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Strategic Performance

Management

Dr. Elijah EzenduFIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,

PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr


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Performance management is aproactive partnership between

employees and management that

helps employees perform at their bestand align their contributions with the

goals, values, and initiatives of the

organization- American Management Association


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Performance Management is a strategicand integrated approach to delivering

sustained success to organizations by

improving the performance of thepeople who work in them and by

developing the capabilities of teams

and individual contributors. - Armstrong & Baron


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Strategic Performance Management

encompasses methodologies, frameworks and

indicators that help organizations in the

formulation of their strategy and enable

employees to gain strategic insights whichallow them to challenge strategic assumptions,

refine strategic thinking and inform strategic

decision making and learning. !ernard Marr


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"he #volution of Performance Management


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"ools for Strategic Performance Management

i. Management by $b%ectives &Peter 'rucker(

ii. )oshin *anri &+o%i kao(

iii. !alanced Scorecard &-obert *aplan and 'avid orton(

iv. Marr !alanced Scorecard &!ernard Marr(

v. /alue !ased Management

vi. -esults !ased 0eadership

vii. -esult $rientated Management

viii. Performance Prism


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1hat is Performance Prism2

3t4s a framework for performance management andmeasurement which was developed to surmount

the weaknesses of balanced scorecards.

3t was developed in 5ranfield 6niversity, 6nited

*ingdom. "his innovation was led by Prof. ndy

eely, Professor of $perations Strategy and

Performance 'irector of 5ranfield4s 5enter for!usiness Performance and 5hairman of

Performance Management ssociation.


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"he 'ilemma of !alanced Scorecards

"he balanced Scorecards which was developed by*aplan and orton focused on four perspectives

namely financials, customers, internal processes

in addition to learning and growth. 3t attempts to

use strategy as an end instead of a route. 3t

focuses too much on shareholders and

customers without proportionate consideration

for other stakeholders such as employees,suppliers and regulatory agencies.


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"he Standpoint of Performance Prism

Performance Prism upholds that strategy

should not be an end. Strategy is a route

for delivering value to stakeholders.

"herefore, measures should not be

derived from strategy. Measures must be

derived from stakeholders.


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"he Performance Prism 7ramework

"op 8 Stakeholder Satisfaction

Side9 8 Strategies

Side: 8 Processes

Side; 8 5apabilities

!ottom 8 Stakeholder 5ontribution

Source: Adapted from Andy Neely and Chris Adams, The Performance Prism


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scertainment of Stakeholders

Shareholders

#mployees

7inal 5onsumers

'istributors

Suppliers

5ommunity

State

#cosystem


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Modeling Strategies

3n accordance with principles of performanceprism, strategies of a firm should be

crafted based on mission direction

towards satisfaction of distinct stakeholdervalues.


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Modeling Processes

"he appropriate processes should behallmark of smoothness and well thought

out mechanism for e


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Modeling 5apabilities

firm should view its capabilities re=uirement

as technology, practices, infrastructure

and competencies necessary for carryingout operations vis>vis the established

processes in order to generate values for

stakeholders.


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Stakeholder 5ontribution

$rganizations should ascertain thecontribution of each stakeholder group to

it4s success, so as to identify good

contributors, poor contributors and noncontributors. "his is necessary for effective

positioning of the firm4s performance

model.


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'rivers for 6sing Performance Management

i. dvancement in Management

ii. "echnology

iii. Market

iv. 5ompetition

v. )uman -esource Strategy

vi. ?overnment

vii. 3ndustrial -elations

viii. $rganizational -estructuringi


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6sing Performance Management System

Performance Standards

Performance Measurement

@uality 3mprovement Process

Performance -eporting


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"he Management 5hallenge

A of 9B companies fail to e


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Performance Management Maturity Model

Progress

"ime

'isparate 6ncoordinated pproach3ndividual efforts'uplicated effort, difficult to consolidate"ime consuming, irreconcilable, possibly mistrusted

Systematic Performance ManagementSingle coherent database established*ey Performance data collected efficiently

#fficient reporting of performance

#ffective Performance -eporting5ohesive set of strategieslignment cascade throughout organisation5lear accountability is established

Performance Management$wnership is devolved$b%ective interdependencies mapped and better understood'ecisions based on factsManagement actions changed through use of information

Performance 5ulturell employees empowerment is facilitated1idespread management by fact and process

Plans reflect organizational capability5apability improvement aligned with strategy5ontinuous improvement achieved

Source: "nphase Soft#are


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"he -ole of "echnology in Performance Management

i. 3ncrease data =uality

ii. "rigger employee behaviour

iii. #nhance processes

iv. !oost Performance

v. 3ncrease ccessibility of 'ata

vi. -einforce 5ompliance

vii. 3mprove performance planning

viii. ids in development of *P3


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5ore 3ssues in Performance Management

i. ?oal Settingii. ?oal lignment

iii. #mployee 5ompetencies

iv. Measuring Performance

v. Performance -eview

vi. 'evelopment Management


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1hy Should +our $rganisation 3mplement

Performance Management2

i. 5ommunicate vision, mission, values, ob%ectives

ii. Provide impetus for effective organizational development

iii. lign organizational resources for growth

iv. #nhance working relationships

v. 3mprove management

vi. 5ommunicate strengths and key areas for improvement

vii. Provide Support to workers

viii. Monitor organizational activities

i


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1hat #mployees 1ant 7rom PM

i. -ational e


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#lements I $utcomes of

Performance Management

#lementsC

0istening

5oaching

7eedback

$utcomesC

!etter Performance

3mproved Morale, !elief I 0oyalty


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Principles of Performance Management System

i. 5larity of Purpose

ii. 7ocus

iii. lignment

iv. !alance

v. -egular -efinement

vi. -obust Performance 3ndicators


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5onducting Performance 3mprovement


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!usiness nalysis for Performance 3mprovement

3dentification of stated goals and ob%ectives.

scertainment of the business environment.

#valuation of stated goals and ob%ectives in the

business environment. 'etection of fitting goals and ob%ectives.


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Performance nalysis

Performance analysis focuses on

measuring the gap between desired

and actual performance.

5larified business ob%ectives determine

re=uirements for desired performance.

)ighlights of re=uirements includeorganizational structure, competencies,

resources, processes, work systems

and competitiveness.


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"he Place of 0earning and 'evelopment

3ntervention

0earning and 'evelopment intervention can

only be applicable to gap in competencies

and behavioural traits.

"he other re=uirements for desired

performance call for matching

intervention.


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"ranslating Strategy 7rom $rganisation to #mployee

"ranslate "ranslate


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Performance 3ndicator

3t4s a tool enabling the effectiveness of an operation

or organisation to be measured, and allows an

achieved result to be gauged or evaluated in

relation to a set of ob%ectives. Source: $%C


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Properties of Performance 3ndicators

i. -elevant to the purpose, policy and practice

ii. 5learly defined

iii. -eliable

iv. 1orth measuringv. Measurable

vi. ?alvanize action

vii. -eflect results of action

viii. Precisely defined as possible

i


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dvantages of Performance 3ndicators

i. Means of measuring organizational

progress toward set ob%ectives.

ii. ?ive room for benchmarking and comparingvarious units, sections, departments and

subsidiaries.


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'isadvantages of Performance 3ndicators

i. ct as bad measures if not well defined

ii. Some vital indicators cant be easily measured

iii. 3ssuance of comple


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*ey Performance 3ndicators in a 7irm

"hese are =uantifiable factors that are clearly

connected to drivers of business success in a

particular firm.


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5riteria for Selecting *P3

i. Strong linkage to ob%ectives

ii. "hey should be connected to areas of the

business that can be controlled

iii. "hey should be =uantifiable


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"ypes of *P3

9. 'irectional 3ndicators

:. @uantitative 3ndicators

;. ctionable 3ndicators

J. Practical 3ndicators


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'eveloping "argets based on *P3

*ey Performance 3ndicator should drivemanagerial effort towards a mark of

achievement, which is a target in accordance

with set ob%ective.

*P3KK.-educe waste

"argetKKDBE by end of March

Dr Elijah Ezendu is Award-Winning Business Exert ! "erti#ed Management "onsultant


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Dr. Elijah Ezendu is Award Winning Business Exert ! "erti#ed Management "onsultantwith exertise in $%& 'D& "ometiti(e )ntelligence& Strateg*& %estructuring& BusinessDe(eloment& Sales ! Mar+eting& )nterim Management& "S%& ,eadershi& Project !Programme Management& "ost Management& 'utsourcing& ranchising& )ntellectual"aital& eBusiness& Social Media& Software Architecture& "loud "omuting& e,earning !)nternational Business. $e holds rorietar* rights of (arious s*stems. $e is currentl* "E'&

%uiini /0AE12 $on. President& Worldwide )ndeendent )n(entors Association2 SecialAd(isor& %3EA42 Director& MM4A )n(estments ,imited. $e had functioned as "hair&)nternational Board of 5"" Business "ouncil /0AE12 Senior Partner& She(ach "onsulting2"hairman /"erti#cation ! 3raining1& "oordinator /Board of ellows1& ,ead Assessor !5o(erning "ouncil Memer& )nstitute of Management "onsultants& 4igeria2 ,ead %esource&"entre for "ometiti(e )ntelligence De(eloment2 3urnaround Project Director&"onsolidated Business $oldings ,imited2 ,ead "onsultant6 Partner& 78 Michaels2 3echnical

Director& 5estalt2 "hief 'erating '9cer& %ohan 5rou2 Executi(e Director /:arious %oles1&ortuna& 5amia ! Malta2 Director& 3he 5reens2 "hief Ad(isor6Partner& D ! E2 :ice"hairman& %e#ned Shiing2 Director of Programmes ! 5o(erning "ouncil Memer&)nstitute of Business De(eloment& 4igeria2 Memer of 3DD "ommittee& )nternationalAssociation of Software Architects& 0SA2 Memer of Strategic Planning and )mlementation"ommittee& "hartered )nstitute of Personnel Management of 4igeria2 Adjunct acult*&%egent Business School& South Africa2 Adjunct acult*& ,ado+e A+intola 0ni(ersit* of

3echnolog*& 4igeria2 Editor-in-"hief ! "hairman of Editorial Board& "ost Management7ournal2 4ational Executi(e "ouncil Memer& )nstitute of )nternal Auditors of 4igeria2Memer& Board of Directors /Se(eral 'rganizations1. $e holds Doctoral Degree inManagement& Master of Business Administration and ellowshi of Se(eral Professional)nstitutes in 4orth America& 08 ! 4igeria. $e is an author ! widel* featured sea+er inwor+shos& conferences ! retreats. $e was in(ol(ed in de(eloing Secialist Master;sDegree "ourse "ontent for ,ado+e A+intola 0ni(ersit* of 3echnolog* /4igeria1 and 7ones)nternational 0ni(ersit* /0SA1. $e holds )nterim Management Assignments on Boards of"omanies as 4on-Executi(e Director.


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Thank You

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