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MANAGING PERFORMANCE IMPROVEMENTTOVEY/UREN/SHELDON
OVERVIEWPart A: Planning Performance
1. Setting goals for the organisation2. Key performance indicators3. Operational plans
Part B: Performance Management4. What is performance standard?5. Principles of setting performance standards6. Monitoring performance7. Analysing performance8. Preparing to appraise performance9. Appraising performance10.Improving performance11.Unsatisfactory performance12.Skills for managing performance
Part A – Planning Performance
How to manage individual performance so that organisation obtains max productivity from staff at low costs with quality, efficient & be competitive in the market.
Continuous learning and improvement important for organistions & its workers.
According to Karpin Report – job creation depends on better management skills, flexibility of organisation stems from management and its skills in managing people within diverse & highly competitive environment that are likely to be in constant change.
Managers must therefore focus on the performance of people as organisational asset, rely on output measure to assess staff and develop new techniques for improve performance.
What is a manager?
Managers manage other to achieve outcomes or results through others – use few technical skills and more interpersonal & conceptual skills.
Fig A.1 –Skills required at different levels of management
First Line management : conceptual/Interpersonal/technical related skills
Middle management : conceptual/Interpersonal/technical related skills
Senior management : conceptual/Interpersonal/technical related skills
Top Level management : conceptual/Interpersonal/technical related skills
Fig A.2 Characteristics of the Ideal Manager
1. People skills2. Strategic thinker3. Visionary4. Flexible and adaptable to change5. Self management6. Team Player7. Ability to solve complex problems & make decisions8. Ethical/high personal standards
According to the Report training of managers dropped by 0.3% to 29% - this shows lack ofurgency and implementing recommendations of the report. Without proper training, managers will fail in their roles.
MANAGEMENT
Gardner & Palmer propose 3 perspectives of management.
Fig A.3 – Three perspectives on management
Administrative – use of classical management systems like division of labour & formal organisation structures
Political – process that resolves conflicts between stakeholders in & out of the organisation. People within the organisation have different power bases & ways of acting and compete with each other for resources and rewards. It accounts how people feel andvalue their relationships that are formed.
Cultural – refers to purpose of beliefs and values within and how things are done in an organisation.
Defining performance management & performance appraisal
Performance management – powerful tools linking employees responsibilities with
that of the team and overall organisation.
Done by setting & monitoring objectives on an ongoing basis which provides a
snapshot towards strategic plans and objectives.
The Performance Management Institute of Australia (PMIA) defines:
Performance management – the process of setting and monitoring measures and
objectives for employees, managers and executives. It is a closed loop process
meaning that objectives are constantly reviewed and performance diaries are
maintained by the employee and manager, which detail ongoing successes and
challenge.
Performance appraisal – the process that identifies, evaluates and develops
employees performance to meet employee and organisational goals.
The Global Economy – 1/3In today’s global economy competition is forcing a link between employers and employees making ways for flexible ways of developing people & managingPerformance.
Organisations are having flatter management compared to the older hierarchies.
Customers/Clients are becoming more demanding and in terms of quality and otherrequirements.
Hence training forms an integral part of this process.
The global financial crisis 2008/9 – felt by many – forced to downsized – organisation need to utilize performance management information to assist in the downsizing operations has become more apparent.
The Global Economy – 2/3Karpin Report identified 6 critical areas to improve skills:
1. Increase levels of education & training2. Use development processes rather than short courses to develop skills3. Management development – focus on future skills required4. Handle the transition from specialist to manager more effectively.5. Specifically link management development to strategic business directions.6. Evaluate the effectiveness of management development activities.
The Global Economy – 3/3Karpin identified new profile for 21st century manager: (known as leader or coach)
1. Flat structures with team leaders reporting to senior management directly.2. Values of the role including performance management, facilitation, participation and
empowerment of other team members.3. Working environment emphasizing best practice, benchmarking, quality and customer
service.4. Most managers having at least TAFE (Technical And Further Education) level
qualification or a degree.5. 100% managers having formal training for the position.6. Regular in company training for further learning.
Other soft skills need to be developed: communication, negotiation, counselling, listening, delegating and managing conflict.
Training & DevelopmentEmployees need different knowledge and skills to cope with 21st century. They have to develop skills faster and be more flexible , adaptable and multi-skilled than before. The considerable change in relation to work means the future is difficult especially where specific skills will be needed.
Rubenson & Shutze identified 3 important factor influencing this significant change:
1. Introduction of new & sophisticated technologies2. New forms of work organisation3. New trends in organisational management
Problem solving is one way of learning and developing expertise.
Employment security – 1/3 According to Baskett and Marsick, self delegating workers with multifunctional expertise are most desirable employees. Employment security is the state of possessing the knowledge a skills that ensure a worker is employable across a range of duties and types of job rather than the single job provided by a single employer previously known as job security.
Fig A.4 - The move from job security to employment security.
Job Security specific skills oriented towards one job in the organisation skills and knowledge development provided mainly by organisation after initial qualification gained.
Employment Security many different skills oriented towards many jobs in many different organisations skills and knowledge development provided mainly by individual after qualification gained.
Employment security – 2/3 According to Kapin Report managers do not take responsibility for their own learning and development. According to Kapin Report there are 5 areas from which this pressure stems.
• Enterprises increasingly require enhanced management skills.• Enterprises are becoming more strongly committed to helping managers to improve
their skills for a variety of future career possibilities.• Enterprises are making it clear that learning and self development is a partnership
between the firm and the manager.• Individuals are no longer guaranteed a clear career path within one organisation.• Individuals are increasingly planning careers spanning organisation and industries.
Employment security – 3/3 Rubenson and Schutze indicate that the types of abilities and skills required of employees are:• Capability of analytical thinking applied to different processes of work.• Sense of quantitative appreciation of different processes.• Ability to conduct dialogue with equipment• Sense of responsibility and capacity for autonomous work• Ability to link technical, economic and social considerations in appreciation of equipment &
working methods.• Planned & methodical approach to work• Willingness to take the initiative and perform independently.• Ability to cooperate and work in groups.• Competence in planning and evaluating one’s own work and that of others.• Understanding how to work with people from different cultures and backgrounds.• The ability to make decisions.
Learning & performance managementLearning is related to individual performance and the development of expertise. It resultsIn new knowledge and skills so that individuals can perform their jobs in more capable wayincreasing individual competence and developing skilled vocational practice towards expertise.
To facilitate learning transfer to workplace, learning methods and activities need to link to skills and knowledge development to work activities and the actual degree of competence required by organisations.
Training is geared towards specific, measureable outcomes for the learner based on descriptions of actual job performance. Competency based training allows for recognitionof skills and prior work experience in attaining national qualifications in a variety of subject areas.
CHAPTER 1 –SELLING GOALS FOR THE ORGANISATION
Objectives:
Why planning is necessary?
Why plans should be written?
The term of “planning”
Why planning is an important management function?
How better planning reduce mistakes
The components of plans
Why managers need to plan?
The benefits of planning
The purpose of vision & mission statement
Difference between strategic & operational planning
The term “strategic planning”, & “goal”
The process of goal setting
INTRODUCTION
The old saying:
“If you don’t know where you are going, how are you going to get there?”
It is sensible to say that some form of planning needs to be done before acting on it.
Planning : formal or informal.
Planning cannot guarantee performance but should improve the probability of improved performance.
A plan is an objective reference point for employer & employee.
What is Planning?
Defination:
1)…… examining the future and drawing up the plan of action.2)…. Planning encompasses defining the organisation’s objectives or goals, establishing and overall strategy for achieving these goals, and developing a comprehensive hierarchy if plans to integrate and coordinate activities.3)…. Plans are projected courses of action and aimed at achieving future objectivities.
In simplified terms it means:
Planning is an activity that looks the future and how you will get there.
Fig 1.1 – Components of Plans
Planning
Goals
Objectivities
Strategies
Action
Why Plan? Refer Table 1.1 Why managers should plan ?
Learning Organisations
Organisations must:
• adapt to changing environment• aim at a learning organisation culture
Focus is on excelling customers, staff, owners through expanding the organisation’s capacity to ensure future success.
Total Quality Management (TQM) – •improvement process for betterment•Empowerment to employees•Best practice is applied•Enhances on people togetherness, honesty, two-way feedback, motivation for employees: professional & personal development
Organisations need to improve, review visions and objectives in response to changes.
Planning in a Changing Environment
The planning process cannot be abandoned when change occurs.
The process require time and effort. Goals & actions may be suspended due to
reasons beyond your control but the process of planning is not wasted. A skillful
developed plan will always incorporate elements of uncertainty, together with
appropriate contingency measures.
A proper plan will assist in understanding your nature of business in details which will
give your flexibility, and proper timeliness for responses.
A skilled manager must be able to cope with and manage change as an everyday
activity with the use of planning skills. A plan also is likely to reduce stress for all
workers.
Planning for Performance
Planning starts at the highest level.
Vision must be decided – Statement of things that are important to an organisation.
2 components:
1) Direction – where it is going in the future
2) Identification of values that will influence the strategic decisions & behaviours within an organisation.
A vision statement sets the direction.
Refer to the following:
Figure 1.2 – Components of a vision statement
Figure 1.3 Mission statement – involves broad description about the organisation & its purpose.
Figure 1.4 Combined vision and mission statement The vision & mission statement leads to the strategic planning process which in turns leads to the operational or business planning setting which forms the basis for an individual’s performance objectives.
Figure 1.5 The planning process
Strategic Planning
Strategic Planning – 3 to 5 years in the future
Operational or business Planning – 12 months or to 3 years.
This solely depends on the organisation and its effects of change.
Fig 1.6 Differences between strategic & operational planning
Complexity of Strategic Management- 1/5
Strategic management is demanding & well structured plans effort can be seenthrough implementation and motivation of the people working in the organisation.
Simply put:
…… aligning the organisation with the internal resources and the external environment to ensure long-term survival.
Strategic management involves:
• Identify where the organisation is currently• Access how external environment is likely to affect the environment• Decide what alternative actions possible in line with vision & mission• Choose an action or actions• Implement the choice
Complexity of Strategic Management- 2/5
Characteristic of Strategic decisions: (according to Johnson, Scholes & Whittington)
• Concerned with long term direction of organisation• About the scope of an organisation’s activities• Trying to achieve some advantage over competition• Matches the organisation’s activities with the environment in which it operates• Matches the organisation’s activities to its resource capability• Decisions have major resource implications for an organisation• Organisation’s strategy will be effected by environmental forces, values and
expectations of those who have power in and around the organisation
Complexity of Strategic Management- 3/5
To develop & implement a Strategic plan: (9 steps suggested by Robbins & Mukerji)
1. Identify organisation’s mission, objectives & strategies2. Analyse the environment in which organisation is operating3. Identify opportunities & threats to organisation4. Analyse the organisation’s resources5. Identify the strengths & weakness of the organisation6. Review the organisation’s Mission and Objectives7. Formulate strategies to achieve desired goals8. Implement strategies9. Evaluate the results
The process is complex but the activity can be easily managed with the aid of Succinct (brief) guidelines
Complexity of Strategic Management- 4/5
Strategic plans
- Focused on the whole organisation, providing objectives, direction & its interaction with the environment.
- Goal form the foundation of all plans and can range from broad to specific targets.
Complexity of Strategic Management- 5/5
Fig 1.7 – Relationship between goals and other planning activities
Goal Setting – 1/4
Definition: A direction, point you want to head towards, a destination or a purpose.
Goals can be interpreted as aims, objectives, targets or purposes.
Goal & aim – general descriptions of intentObjective & target – more specific
Process of setting goals (based on Robbins & Hunsaker)
1. Specific2. Challenging3. Time Limits4. Participation5. Feedback
Goal Setting – 2/4
Research states that goals need to be future based and immediate.
Goals that reach too far in the future without supporting sub-goals remain
unachieved.
Sub-goals need to specific and measureable – essential for appropriate learning and
development to achieve the main goal.
It is a logical process & disciplined based on the 5 steps, be it strategic plans,
operational plans or individual performance objective, the process is the same but
the substance differs.
Goal Setting – 3/4
8 steps in setting up goals:
1. Broadly identify what you want to achieve
2. Narrow down to specific things (sub-goals) in order to reach the main goal
3. Identify how you will measure – sub-goals (known as objectives)
4. Identify specific level of achievement required for each sub-goal
5. Identify linkages between sub-goals
6. Set time limit for each sub-goal
7. Identify & rank each sub-goal from most important to least
8. Develop and action plan for each sub-goal.
Goal Setting – 4/4: Fig 1.8 – Goals & sub-goals
Main GoalReduce the consumption of stationery in the organisation
Actions
Actions
Actions
Conclusion
Skilled goal setting linked to many successful individuals.
It lays down foundation for success.
Plans built on goals. – 5 fundamental rules apply
Goals & plan can change – management must be prepared to adapt to makechanges. Plans made are not wasted – this makes you well prepared and developflexibility to meet up with new changes.
Planning and performance linked through process of goal setting. Strategic planningis the 1st part of performance planning process. Sets up the direction & facilitates thedevelopment of operational plans to individual objectives. Brings together lower level plans e.g.operational & individual performance plans to be developed to the success of the overall organisation’s plan.
Chapter 2 – Key Performance Indicators
Objectives:• Basis on which organisations are judged.• Key performance indicators (KPI) framework• Understand Critical success factor (CSF)• List four examples of CSF• State the class of managers that should be involved in setting CSFs• Explain a KPI • Explain the terms ”means” and “ends”• Describe relationship between CSPs and KPIs• Explain the role of performance indicators• How KPIs might be used• State most common reasons for development of KPIs• Use KPIs to monitor performance
Introduction
An organisation is judged by the results it achieves. Business operates for profits ,
returns on investments for shareholders. If no profits are made, shareholders take
action and the market react badly which gives a negative impact on the operation of
the company. In extreme cases bad results can force a company to close.
Performance Indicators (PIs) relate to the results the organisation wants to achieve.
Vital areas are identified by organisation to perform well in order to achieve its
strategic and operational plans for the period. Organisations may have problems like
Strong competition, voter dissatisfaction, poor financial results, introduction of new
Technologies, dollar fluctuations, and cyclical ups and downs. At this time, Key
Performance Indicators are vital if the company need to turnaround. KPIs and CSFs
can be developed and used in day to day activities of its operation to define and
Measure business objectives.
Key Performance Indicators (KPI) framework – 1/2
Brief description:
Critical Success Factors (CSFs) – identify those aspects of the organisation that
are critical for its success.
Key Performance Indicators (KPIs) – indicators of performance that are of great
Importance to the success of the business. A KPI is quantifiable gauge used to
measure an organisation’s performance against its CSFs. KPIs can be financial or
non-financial and there may be more than one KPI per CSF.
Performance Indicators (PIs) are measures of different parts of the organisation’s
performance.
Key Performance Indicators (KPI) framework – 2/2
Key Focus Areas (KFAs) use in place of Key Success Factors (CSFs).
Key Result Areas (KRAs) utilised at job level sometimes interchangeable with Key
Performance Areas (KPAs).
e.g. If OHS (Occupational Health Safety) was a key performance area of a job, related PIs could include the number of accidents per occupational group and lost time injuries expressed in days lost.
Refer to the following:
Fig 2.1 KPI frame work – Pgs 28 -29
Fig 2.2 Theory to Practice - Pgs 30 - 31
Fig 2.3 Examples of CSFs for different industries – Pg32
Fig 2.4 KPIs for a sample organisation – Pg 33
Fig 2.5 Relationship of performance indicators to KPIs – Pg 34
Fig 2.6 Means and ends – Pg 35
Fig 2.7 Sample performance indicators – Pg 36
Why are KPIs needed? Pgs 36 - 37
Steps in developing KPIs – Pgs 38 – 39
CONCLUSION
KPI fundamental for a sound management system.
Provides focus for measurement throughout the organisation and forms the basis for individual performance objectives.
Required for efficient operation and if skillfully developed contributes to the strategicand operation plans of the organisation.
KPIs used with CSFs which are identified by organisation for its long term survival.
KPIs flow from operational plans and CSFs flow from strategic plans.
KPIs made of 2 components: specific performance and some sort of indicator for the
performance.
5 steps have been outlined to develop suitable CFSs and KPIs.