What are the dimensions of managing organizational performance?
In the words of Armstrong, “The management of organizational performance is the prime responsibility of top management who plan, organize, monitor and control activities and provide leadership to achieve strategic objectives and satisfy the needs and requirements of stakeholders. (Armstrong, 2012, p. 328)”
“The term ‘Performance Management and Measurement’ refers to any integrated, systematic approach to improving organizational performance to achieve strategic aims and promote an organization’s mission and values. In that sense Organizational Performance Management is quite different than individual Performance Management which specifically targets the personal performance of an employee although the latter comprises an essential part of the overall organizational performance framework. (Salem, 2003, p. 2)” Thus management of organizational performance is the process of preparing organization performance for equal if not better performance in the uncertain future.
The dimensions of managing organizational performance are;
Creating Vision for the future: Organization while managing performance needs to create a vision for the future first. Based on the vision the performance system and strategies are formed. This helps the organization to stay focused and rooted on their goal even at times of uncertainty.
Planning: Based on the set vision planning is done for meeting the uncertainty of the future. This is based on the review of the current organization situation and new intervention plans are planned for future improvements. For example if a company is planning to extend its operation in a new district the planning will be for preparing a work force that can start right away as soon as the new factory is set up.
Designing, developing and implementing improvement interventions: The planning is based on the survey of the organization current potential. The designing is also done based on the current situation. New and better improvements of job performance are prepared for the future. The individual job standards are designed and set to meet the goal/vision of the organization. For example the planned and prepared work force are specifically and individually catered job standard. These job designs are pre-set to mutually support with the overall objectives of the organization.
Designing, redesigning, developing and implementing measurement and evaluation systems: All implemented planning and design needs to be analysed for their met output. So proper evaluation system for this analysis needs to be developed to ascertain if the strategies have achieved their stated objective. In other words work performance evaluation systems are designed and developed. The evaluation system will be implemented to see if the specifically designed jobs have supported in achieving the organization vision and if not then the planning and designing are redone.
Reward system: Depending upon the evaluation of the performance rewards systems are developed and put in place. The employees are motivated with the rewards system to continually perform better.
Armstrong, M. (2012). ARMSTRONG’S HANDBOOK OF HUMAN RESOURCE MANAGEMENT PRACTICES (12 ed.). Kogan Page Limited.
Salem, H. (2003). Organizational Performance Management and Measurement. Beirut: Economic and Social Council. Retrieved from http://unpan1.un.org/intradoc/groups/public/documents/unescwa/unpan010860.pdf
Organizational performance management is considered as one of the most vital component for any organization to function effectively. It mostly involves the heads or the boards who plan, organize, monitor the plan in action and control ongoing/upcoming activities while also providing direction with leadership to achieve targeted objectives / goals (Taylor, 2014). There are five dimensions to organizational performance as stated by Sink and Tuttle, which are as listed below (Sink & Tuttle, 1990):
- Vision: Leader must be able to create a clear vision of how the organization is to perform. With a clear vision the leader can pass that on to the team who can follow better/effectively. If the leader demonstrates a long term commitment with focus on his sub-ordinates within the organization and proving them proper training opportunity and career map makes them feel more values and the organization can move ahead with the leader’s vision.
- Planning: It involves of first identifying the current state of the organization including the areas of improvement and then working on the areas that need improvement to make the organization better.
- Improvement of goals: Any objectives or targets set doesn’t mean they’re hard coded and can’t be reverted. So, the leader should always be able to look for areas to improve the goals and then design, develop and implement such strategies to improve the goals and the final outcome.
- Evaluation: The goals and objectives set need to be evaluated as well. For this an effective evaluation system and implementation measures should be properly designed and developed.
- Reward and Reinforce progress: Keeping a proper cultural system and using that as a tool to reinforce (either positively or negatively) people might act as a strong motivating factor to push them to do the works at the best of their capacity resulting in the achievement of the organizational targets.
Sink, D., & Tuttle, T. (1990). The performance management question in the organization of the future . Industrial management, 32 (1).
Taylor, J. (2014). Organizational Culture and the Paradox of Performance Management. Public Performance & Management Review , 38 (1), 7-22.
Organizational performance is the analysis of a company’s performance as compared to its goals and objectives. It comprises real results or outputs compared with intended outputs. Organizational performance management is the process of making sure that the company resources are being properly used in pursuit of the company goals. The main purpose of managing organizational performance is to increase the organizational capability. It also helps in maintaining a competitive advantage (Armstrong, 2012).
The management of organizational performance takes place on a number of dimensions. It is a strategic approach that has to take in account the needs of multiple stakeholders and make use of business performance management systems (Armstrong, 2009).
Sink and Tuttle (1990) has given the following five dimensions for managing the organizational performance:
- Creating visions for future: The organizational performance should be driven by corporate purpose and goals. Creating vision for the future provides guidelines about where the organizational activities should be headed making it easier for the managers to manage the performance. If the vision of an organization is to establish itself as the world’s best service brand, everyone in the organization should give their best for attaining the vision of the organization.
- Planning: Planning is related with determining the present organizational state and developing necessary skills to attain the vision. It is related with obtaining the solutions that will work for the organization. Proper planning helps to make sure that the resources available within the organization are mobilized towards the attainment of organizational objectives. To be the best service brand in the world, the activities need to be planned accordingly.
Designing, Developing and Implementing Improvement and Interventions: The organizational behavior is based on organizational accepted principles but need to be redesigned and improved to facilitate flexibility in operations. Organizational performance is not a rigid system or rule of thumb so improvement and intervention is needed time to time. The organization should focus on the things about which something can be done so that they can get visible improvement. Only desiring to be the best will not make any organization best so the organization needs to continuously update and upgrade itself with the changing business requirements and improve and intervene the existing organizational performance to attain its ultimate objectives.
- Designing, Redesigning, Developing and Implementing Measurement and Evaluation Systems: Proper measurement and evaluation system is the base for managing organizational performance. It helps to know what the organization is doing well, what it is lacking and what it needs to improve to make sure that it is heading towards the attainment of the organizational goals. It is necessary to review the measurement and evaluation system to ensure effectiveness of the employees responsible for making the desired outcomes possible.
- Putting Cultural Support in Place to Reward and Reinforce Progress: The success of organization depends on the performance culture it follows. People are motivated to work in the organization whose culture aligns with their own. So the cultural aspect should be incorporated in the process of rewarding and reinforcing for managing the organizational performance. The involvement of employees in developing reward process creates positive employment relationship.
Armstrong, M. (2009). Armstrong’s Handbook of Performance Management. London: Kogan Page.
Armstrong, M. (2012). Armstrong’s Handbook of Human Resource Management Practice (12 ed.). London: Kogan Page.
Sink, D. S., & Tuttle, T. C. (1990). The Performance Management Question in the Organization of Future. Industrial Management, 32 (1).