Performance Management and Strategic Planning

Executive summary

The essence of the present study is to establish ways in which the process of performance management and the link between performance management and strategic planning can be improved.

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To achieve this objective, 20 study participants from 10 organizations located within New York will be selected. To collect data, questionnaires will be administered, and content analysis adopted in order to analyze the data.

Introduction

Background information

Strategic planning and performance management are two of the essential considerations in the modern-day world in that they are used to shape the direction of organizational initiatives, as well as delivering maximized value for the shareholders. Researchers have defined strategic planning as an organizational process, which involves defining the direction of the business, and making decisions regarding the allocation of resources required to pursue that particular direction (Poister & Streib 2005).

On the other hand, performance management denotes a process through which managers, irrespective of the level, and employees work together in an effort towards planning, monitoring, and reviewing an employee’s work objectives, along with their overall contributions to the organization.

The context of each of the two concepts clearly defines why they are critical to organizational success. Additionally, as it has been discussed across research, the two concepts are often inextricably associated (Aguinis 2009). Corporate goals are usually established as part of the strategic planning process and accomplished by being cascaded down until they are assigned to individual workers. Such a process usually involves the setting of goals and objectives by an employee, which occurs in the performance planning stage of the performance management (Poister & Streib 2005).

The association between strategic planning and performance management has been attributed as essential, given the range of benefits, it presents an organization. For instance, it results in the creation of alignment between the corporate goals and those of the employees. At the same time, the link often allows the employees to have an understanding of the manner in which their individual goals contribute towards something bigger. In essence, the link often provides meaning to work (Bryson 2011).

Problem statement

As critical key success aspects, managers should focus on improving performance management, as well as the above-described link. Decision-makers should explore the various innovative approaches towards this in order to help an organization succeed about the purpose it serves (Poister & Streib 2005). While this is the case, organizations across the world have shown that they face a major challenge in identifying the most appropriate ways of causing such an improvement.

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The situation is worsened even further, considering that the current research in the area is lacking. Many researchers have increasingly adopted the performance management process and strategic planning as topics of interest. However, only a few studies have focused on how to improve the process of performance management and the existing link between the process and strategic planning, yet these are two essential areas whose consideration determines the direction of business organizations.

The focus of the study

The purpose of this study is to establish ways to improve the process of performance management alongside the link between the concept and strategic planning. In order to realize this particular objective, it is appropriate to develop a set of research questions. Below are the chief research questions, which the study will seek to explore or answer.

  • What ways can a company pursue to improve the process of performance management?
  • What approaches can be adopted to improve the link between performance management and strategic planning?

Significance of the study

Undertaking to conduct this study is critical since it will contribute immensely to the management field. The performance management process and the link between performance management and strategic performance are among the central success point. Improved performance management usually helps in raising the levels of employee attributes, such as motivation and commitment. On the other hand, since performance management is one of the integral processes of strategic planning, it follows that seeking to strengthen the link will lead to higher strategic outcomes.

Therefore, where the current study is successfully completed, organizations will be provided with information on how they can improve their performance management approaches and its link with strategic planning and thus achieving efficiency and effectiveness. Aside from this, the researcher will help in closing down the existing gaps in the field of management, especially with regard to the phenomena under study.

Literature Review

In an organization, the performance management process usually involves a given combination of activities ranging from the identification and prioritization of goals to intervention for creating improvements when necessitated. Majorly, the process focuses on the overall performance of a given unit. Armstrong and Baron (2000) expressed that a great essence ought to be assigned to the various activities that make up the process in order for an organization to effectively accomplish goals.

While the steps involved in the process usually vary across organizations, there is usually a common attribute in that those activities of higher priority are handed a special focus. In his study, Otley (2001) sought to explore the reason for differing steps in the performance management process in organizations. The study found that the requirements of an organization, along with the pattern of management working, are the chief determining factors. Armstrong and Baron (2005) also informed that while some organizations adopt the help of consultants, others employ their own internal experts who then undertake to engage in the performance management process-oriented activities.

In their study, Rummler and Brache (2012) explored the various characteristics of the performance management process. The researcher identified that one of the chief attributes is that the process is continuous, considering that it is often done throughout the year. A further core characteristic is the use of rankings and ratings. In order to conduct evaluations, repeated rankings and ratings are used for different activities, which constitute the process.

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When performing the assigned tasks, employees usually express their reactions, and this is what Armstrong and Baron (2000) acknowledge as behaviors towards work. Based on the organizational working environment, employees might depict responses related to commitment and satisfaction, among others. Nielsen and Ejler (2008) also identified the performance management process as a cooperative approach. The process usually involves different parties collectively engaging in regular discussions regarding accountabilities, responsibilities, performance appraisal, and standard performance expectations, among others (Nielseen & Ejler 2008).

Improving the process management process

Given the value attached to the performance management process, a plethora of researchers has conducted studies with the aim of establishing the manner in which the process of performance management could be improved. In a study by Folan and Browne (2005), the researchers evaluated the importance of providing employees with an opportunity to assess themselves as a way to improve the process. From this research, Folan and Browne (2005) found out that getting people’s inputs regarding their performance has the potential to open up lines of communication and, at the same time, allow managers to discuss the diverseness in perceptions and opinions between employees own assessments easily.

In another study by Moynihan (2008), it was established that seeking to gather information from various sources could be ideal in improving the process. It was established that rather than seeking to obtain feedback and inputs from the direct supervisor, asking those who interact with the employees to evaluate their performance, as well, could deliver huge improvement outcomes for the process. Moynihan (2008) recommended that managers should utilize customers, coworkers, team members, or any other person that regularly communicates with the employees in order to determine their strengths and weaknesses.

Aguinis (2009) mentioned that assisting the employees in understanding the manner in which their performance is often tied with the overall vision of the organization. From the results of his study, it was discussed that by letting an employee see the bigger picture, persistently reminding him or her on the mission of the company, and clarifying the way in which their contributions often help in fulfilling the strategies and goals of the business, it follows that he or she is provided with a sense of purpose in their work. As a result, the employee is likely to perform well in her jobs.

Improving the link between performance management and strategic planning

Poister and Streib (2005) revealed that the post-evaluation of strategic plans, along with budget plans, is one of the essential aspects of sound strategic planning and performance management system. On the one hand, the results of evaluation usually assist in assessing the success of the activities of the organization. Therefore, reviews often provide vital information on the performance of the employees and the organization in general.

Tapinos, Dyson, and Meadows (2005) added to this context relating that evaluation of a strategic plan is conducted periodically and the outputs of the process further used in planning activities, going into the future. According to Bryson (2011), given that sound evaluation helps in improving the link between strategic planning and performance management, there are a set of considerations that must be taken into account.

Foremost is the presence of data collection and recording systems. Moynihan (2005) identified that one of the chief elements of the sound evaluation process is a set of performance indicators. Analoui (2007) indicated that such indicators could offer a good and appropriate assessment tool of the organizational capacity. As a recommendation, the indicators have to be the same as those utilized in the planning activities.

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This, in turn, helps in making comparisons. A further consideration is the party conducting the evaluation and whether it is being done internally or externally (Hill & Jones 2007). Besides this, the intended use with regard to the information in the evaluation report is critical. In order to strengthen the link, it is necessary that the information provided during the evaluation activities be used in the future planning activities (Pollitt 2006). This helps in ensuring that efficiency is increased.

Planned methodology

Research approach and design

A qualitative approach will be followed. Kumar and Phrommathed (2005) defined a qualitative research as a process that involves exploring issues, understanding given phenomena and answering questions by seeking to analyze and make sense of unstructured form of data. An exploratory form of a survey was used, given the nature of the problem being studied. An exploratory survey is usually adopted in a case where a specified problem has not been clearly defined. Such a survey often helps a researcher to familiarize him or herself with the issue at hand, and then generate hypothesis to be tested.

The aim of the present research is to determine what ought to be done in order to improve performance management system, as well as, the link between performance management and strategic planning in the organization. To answer this research problem, it is necessary that the research adopt the use of exploratory research design.

Research Setting

The study was conducted in New York. The city is widely known as harboring among the most successful and aggressive organizations in the world with regard to managerial attributes. Such organizations include Google, Pricewaterhouse Coopers and Deloitte. Usually, most of the world leading companies have their power embedded in their management approaches. In this light, considering the aim of the study, a study of organizations within Ney York is likely to optimize the study outcomes.

Study population and sample

Patton (2005) defined a population as all elements, which meet the established sample criteria for inclusion in a given study. The study sample will be constituted of managers from different organizations based in New York. A convenient sample of 20 subjects will be selected from ten organizations. This means that each company will be represented by two managers. Selecting this particular sample usually mandate one to employ a random sampling method was used.

A random sampling is a procedure in which several subjects are drawn from a larger cluster. According to Peffers, Tuunanen, Rothenberger and Chatterjee (2007), in such an approach, each subject is selected entirely by chance, and that each member of the larger population usually has an equal chance of selection. In any given organization, there are several managers, who often participate in the process of performance management and strategic planning.

Considering that each company will have to select two managers, such a sampling method had to be employed. However, before selecting the sample, the researcher will approach the focus companies and seek approval to select a sample and conduct research using it. It will necessitate the researcher explaining the details of the research, which will include the intended purpose and how the successful completion of the project will be of beneficial use to them.

Sampling criteria

Sample selection will be in accordance with a given criteria, which is; for one to be selected, be must be exercising management roles. As such, one has to be actively involved in organizational processes such as performance management and strategic planning. Recruiting other people without knowledge on these scopes would hinder the realization of the goals of the study to be conducted.

Data collection

As it has been established earlier, the use of an exploratory survey will be used. This is an indication that the researcher will have to collect data, both primary and secondary. Primary data is the information, which is often collected right from immediate experience. On its part, secondary data refer to the information, which was collected and documented in a past study session. On one hand, primary data will be drawn from the study participants using questionnaires. On the other hand, secondary data will be achieved from the results of previous research studies relevant to the current problem. Such data will be necessary, as it will help in gaining insights and inferences, which will in turn assist in effectively solving the underlying problem.

Data collection instrument

Concerning data acquisition, a questionnaire will be used. Marczyk, DeMatteo and Festinger (2005) defined a questionnaire as a printed-self report, which has been designed with the aim of eliciting information that can be achieved through written responses from the subjects of study. Data will be collected using questionnaires to examine the perceptions of the study subjects regarding the ways to improve performance management and the link between the concept and strategic planning. The use of questionnaires has been decided upon given the range of benefits it presents a researcher with.

Among these include, the questionnaire as requiring a high rate of response since they are often distributed to the respondents and then collected by the researcher personally. A further core advantage is that they usually require less time and energy to administer and that they have a great essence of anonymity considering that the subject has the option of not filling out his or her name. While this is the case, several challenges, which the researcher will have to face with the use of questionnaires, exist. The most important of these is that the study subjects might not reflect their true opinions. There is a possibility that they may answer the questions in such a manner that appeals the researcher.

The questionnaires will be comprised of both closed and open-ended questions. Closed questions only require a study participant to answer yes or no answer while an open-ended question elicits an explanatory or expressive form of response.

The questionnaires will have two parts, A and B. The first part will carry questions, which aim at gaining or collecting demographic data, which includes age, job position and gender. The second section will be constituted by questions, which are more specific to the problems under study.

Data collection procedure

The researcher, to the study participants, will distribute the questionnaires personally. The process will take a period of four weeks. The first week will be for the research to distribute the questionnaires while the next two will be for the study participants to respond to the underlying questions. During the fourth week, the researcher will collect the filled questions so that the process of data analysis can commence.

Data analysis

Once the data has been gathered, it will be organized and then analyzed. Data analysis is a process used to denote as the systematic application of statistical and logical technique in order to describe, illustrate, and evaluate data. Data analysis usually assists in providing a method by which one can draw inferences from data. The method to be used for analysis is content analysis. Content analysis was defined by Noor (2008) to mean a systematic technique, which involves compressing a set of words into fewer categories of texts based on explicit coding rules. The analyzed data will be reported using graphs and pie charts. Such reporting is very essential, since it helps in clarifying on the results of the analysis.

Schedule for completion

Completion plan is a term commonly used to define a detailed timeline for completion of the research tasks, which remain for finalizing a dissertation. It often includes a brief description of strategies to be employed in order to overcome any perceived barrier, including logistical barriers. The following is the Completion Plan for the proposed study.

Stage of the project writing process Number of days/weeks needed Start date End date
Reading and research
a) Identifying an original and manageable topic 2 days 23/08/2014 25/08/2014
b) Approval of the topic by the University 1 day 26/08/2014 27/08/2014
c) Reading and research into the selected research topic 3 days 28/08/2014 30/08/2014
The detailed plan
a) Constructing a detailed project plan Half a day 31/08/2014 31/08/2014
Initial writing
a) Drafting the various sections of the project Half a day 31/08/2014 31/08/2014
b) Undertaking additional research where necessary 1 day 1/09/2014 2/09/2014
The first draft
a) Compiling and collating sections into initial project draft Half a day 3/09/2014 3/09/2014
b) Checking the project’s flow Half a day 3/09/2014 3/09/2014
c) Checking the project’s length Half a day 4/09/2014 4/09/2014
d) Undertaking any additional editing, as well as, research 1 day 5/09/2014 6/09/2014
Administering the study methodology
a) Identifying the study population 1 day 7/09/2014 8/09/2014
b) Requesting approval from identified companies 3 days 9/09/2014 11/09/2014
c) Designing questionnaires 3 days 12/09/2014 14/09/2014
c) Distributing the questionnaires 1 week 15/09/2014 28/09/2014
d) Filling of the questionnaires by the respondents 2 weeks 29/09/2014 12/10/2014
e) Collecting the questionnaires 1 week 13/10/2014 19/10/2014
Data Analysis, reporting and discussion of results
a) Analyzing the data Three days 20/10/2014 22/10/2014
b) Reporting Two days 23/10/2014 24/10/2014
f) Discussing the results Two days 25/10/2014 26/10/2014
Final draft
a) Checking for errors 1 day 27/10/2014 28/10/2014
b) Preparing for submission 1 day 29/10/2014 30/10/2014
c) Final proof-reading and final editing 1 day 31/10/2014 1/11/2014
d) Compiling a bibliography 1 day 2/11/2014 3/11/2014
e) Getting the project bound 1 day 4/11/2014 4/11/2014
f) Submitting the project 1 day 5/11/2014 5/11/2014

References

Aguinis, H. (2009), Performance management, Pearson Prentice Hall, Upper Saddle River, NJ.

Analoui, F. (2007), Strategic human resource management, International Thomson Business Press, Stamford, CT.

Armstrong, M. & Baron, A. (2000), “Performance management,” Human resource management, vol. 12, no.3, pp. 69-84.

Armstrong, M. & Baron, A. (2005), Managing performance: performance management in action, CIPD Publishing, London, UK.

Bryson, JM. (2011), Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement, John Wiley & Sons, London, UK.

Folan, P. & Browne, J. (2005), “A review of performance measurement: Towards performance management,” Computers in Industry, vol. 56, no. 7, pp. 663-680.

Hill, C. & Jones, G. (2007), Strategic management: An integrated approach, Cengage Learning, Belmont, CA.

Kumar, S. & Phrommathed, P. (2005), Research methodology, Springer US, New York, NY.

Marczyk, G., DeMatteo, D. & Festinger, D. (2005), Essentials of research design and methodology, John Wiley & Sons Inc, London, UK.

Moynihan, DP. (2005), “Goal‐based learning and the future of performance management,” Public Administration Review, vol. 65, no. 2, pp. 203-216.

Moynihan, DP. (2008), The dynamics of performance management: Constructing information and reform, Georgetown University Press, Washington, D.C.

Nielsen, SB. & Ejler, N. (2008), “Improving performance? Exploring the complementarities between evaluation and performance management,” Evaluation, vol. 14, no. 2, pp. 171-192.

Noor, KB. (2008), “Case study: a strategic research methodology.” American Journal of Applied Sciences, vol. 5, no. 11, p. 1602.

Otley, D. (2001). “Extending the boundaries of management accounting research: developing systems for performance management,” The British Accounting Review, vol. 33, no.3, pp. 243-261.

Patton, M.Q. (2005), Qualitative research, John Wiley & Sons, Ltd, London, UK.

Peffers, K., Tuunanen, T., Rothenberger, MA. & Chatterjee, S. (2007), “A design science research methodology for information systems research,” Journal of management information systems, vol. 24, no. 3, pp. 45-77.

Poister, TH. & Streib, G. (2005), “Elements of strategic planning and management in municipal government: Status after two decades,” Public administration review, vol. 65, no. 1, pp. 45-56.

Pollitt, C. (2006), “Performance management in practice: a comparative study of executive agencies,” Journal of Public Administration Research and Theory, vol. 16, no. 1, pp. 25-44.

Rummler, GA. & Brache, AP. (2012), Improving performance: How to manage the white space on the organization chart, John Wiley & Sons, London, UK.

Tapinos, E., Dyson, RG. & Meadows, M. (2005), “The impact of performance measurement in strategic planning,” International Journal of Productivity and Performance Management, vol. 54, no 5/6, pp. 370-384.

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