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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