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
- Executive Summary
- Introduction
- Literature Review
- Performance management vs. Performance appraisal
- Performance management should be an ongoing progress
- Important aims of Performance management
- Performance management models
- Balanced Scorecard approach
- Background of Tesco
- Tesco's Strategy and workforce size
- SWOT Analysis
- Tesco's Steering Wheel
- Conclusion
- References
Objectives and Key Themes
This text aims to explore the concept of performance management within organizations, particularly focusing on its evolution from traditional financial metrics to more holistic approaches. It examines the relationship between performance management and strategic development, highlighting the importance of goal congruence and continuous improvement. The text also uses Tesco as a case study to illustrate the practical application of a performance management framework.
- The evolution of performance management from solely financial measures to more comprehensive models.
- The importance of goal congruence in aligning organizational and individual objectives.
- The role of performance management in strategic development and organizational control.
- The application of the Balanced Scorecard approach to performance management.
- A case study analysis of Tesco's implementation of a performance management framework.
Chapter Summaries
Introduction: This chapter introduces the concept of performance management, defining it as a systematic process for improving organizational performance by enhancing individual and team effectiveness. It contrasts traditional financial performance measures with the need for a more holistic approach encompassing both behavioral and result-oriented aspects. The chapter also touches upon the challenges organizations face in identifying critical performance measures, emphasizing the importance of context-specific considerations.
Literature Review: This chapter delves into the theoretical foundations of performance management. It discusses the importance of understanding the multifaceted nature of "performance," encompassing both the achievement of objectives and the processes involved. The chapter highlights the concept of goal congruence, emphasizing the alignment of organizational and individual goals as a crucial aspect of effective performance management. It also examines the differences between performance management and performance appraisal, stressing the ongoing and forward-looking nature of the former. The chapter explores the role of performance management as a control system, facilitating indirect control through clear target setting and strategic development.
Background of Tesco: This chapter provides context by focusing on Tesco, a major supermarket chain. It explores Tesco's strategic shift in response to the changing global environment, emphasizing the development of the "Tesco Steering Wheel," a performance management framework similar to the Balanced Scorecard. The chapter likely details how this framework contributes to Tesco's growth and expansion into new markets and product lines, illustrating the practical application of the performance management principles discussed in previous chapters.
Keywords
Performance management, Balanced Scorecard, goal congruence, strategic development, organizational performance, Tesco, performance appraisal, financial measures, behavioral aspects, case study.
Frequently Asked Questions: A Comprehensive Language Preview
What is the main topic of this text?
This text explores the concept of performance management within organizations, focusing on its evolution from traditional financial metrics to more holistic approaches. It examines the relationship between performance management and strategic development, highlighting the importance of goal congruence and continuous improvement. A case study of Tesco illustrates the practical application of a performance management framework.
What are the key themes discussed?
Key themes include the evolution of performance management, the importance of goal congruence, the role of performance management in strategic development and organizational control, the application of the Balanced Scorecard approach, and a case study analysis of Tesco's performance management framework.
What is the structure of the text?
The text is structured into several chapters: an Executive Summary, Introduction, Literature Review (covering performance management vs. appraisal, its ongoing nature, aims, models, and the Balanced Scorecard), Background of Tesco (including its strategy, SWOT analysis, and Steering Wheel), Conclusion, and References. The provided preview also includes an overview of objectives, key themes, chapter summaries, and keywords.
What is the significance of the Tesco case study?
Tesco serves as a real-world example to illustrate how a performance management framework, in this case, a framework similar to the Balanced Scorecard (Tesco's Steering Wheel), can be implemented in a large organization to drive growth and expansion. It shows the practical application of the theoretical concepts discussed in the text.
How does this text define performance management?
Performance management is defined as a systematic process for improving organizational performance by enhancing individual and team effectiveness. It encompasses both behavioral and result-oriented aspects, moving beyond traditional financial performance measures.
What is the difference between performance management and performance appraisal?
The text highlights that performance management is an ongoing, forward-looking process, unlike performance appraisal, which is often a periodic evaluation. Performance management focuses on continuous improvement and strategic alignment.
What is the role of goal congruence in performance management?
Goal congruence, the alignment of organizational and individual objectives, is crucial for effective performance management. It ensures that individual efforts contribute to the overall strategic goals of the organization.
What is the Balanced Scorecard approach, and how is it relevant?
The Balanced Scorecard is a performance management approach that considers multiple perspectives, going beyond just financial measures. The text explores its application in performance management and its use (or a similar framework) within Tesco.
What are the key words associated with this text?
Key words include: Performance management, Balanced Scorecard, goal congruence, strategic development, organizational performance, Tesco, performance appraisal, financial measures, behavioral aspects, case study.
- Quote paper
- Payam Haerifar (Author), 2011, Performance Management in Tesco, Munich, GRIN Verlag, https://www.grin.com/document/180233
