G. (2021). Measures taken by small and medium size organizations to manage performance during Covid crisis effectively. Abhigyan, 39(2), 19-28.
Vărzaru, A. A. (2022). An empirical framework for assessing the Balanced Scorecard impact on sustainable development in healthcare performance measurement. International Journal of Environmental Research and Public Health, 19(22), 15155. Web.
Yazdi, A. K., Mehdiabadi, A., Hanne, T., Sarfaraz, A. H., & Yazdian, F. T. (2022). Evaluating the performance of oil and gas companies by an extended Balanced Scorecard and the hesitant fuzzy best-worst method. Mathematical Problems in Engineering, 2022, 1-21. Web.