Performance is explained superficially, which is the achievement of quantified objectives. Performance has an important connotation that is the way that people choose to achieve the objectives. Therefore, performance means process and manner of functioning and operating (or behaviours) to attain beforehand desirable goals (or results) (Brumbach, 1988). The mixed model of performance management is suggested by Armstrong (2006) which is based on these simultaneous elements of performance that are behaviour and result.
The considerable aspect of organisational performance management is to maintain the goal congruence. Performance management aligns the organisation’s objectives with the individuals’ goals. Many performance management theories apportion this alignment as a main endeavour of the performance management process such as Balanced Scorecard. Besides, performance management could converge to strategic development by some modification of its methods and facilitates indirect control of employees by giving a clear target (Otley and Fakiolas, 2000; Hemmer, 1998; Egan, 1995).
Organisations usually utilise two main theories to be competent firms in their markets. Those theories are Porter’s theory (1980, 1989) and resources and competences theory. Despite of which theory is deployed, ongoing performance management could facilitates to achieve significant results and produce prosperous business. Besides, the obligation for continuousness of performance management is argued in details on the proper sections.
Multifarious performance management frameworks are available that usually they are divided into three corporate, business unit and, functional levels. Among those various frameworks balanced scorecard is used abundantly. It “helps companies to look and move forward instead of backward” (Kaplan and Norton, 1992). It has been proposed that the utilisation of balanced scorecard leads to ameliorate financial performance compared to traditional financial performance measures (Davis and Albright, 2004).
The advocators of balanced scorecard argue that a consequent cause-and-effect relationship exists among the perspectives of balanced scorecard. Cohen et al (2008) mention “The proponents of balanced scorecard claim that lead factors interrelate and their improvement ultimately leads to increased financial performance”.
Table of Contents
1. Executive Summary
2. Introduction
3. Literature Review
3.1. Performance management vs. Performance appraisal
3.2. Performance management should be an ongoing progress
3.3. Important aims of Performance management
3.4. Performance management models
3.5. Balanced Scorecard approach
4. Background of Tesco
4.1. Tesco’s Strategy and workforce size
4.2. SWOT Analysis
4.3. Tesco’s Steering Wheel
5. Conclusion
Research Objectives and Themes
This study aims to examine the role and effectiveness of performance management systems within large-scale organizations, with a specific focus on the implementation and impact of the "Tesco Steering Wheel." The research explores how aligning individual employee goals with corporate strategic objectives, through frameworks similar to the Balanced Scorecard, facilitates organizational growth, employee development, and long-term business success.
- Theoretical foundations of performance management versus traditional performance appraisal.
- The strategic significance of goal congruence and continuous performance improvement.
- Comparative analysis of management models, particularly the Balanced Scorecard approach.
- Application of performance frameworks within the retail industry, specifically at Tesco.
- The correlation between learning, development, and enhanced financial performance.
Excerpt from the Book
4.3. Tesco’s Steering Wheel:
Globalisation increase competition; whatever that reason is, the results of competition are more pressure to be world class and the result of this is coercing to make employees more lucrative and compulsion to do thing better and less expensive. It means that the firm’s performance and employees’ efficiency should be reviewed and improved continuously (Dessler, 2011).
In the early 1990s, Tesco was disorientated and in need of direction due to the new globalised environment. Consequently, in the late 1990s, Tesco developed a new company strategy to align the organisation around its strategy and communicate the strategy broadly. As a result, the firm developed the “Tesco Steering Wheel” and this tool has played a key role in enabling the company to execute its strategy successfully and produce preeminent results (Leahy, 2008; Witcher and Chau, 2008). Tesco’s Steering Wheel and the balanced scorecard designed by Kaplan and Norton (1992) for performance management are similar in many features.
Steering Wheel provides a malleable and tacit framework for Tesco, which guides the company to better all its activities (Leahy, 2008). Besides, it suggests few overall objectives that are manageable because of balanced scorecard’s inheritance (Kaplan and Norton, 1996a); therefore, it assists executives to focus their time and attempts on those measures that will propel the organisation forward to its succeeding ambitions. This idea that top management should concentrate on a handful objectives is a long-lasting concept in strategic management (Drucker, 1955; Daniel, 1961; Rockart, 1979)
Summary of Chapters
1. Executive Summary: Provides an overview of corporate performance definitions, the shift towards mixed performance management models, and the introduction of the Balanced Scorecard as a strategic tool.
2. Introduction: Defines performance management as a systematic process to improve individual effectiveness and team efficiency in alignment with organizational strategy.
3. Literature Review: Discusses the theoretical underpinnings of performance management, comparing it with traditional appraisal and examining various frameworks like the Balanced Scorecard.
4. Background of Tesco: Details the history, strategic elements, and the specific application of the "Steering Wheel" framework within Tesco's global operations.
5. Conclusion: Synthesizes the findings, emphasizing that investing in training and development is critical for achieving sustainable financial results and employee satisfaction.
Keywords
Performance Management, Performance Appraisal, Balanced Scorecard, Tesco Steering Wheel, Goal Congruence, Strategic Alignment, Human Capital, Organizational Growth, Employee Development, Financial Performance, Retail Management, Business Strategy, Continuous Improvement, Corporate Objectives, Leadership.
Frequently Asked Questions
What is the primary focus of this research paper?
The paper focuses on the definition, importance, and practical application of performance management systems in modern organizations, using Tesco as a key case study to illustrate these concepts.
What are the central themes discussed in the work?
The central themes include the shift from traditional performance appraisal to ongoing performance management, the alignment of employee goals with corporate strategy, and the use of the Balanced Scorecard model.
What is the main objective of the study?
The main objective is to demonstrate how performance management frameworks can align individual employee behaviors with organizational strategy to achieve long-term growth and success.
Which scientific method is utilized in this paper?
The study utilizes a literature review of existing performance management theories and a case study analysis of Tesco’s implementation of the "Steering Wheel" framework.
What is covered in the main body of the text?
The main body covers the theoretical definitions of performance management, differences from performance appraisal, models such as the Balanced Scorecard, and a detailed look at Tesco’s background, strategy, and specific performance metrics.
Which keywords best characterize this work?
Key terms include Performance Management, Balanced Scorecard, Tesco Steering Wheel, Strategic Alignment, and Organizational Growth.
What is the specific purpose of the "Tesco Steering Wheel"?
The Steering Wheel acts as a flexible framework that aligns Tesco's corporate strategy with the daily goals of employees, ensuring consistent performance across all stores and subsidiaries.
Why did Tesco add a "Community" dimension to its original Steering Wheel?
Tesco added the Community dimension to address growing stakeholder and regulatory concerns regarding climate change and the company's environmental impact.
How does Tesco measure performance within its Steering Wheel framework?
Tesco utilizes clusters of Key Performance Indicators (KPIs) across five perspectives: Financial, Customer, Community, Operations, and People.
- Quote paper
- Payam Haerifar (Author), 2011, Performance Management in Tesco, Munich, GRIN Verlag, https://www.grin.com/document/180233
