Strategic Performance Management In The Business Commerce Essay

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The strategic performance management concept, the main objectives of that are to make fundamental decisions and actions that shape and guide what an organization is, what it does, and why it does it, with a focus on the future. In short, for long-term growth of the organisational strategy and strategic objectives, SPM is the underlying factor.

Armstrong and Baron define performance management as 'a process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved' (Cannell, 2010).

SPM is the blueprint for planning the next development steps of performance management in organisation. It displays how to:

Define the leadership constraints.

Determine the present maturity level and what is required to grow.

Emphasis on actions of future development and provide information

Make benefits from investments.

Design and organize business development and adapt as the capability changes.

The strategic planning is a multifarious, challenging process, but it is always focused on the basic goals stated above. Strategic planning infers that some organizational decisions and actions have more weightage than others as it's impossible to do everything that needs to be done at the same time. So, it is all about making the tough decisions and what are the most demanding measures to be taken as it happens.

Perception of SPM in Organizations:

There is often a narrower view towards performance management. The employees often try to resist performance management. The reasons behind this could be

Employees think that it will do nothing good to them.

They often take it as criticism of their work.

Sometimes managers don't really apply the outcome to the organization.

In many small organizations SPM is considered waste of time.

Employee and also the employees don't have a clear understanding what is SPM and what it might do to the organization.

Task 2

This section discusses about the key aspects of Armstrong's Performance Management theory and their impact on the performance of the organization.

Armstrong's Performance Management theory:

Armstrong and Baron define performance management as 'a process which contributes to the effective management of individuals and teams in order to achieve high levels of organizational performance. As such, it establishes shared understanding about what is to be achieved and an approach to leading and developing people which will ensure that it is achieved' (Cannell, 2010).

In short performance management should be

Strategic - it is must have long-term goals

Integrated - it should bond between important factors like business growth, HRM, qualities of individuals and teams.

It should incorporate:

Performance improvement


Behavior Management 

However, Armstrong has suggested many factors those are important for performance management. But some of them are more important than others. Role definition provides frame work for performance management. It sets out three things, purpose, the result areas and capabilities. Performance review is also important as it discusses on the perspective to be obtain on past performance as a basis for making plans for the future. Performance planning is a work and people related activity that focuses what has to be done, how is it done and what is achieved. The development plans records the actions agreed to improve performance and to develop knowledge, skills and capabilities. Performance agreement defines role requirements objectives and standards of performance knowledge skills and capabilities, performance measures and indicators, corporate core values and requirements (J.I., 1986).

TCS (Private) Limited [1] : TCS came into being in 1983 as a domestic courier company to fill a void that arose due to the Government of Pakistan denying foreign courier companies the right to operate locally. The TCS journey since its inception has been exhilarating TCS logistics service company maintaining the Armstrong's performance management theory.

The Experience on Work of TCS:

Factors affecting Performance as defined above is affected by a number of following factors, all of which should be taken into account when managing, measuring, modifying and Rewarding performance they comprise:

. Personal: the individual's skill, confidence, motivation and commitment of company affecting their personnel.

. Leadership: the quality of encouragement, guidance and support provided by the managers and team leaders of this company's.

. Team: the quality of support provided by colleagues excellently of this company's.

. System: the system of work and facilities provided by the company's.

. Contextual (situational) factors: internal and external environmental pressures and changes are much better of this company's.

Task- 3

This section discusses about the 7-S model and its application. Further the 7-S framework is used to evaluate a team performance plan to meet organizational objectives

7-S Model of Mckinsey:

The McKinsey 7S Framework is a management model developed by well-known business consultants Waterman and Peters  in the 1980s. This was a strategic vision for groups, to include businesses, business units, and teams. The 7S are structure, strategy, systems, skills, style, staff and shared values (Ethan M.Rasiel, 2010).

To assess and monitor changes in the internal situation of an organization-this model is often used.

Strategy: A set of actions that you start with and must maintain.

Strategy are plans an organization that formulates to reach identified goals through a set of decisions and actions aimed at gaining a sustainable advantage over the competition.


Structure is the way by which organizational units relates to each other. Structure is the organizational chart and associated information that shows who reports to whom and how tasks are both divided up and integrated. In other words, structures describe the hierarchy of authority and accountability.

Systems : All the procedures, processes and routine that characterize how the things should be done.

Style Style" refers to the cultural style of the organization, how key managers behave in achieving the organization's goals, how managers collectively spend their time and attention.

Staff: "Staff" refers to the number and types of personnel within the organization and how companies develop employees and shape basic values.

Superordinate Goals: Longer-term vision, and all that values staff, that shapes the destiny of the organization.

Skills: Distinctive capabilities of personnel or of the organization as a whole.

Modified 7-S model in my organization:

I want to apply some modification that may feet well for my organization For example, in my organization, my main goal is to sustain long-term profitable growth & which I can achieve by making more sales.

Secondly, my organization has some imperative values like good customer service, teamwork, meeting of challenges, respect amongst each other, etc.

In order to increase the sales of my business, I have a marketing division which deals with the media. Besides that I have a MIS division which helps me to record, analyze & maintain my company's sales & also the projection of future sales.

Also, I have an HR department in my organization in order to recruit more efficient & appropriate workforce & thereby increasing organization's future profit


In an organization successful implementation requires proper alignment of different activities & processes. This includes structure, resource allocation, staffing, skills, style, rewards & incentives, policies & procedures, shared values & abilities (Srinivasan, 2008).

Alignment is a correct mix of of tools to achieve overall goal. There are three components

Mind (financial dimension),

Body (structure) and

Spirit (corporate culture).

Alignment is an on-going process, not an one time issue. The destination is easy to attain when all features of a complex situation or organization are in alignment. However, alignment does not necessarily promise success in anything, rather it does increase the probability of success.

However, misalignment may occur. It is also common in many organizations. It is mainly due to rivalry for between unlike departments, lack of proper communication, customary differences, lack of preparation etc.

Task 4

This section talks about important phenomena in organization-Leadership. Some associated theories and examples are also discussed in here.


Leadership defined as the process of social influence in which one person can enlist the aid and support of others in order to accomplish a common goal. Definitions more inclusive of followers have also emerged. Alan Keith of Genentech states that, "Leadership is ultimately about creating a way for people to contribute to making something extraordinary happen." In other words, when people think about leadership, images come to mind of powerful dynamic individuals who command victorious armies, shape the events of nations, develop relations, or direct corporate empires (Achua, 2010).

The qualities of a good leader are given below

A good leader has an exemplary character. 

A good leader is enthusiastic about their work or cause and also about their role as leader. 

A good leader is confident. 

A leader also needs to function in an orderly and purposeful manner in situations of uncertainty. 

Good leaders are tolerant of ambiguity and remain calm, composed and steadfast to the main purpose.

A good leader as well as keeping the main goal in focus is able to think analytically. 

He/she has to be committed to excellence.

Theories of Leadership:

Leadership is "organizing a group of people to achieve a common goal." The leader may or may not have any formal authority. Students of leadership have produced theories involving traits, situational interaction, function, behavior, power, vision and values, charisma, and intelligence among others

Trait Theory: This idea that leadership is based on individual attributes is known as the  Trait theory (Achua, 2010).

Leadership Style Theory: Leadership takes a strong personality with a well-developed positive ego. Not so much as a pattern of motives, but a set of traits is crucial.This theory describes what successful leaders do.

Action-Centred Leadership: This theory broadens the idea of a task & the people orientation. It was originated in UK.

Behavioral Leadership: This theory of leadership attempts to clarify the different styles used by the effective leaders (Lussier & Achua, 2010).

Contingency Theory: he theory defined two types of leader: those who tend to accomplish the task by developing good-relationships with the group (relationship-oriented), and those who have as their prime concern carrying out the task itself (task-oriented) (Fiedler, 1967).

Transactional Theory: This theory is also known as 'exchange' theory of leadership. "Transactional leadership tends to be transitory; in that once a transaction is completed the relationship between the parties may end or be redefined" (Lussier & Achua, 2010, P-354).

Transformational Theory: The transformational leader (Burns, 1978) motivates its team to be effective and efficient. Communication is the base for goal achievement focusing the group on the final desired outcome or goal attainment. This leader is highly visible and uses chain of command to get the job done. 

He must be able to challenge the status-quo;

He must be able to inspire the people for a common vision;

He must be able to provide efficient leadership during the transition;

He must be able to make the change a permanent part of the organization.

Difference between Transactional Vs. Transformational Theory:

Transactional Theory

Transformational Theory

Transactional leaders do not tend to bother with the motivational or emotional needs of the followers.

Transformational leadership provides a more effective approach to leading.

Transactional leaders are those who lead through the same form of change.

Transformational leaders challenge followers to become problem solvers.

Transactional leaders offer safety & security to a business rather than receiving votes from their followers

Transformational leaders serve as role models for their followers.

Assessing Leadership in Organization:

The transactional leader (Burns, 1978) is given power to perform certain tasks and reward or punish for the team's performance. It gives the opportunity to the manager to lead the group and the group agrees to follow his lead to accomplish a predetermined goal in exchange for something else. Power is given to the leader to evaluate, correct and train subordinates when productivity is not up to the desired level and reward effectiveness when expected outcome is reached.

In my organization managers has the power to lead the group, evaluate group members and arrange proper training. They have the authority to band any members from the group.


A 'Team' comprises a group of people or animals linked in a common purpose. Teams are especially suitable for conducting tasks that are high in complexity and have many interdependent subtasks.

Advantages of Team work:

- more information and knowledge is focused on the issue

- A greater number and diversity of alternatives can be developed

- better understanding and acceptance of the final decision

- members develop knowledge and skills for future use

- shared responsibility - willing to take more risks

As a manager of an organization, I have led many teams. From my view point some strengths & weaknesses of my team are given below:

In our team

everyone takes some responsibility for making sure that we are on track.

all necessary information are available to all its members for doing things effectively.

the atmosphere is open & participative.

Sometimes few members try to dominate other members to show their superiority and often they try to withhold important information from other members to get the upper hand.


As a leader of the group managers should connect successfully with their workforce to build assurance and to motivate which in turn improves the business. Team development is a continuously changing & recursive process. Some important measures that I have used for team development are given below

Empowering team structure by giving strong organizational support.

Strong organizational support;

Always follow clear communication to avoid misunderstanding situations

Clear mention of the goal.

Fair and efficient recruitment

Employee training

Task -5

This section talks about quality performance models and their advantages and limitations.

Quality/performance management models:

There are various models to measure the performance of the employees. The three models that I am most likely to accept are given below:

(1). ISO 9001 Quality System,

(2). Six Sigma Model,

(3). Performance Prism.


"The Performance Prism framework is a concept which mainly provides a procedure model for the construction of a performance measurement system" (Pinterits, 2008, P-38). In this model, the relevant stake holders are identified & the performance measurement system is built around them. There are five basic steps where the features on performance are identified which are stakeholder satisfaction, strategies, processes, capabilities & stakeholder contribution.

I would prefer to choose this model for my business as it will provide the outline for planning my business process. There is no maximum numbers of measures included in this system thus, this model offers no prevention of adding too much complexity in my business.


The principles of the Performance Prism have been applied at TCS globally, the international express courier. The following narrative outlines the key events that led to TCS's executive team adopting a new performance measurement system for their business by applying the Performance Prism framework. TCS Pakistan began implementation of the Performance Prism. TCS's internal measure of profitability. They would also review the division's operational performance.


Success Mapping

Measures Design

The Ten Tests

Stakeholder Satisfaction

Stakeholder Contribution




performance paragim.jpg

Figure: TCS Pakistan Success map [3] 

Figure [4] : The Process of Performance Prism

TCS maintain the Principles of performance prism measurement

Work that is not measured or assessed cannot be managed because there is no objective information to determine its value.

Unmeasured work should be minimized or eliminated.

Desired performance outcomes must be established for all measured work.

Outcomes provide the basis for establishing accountability for results rather than just requiring a level of effort.

Desired outcomes are necessary for work evaluation and meaningful performance appraisal.

Defining performance in terms of desired results is how managers and supervisors make their work assignments operational.

Performance reporting and variance analyses must be accomplished frequently.

Frequent reporting enables timely corrective action.

Timely corrective action is needed for effective management control.

Two Rejected methods:

Balance Score card:

The Balanced Scorecard has always attracted criticism. Most people dislike the empirical nature of the framework: Kaplan and Norton notoriously failed to include any citation of prior art in their initial papers on the topic. Some of this criticism focuses on technical flaws in the methods and design of the original Balanced Scorecard proposed by Kaplan and Norton, (Norreklit, 2000) and has over time driven the evolution of the device through its various Generations. Other academics have simply focused on the lack of citation support. (Norreklit, 2000)But a general weakness of this type of criticism is that it typically uses the 1st Generation Balanced Scorecard as its object: many of the flaws identified are addressed in other works published since the original Kaplan & Norton works in the early 1990s.

Statistical Process Control:

This model is mostly technical in nature & simply the technical arm of the quality management system. "This model concentrates on the finding process variations; correcting these variations depends on the creativity & ingenuity of the people involved" (Doty, 1996, P-1). It is used in the service type industries.

In my opinion I would not prefer to choose this model for my business as often the variable analysis can lead to operational failure of manufacturing plants & their associated instruments. Also the process malfunctions can lead to the reduced product quality, increased re-working, plant shut-down, etc of my business.

Task 6

Maslow's hierarchy of needs:

It is a theory in psychology, proposed by Abraham Maslow in his 1943 paper A Theory of Human Motivation. (Maslow, 1943) Maslow subsequently extended the idea to include his observations of humans' innate curiosity. His theories parallel many other theories of human developmental psychology, all of which focus on describing the stages of growth in humans.

Application Of Maslow's Theory:

Understanding the strengths and weakness of Maslow's hierarchy of needs is important in the field of international business. Evaluating the different needs, values, drives and priorities of people from different countries - individualistic or collectivist - is incredibly valuable in cross-cultural communications, and especially within the workplace. It also illustrates how differences in values can greatly affect work atmosphere and work ethic between cultures: " For example, societal cultures in many individualistic countries, such as the UK, may lead to an advantage in technological research and development. Many collectivistic societal cultures, such as that in Japan, may result in an advantage in workforce organization, quality control of products and service, and establishment of good relationships among contractees, suppliers and customers".


In their extensive review of research based on Maslow's theory, Wahba and Bridgewell found little evidence for the ranking of needs Maslow described or even for the existence of a definite hierarchy at all. Chilean economist and philosopher Manfred Max-Neef has also argued fundamental human needs are non-hierarchical, and are ontologically universal and invariant in nature-part of the condition of being human; poverty, he argues, may result from any one of these needs being frustrated, denied or unfulfilled.

Herzberg's motivation-hygiene theory:

This states that there are certain factors in the workplace that cause job satisfaction, while a separate set of factors cause dissatisfaction. It was developed by Frederick Herzberg, a psychologist, who theorized that job satisfaction and job dissatisfaction act independently of each other. (Herzberg, 1959)

Application of Herzberg's motivation-hygiene theory:

In 1968 Herzberg stated that his two-factor theory study had already been replicated 16 times in a wide variety of populations including some in Communist countries, and corroborated with studies using different procedures that agreed with his original findings regarding intrinsic employee motivation making it one of the most widely replicated studies on job attitudes.


A number of behavioral scientists have pointed to inadequacies in the need hierarchy and motivation-hygiene theories. The most basic is the criticism that both of these theories contain the relatively explicit assumption that happy and satisfied workers produce more. Another problem is that these and other statistical theories are concerned with explaining "average" behavior and, on the other hand, if playing a better game of golf is the means chosen to satisfy one's need for recognition, then one will find ways to play and think about golf more often, perhaps resulting in an accompanying lower output on the job. Finally, in his pursuit of status a person might take a balanced view and strive to pursue several behavioral paths in an effort to achieve a combination of personal status objectives.

Task 7

In this section evaluation of team performance against agreed objectives of the plan is discussed and also evaluation of the impact of the team performance in contributing to meeting strategic objectives is analyzed.

Performance measurement in my company:

When an organization establishes the parameters within which programs, investments, and acquisitions are reaching the desired results, then it is called performance measurement.

This process of measuring performance often requires the use of statistical evidence to determine progress toward specific defined organizational objectives.In my organization I will follow the following method

Performance Prism:

"The Performance Prism framework is a concept which mainly provides a procedure model for the construction of a performance measurement system" (Pinterits, 2008, P-38). In this model, the relevant stake holders are identified & the performance measurement system is built around them. There are five basic steps where the features on performance are identified which are stakeholder satisfaction, strategies, processes, capabilities & stakeholder contribution.

I would prefer to choose this model for my business as it will provide the outline for planning my business process. There is no maximum numbers of measures included in this system thus, this model offers no prevention of adding too much complexity in my business.

Strengths and weaknesses of the employees:

I will look for

Good communication skills.

Ability to understand the situation.

Adaptation to the problem on hand.

Team work capabilities

Working under stress.

Ability to meet datelines.

I will consider the following things as weaknesses

Individual who want to work solo.

Can't take pressure

Not open to other team members.

Not sound in understanding the problem

Task 8

This task discussed the actions of a manger in the organizations. The growth and the ability to reach goal of the organization depends on the role of the manager to a great extent.

Actions of a Manager:

Encouraging Team/individual

It is important for the public managers to encourage and convince team members, political superiors, legislators, stakeholders, journalists, and citizens that they are doing a good job.

I do it in my organization by validating success; justifying additional resources; earn customers, stakeholder, and staff loyalty by showing results; and wining recognition inside and outside the organization.

Evaluate team performance

I follow specific model in my organization to evaluate the team performance.

I try to be neutral and rational in the evaluation. Evaluation is done based on some predefined standards and also some others factors

Determine required performance targets

It is based on previous year's achievement and the growth of the company. Also the performance of the employees plays an important factor.

Influencing and persuading methodologies

I give people significant goals to achieve and then use performance measures- including interim targets- to focus people's thinking and work, and to provide periodic sense of accomplishment.

Performance targets may also encourage creativity in developing better ways to achieve the goal . Thus measure to motivate improvements may also motivate learning.

I have motivated significant improvements using output targets, they can create some outcomes targets.

"output"- focuses on improving internal process.

"outcome"- motivate people to look outside the agency.

Roles performed by managers

managers' schedules are usually jam-packed. Whether they're busy with employee meetings, unexpected problems, or strategy sessions, managers often find little spare time on their calendars. (And that doesn't even include responding to e-mail!)

In his classic book, The Nature of Managerial Work, Henry Mintzberg describes a set of ten roles that a manager fills. These roles fall into three categories:

Interpersonal: This role involves human interaction.

Informational: This role involves the sharing and analyzing of information.

Decisional: This role involves decision making.

Table 1 contains a more in-depth look at each category of roles that help managers carry out all five functions described in the preceding "Functions of Managers" section.


Mintzberg's Set of Ten Roles






Seek and receive information; scan periodicals and reports; maintain personal contact with stakeholders.


Forward information to organization members via memos, reports, and phone calls.


Transmit information to outsiders via reports, memos, and speeches.



Perform ceremonial and symbolic duties, such as greeting visitors and signing legal documents.


Direct and motivate subordinates; counsel and communicate with subordinates.


Maintain information links both inside and outside organization via mail, phone calls, and meetings.



Initiate improvement projects; identify new ideas and delegate idea responsibility to others.

Disturbance handler

Take corrective action during disputes or crises; resolve conflicts among subordinates; adapt to environments.

Resource allocator

Decide who gets resources; prepare budgets; set schedules and determine priorities.


Represent department during negotiations of union contracts, sales, purchases, and budgets.

Skills needed by managers

Not everyone can be a manager. Certain skills, or abilities to translate knowledge into action that results in desired performance, are required to help other employees become more productive. These skills fall under the following categories:

Technical: This skill requires the ability to use a special proficiency or expertise to perform particular tasks. Accountants, engineers, market researchers, and computer scientists, as examples, possess technical skills. Managers acquire these skills initially through formal education and then further develop them through training and job experience. Technical skills are most important at lower levels of management.

Human: This skill demonstrates the ability to work well in cooperation with others. Human skills emerge in the workplace as a spirit of trust, enthusiasm, and genuine involvement in interpersonal relationships. A manager with good human skills has a high degree of self-awareness and a capacity to understand or empathize with the feelings of others. Some managers are naturally born with great human skills, while others improve their skills through classes or experience. No matter how human skills are acquired, they're critical for all managers because of the highly interpersonal nature of managerial work.

Conceptual: This skill calls for the ability to think analytically. Analytical skills enable managers to break down problems into smaller parts, to see the relations among the parts, and to recognize the implications of any one problem for others. As managers assume ever-higher responsibilities in organizations, they must deal with more ambiguous problems that have long-term consequences. Again, managers may acquire these skills initially through formal education and then further develop them by training and job experience. The higher the management level, the more important conceptual skills become.

Although all three categories contain skills essential for managers, their relative importance tends to vary by level of managerial responsibility.

Business and management educators are increasingly interested in helping people acquire technical, human, and conceptual skills, and develop specific competencies, or specialized skills, that contribute to high performance in a management job. Following are some of the skills and personal characteristics that the American Assembly of Collegiate Schools of Business (AACSB) is urging business schools to help their students develop.

Leadership - ability to influence others to perform tasks

Self-objectivity - ability to evaluate yourself realistically

Analytic thinking - ability to interpret and explain patterns in information

Behavioral flexibility - ability to modify personal behavior to react objectively rather than subjectively to accomplish organizational goals

Oral communication - ability to express ideas clearly in words

Written communication - ability to express ideas clearly in writing

Personal impact - ability to create a good impression and instill confidence

Resistance to stress - ability to perform under stressful conditions

Tolerance for uncertainty - ability to perform in ambiguous situations