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Examination of business performance management

‘An examination of business performance management principles and practices in elite level sport management in Ireland'

This research focuses on a comparative analysis of performance management in organisations from business and sport industries.

Since the commencement of this study, the researcher has been focused on collecting and analysing all the relevant data and literature that is already available surrounding the topic of performance management. Most of this work has focused on performance management in the traditional business setting, as an abundance of literature is currently available in this area.

The Performance Management Culture

The performance management culture of organisations is the first area of study that the researcher examines in the opening chapter. The implementation of an Organisational Performance Management System (OPMS) and the establishment of an overall performance management culture are essential to meeting stakeholder expectations. A culture of organisational Performance Management is the ongoing process of quantifying and monitoring organisational performance, and aligning that performance to the needs of the many stakeholders of the organisation. A culture of Performance Management should be based on simple concepts for the creation of a holistic and quantifiable view of organisational performance. A culture such as this can be applied to whole organisations, for-profit and not-for-profit organisations but as culture relates to all aspects of an organisation, performance management can not simply be applied to segments of an organisation (Deming, 1982).

The role of the Individual

The next area of study that the researcher has examined is the role of the individual within any performance management process or system. The individual is crucial to the delivery of improvement and effective performance management frameworks ensure that individuals understand their contribution to service and corporate aims. Staff must receive regular feedback on performance and have access to the learning and development they need to be effective in their roles. Performance Management can only be successful if individual managers truly understand how to ensure the development of skills and provide sufficient training and coaching resources so that each employee or section can be fairly measured by the success of their direct reports, not by business results only. The conditions that surround behavior, that is what people say and do that are recognised or punished over time also help to support sustained patterns or diminish such patterns of success. How well an organisation does in applying the elements of performance management is found in the success of its employees in serving stakeholder needs, meeting their targets, producing desired impact and creating a culture of respect and commitment, with a focus on active learning, inclusion, and creating a culture where the focus is aimed at building long lasting habits of success. Monitoring overall organisational performance allows for the effective delivery of operational and strategic goals. Previous research has shown a distinct correlation with using performance management programs or systems and improved organisational results (Kennerly & Neely, 2003; Swailes, 2004; McNamara & Mong, 2005).

Elements of Performance Management

Following this analysis of the role of the individual, the different elements of performance management have been examined. Performance management covers a wide scope of applications including employee performance, project performance and business or corporate performance (Bourne, Franco & Wilkes, 2003). Business Performance management is a particular management system which aids management to make the most efficient use of all the resources available to them, such as human, financial and material. This can be contrasted to operational performance management, which focuses on applying standardised methods of improving business performance, or results, across all aspects of an organisation. A critical element of this practice is integrated business planning, a process that relates to specific technology and applications connecting various units of the organisation to improve organisational alignment and financial performance.

Performance Measurement

An integral component of performance management is how an organisation goes about measuring performance. No matter what process concerning performance management is being driven, appropriate clearly defined measures need to be in place to effectively define the desired outcome and sought after goals. Performance management systems often fall short in achieving the sought after goals of the organisation due to the goal measurement being ambiguous, not specific enough, communicated incorrectly or because results cannot be measured in an effective manner for management. In the case of traditional business, the typical approach is to create "smart goals," those which are specific, measurable, achievable, relevant, and timely.

Performance measurement is a process whereby organisations establish the parameters within which systems and practices, investments, and acquisitions are reaching the results that are required by management (OCIO, 2007). There are many types of measurements. Educational institutions use exams that are graded to establish academic abilities of students, in a sporting context, an athletes time is gauged in order to assess their athletic ability and in sports organisations, national and international results play a large role in how they are deemed to be performing their duties at the optimum level. Similarly in teams and other organisations, many different processes and measurements exist to aid in the evaluation of performance (Gamble, Strickland & Thompson, 2007).

The daunting task of measuring performance for organisations within various countries and establishments, identifying top performers, and examining their drivers of success was not carried out until Peters and Waerman began researching and writing the ground breaking performance measurement book, In search of excellence (1982). This research was the first to ask questions of business management actions and attitudes, and inspired further research to investigate issues surrounding high performance, an integral component of management within all organisations. Measuring performance becomes increasingly difficult as organizations continue to be split up into a diverse range of industries. This issue must be taken this into consideration when conducting a comparative analysis of companies within the traditional and non-traditional organisational environments such as sports organisations.

Performance Management in Sport

Performance management is most commonly applied in the traditional business setting, but can also provide significant benefit to many other institutions such as schools, churches, community meetings, health setting, governmental agencies, political settings and sports organisations (Diaz-Martin, Iglesias, Vazquez & Ruiz, 2000) as these principles are needed whenever such organisations interact with their environments to produce desired effects.

Performance management in sport in Ireland, and indeed in many other nations, is a relatively new phenomenon. Little research has been carried out into examining how sporting institutions and organisations view the issue of performance management and if they use models such as The Performance Prism, Balanced Scorecard or EFQM model (Wongrassamee, Simmons and Gardinerin, 2003) in order to assist them in achieving their strategic goals and manage performance effectively. These models have been proven to be successful in the traditional business environment and given that many sporting entities have much in common with the business industry, it is imperative research be carried out to critically examine this issue in greater detail.

Performance Management Tools

At present the researcher is carrying out a detailed analysis of the various performance management tools that are being employed by organisations throughout the world at present. The balanced scorecard (Kaplan & Norton, 1992) was developed as a strategic performance management tool which comprises of some standard elements, but is more commonly custom- designed to aid top management in many organisations to evaluate the performance of their staff and their operations as a whole. It has developed into the most popular of other similar frameworks, and although initially just adopted in English speaking Nations and also within Scandinavian countries, it has now become popular in organisations throughout the business world. Since 2000, use of the Balanced Scorecard and its derivatives such as the Performance Prism (Neely, 2002), and other similar approaches to management, including Results Based Management have become common in organisations throughout the world, and in particular the Asian countries. Kurtzman (1997) produced research declaring that almost 70% of companies' responding to a questionnaire were measuring performance in a way that was extremely similar to that of the Balanced Scorecard. This method of performance management has been implemented by government institutions, business and corporations as a whole, not-for-profit organisations, and sports organisations.

Standardised Balanced Scorecards are easy to come across and can have a positive impact on many organisations. However, using one organisation's Balanced Scorecard and attempting to apply it to another organisation can be very difficult and research has suggested that one of the major benefits of the Scorecard lies within the design process itself (Kurtzman, 1997). The Balanced Scorecard often experienced problems because of this issue during the initial stages of its growth, as they were often designed by consultants who may not have had specific knowledge of operations within the organisation. As a result of this, management became wary and failed to engage with the process due to the system being created by individual who were lacking knowledge of the organisation and specific responsibilities of management.

This analysis of performance management tools will continue with further investigation of systems such as the Performance Prism (Neely, 2002) and other applicable methods of measuring performance. Following on from this, the next chapter will focus solely on performance management principles and techniques within a sporting context and the various ways in which the unique dynamics of Irish Sport can have an affect on these processes.

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