Performance Management and Strategic Planning

Strategic plan is the blueprint, which channels the organizations resources towards the goals.

Main purposes of a strategic plan in an organization according to Aguinis, 2009 are as follows,

• It defines the organizations identity
• It helps to prepare for the future
• It enhances the survival in environmental changes
• It provides focus and allows better utilisation of resources
• It produces an organizational culture build on corporation
• It direct the employees with their daily activates

Bridging Performance Management and Strategic Planning

Developing a good strategic plan does not ensure that it will be used effectively in the PfM. Many organizations develop mission and vision statement without any fruitfulness. In order to achieve that results concrete follow up steps needed to be taken when implementing them. That is why bridging PfM is crucial. Following diagram depicts an ideal framework to be used.

Figure 01 - Strategic Plan framework Aguinis, 2009)

Strategic plan incorporates a mission and a vision along with goals and strategies to fulfil their mission and vision. The strategic plans created with the involvement of senior managers at all levels. And once the creation is complete they proceed onto department or unit managers, who in turn share their input from all people within their units to create unit-level mission and vision statements, goals, and strategies. Then the jobs in the units or departments revise the job description to reflect and concise with that of the organizational level. After this the individuals or teams in a PfM will develop results, behaviours and development plan according to the job description. (Collier, Fishwick, & Floyd, 2004). Organizations can reap the benefits of PfM when it bridges the strategic goals.

Strategic Planning

In order to develop an organization’s strategic plan it is important to analysis the competitive situation, the current situation, the organization’s current position and destination, the development of the organization’s strategic goals, the design of a plan of action and implementation, and the allocation of resources (human, organizational, physical) which increases tendency of achieving the objectives (Fisher, Schoenfeldt & Shaw 2003).


Important steps of strategic planning (Aguinis, 2009)

1. Environmental Analysis – Looking at the big picture to identify internal and external parameters surrounding the operation of the organization.

2. Organizational Mission - The mission statement defines the why the organization exists. It provides the purpose and the scope of the organization.

3. Organizational Vision – The vision statement defines where the organization will be in long-term.

4. Setting goals – Goals are the milestones for the vision. In this regard, goals describe how the mission be implemented.

5. Strategies – After identifying the environment and defining the mission, vision, goals, this describes on how to achieve them.

During the implementation of PfM stages especially during the pre-requisite stage and performance renewal and recontracting stages these needed to be paid great attention to.



References

Addams, H. L., & Embley, K. (1988). Performance management systems: From strategic planning to employee productivity. Personnel, 65, pp 55–60.

Aguinis, H. (2009). Performance management. (1st ed). Upper Saddle River, NJ: Pearson Prentice Hall.

Collier, N., Fishwick, F., & Floyd, S. W. (2004). Managerial involvement and perceptions of strategy process. Long Range Planning, 37(1), pp 67–83.

Fisher, C.D. , Schoenfeldt, L.,F. & Shaw, J.,B. (2003) Human Resource Management, (5th ed.) Boston: Houghton Mifflin.