Performance Management and Performance Management and Strategic PlanningStrategic Planning

OverviewOverview

Definition and Purposes of Strategic Definition and Purposes of Strategic PlanningPlanning

Linking Performance Management to Linking Performance Management to the Strategic Planthe Strategic Plan• Strategic Planning Strategic Planning • Developing Strategic Plans at the Unit LevelDeveloping Strategic Plans at the Unit Level• Job DescriptionsJob Descriptions• Individual and Team PerformanceIndividual and Team Performance

Building SupportBuilding Support

Strategic Planning: Definition Strategic Planning: Definition

ProcessProcess•Describe organization’s Describe organization’s

destinationdestination•Assess barriersAssess barriers•Select approaches for Select approaches for

moving forwardmoving forward

Strategic Planning: GoalStrategic Planning: Goal

Allocate resources to provide Allocate resources to provide organization with competitive organization with competitive advantageadvantage

Strategic Planning: PurposesStrategic Planning: Purposes Help define the organization’s identityHelp define the organization’s identity Help organization prepare for the Help organization prepare for the

futurefuture Enhance ability to adapt to Enhance ability to adapt to

environmental changeenvironmental change Provide focus and allow for better Provide focus and allow for better

allocation of resourcesallocation of resources

(continued on next slide)

Strategic Planning: PurposesStrategic Planning: Purposes

Produce an organizational Produce an organizational culture of cooperationculture of cooperation

Allow for the consideration of Allow for the consideration of new options and opportunitiesnew options and opportunities

Provide employees with Provide employees with information to direct daily information to direct daily activitiesactivities

Strategic Planning : OverviewStrategic Planning : Overview

1.1. Environmental AnalysisEnvironmental Analysis

2.2. MissionMission

3.3. VisionVision

4.4. GoalsGoals

5.5. StrategiesStrategies

Environmental AnalysisEnvironmental Analysis

Identifies external and internal Identifies external and internal trendstrends

To understand broad industry To understand broad industry issuesissues

To make decisions using “big To make decisions using “big picture” contextpicture” context

External trendsExternal trends Opportunities:Opportunities:

• environmental characteristics that environmental characteristics that can can helphelp the organization succeed the organization succeed

Threats: Threats: • environmental characteristics that environmental characteristics that

can can preventprevent the organization from the organization from being successfulbeing successful

External trends – External trends – Factors to ConsiderFactors to Consider

EconomicEconomic Political/Legal Political/Legal Social Social TechnologicalTechnological

CompetitorsCompetitors CustomersCustomers SuppliersSuppliers

Internal trendsInternal trends

Strengths:Strengths: • internal characteristics that the internal characteristics that the

organization can organization can use for its use for its advantageadvantage

Weaknesses:Weaknesses: • internal characteristics that can internal characteristics that can

hinder the successhinder the success of the of the organizationorganization

Internal trends – Internal trends – Factors to ConsiderFactors to Consider

Organizational structureOrganizational structure Organizational cultureOrganizational culture PoliticsPolitics ProcessesProcesses SizeSize

Gap AnalysisGap Analysis

Analyzes:Analyzes:External environment External environment

(opportunities and threats)(opportunities and threats)

vis-à-visvis-à-vis

Internal environmentInternal environment(strengths and weaknesses)(strengths and weaknesses)

Gap analysis determines:Gap analysis determines:Opportunity +Opportunity + Strength = Strength =

LeverageLeverage

Opportunity + Weakness = Opportunity + Weakness = ConstraintConstraint

Threat + Strength = Threat + Strength = Vulnerability Vulnerability

Threat + Weakness = Threat + Weakness = ProblemProblem

Strategic Planning for the Strategic Planning for the OrganizationOrganization

Environmental and Gap Environmental and Gap Analyses provide information Analyses provide information for organizations to decide:for organizations to decide:Who they areWho they areWhat they doWhat they do

MissionMission

A good A good missionmission statement answers: statement answers: Why does the organization exist?Why does the organization exist? What is the scope of the What is the scope of the

organization’s activities?organization’s activities? Who are the customers served?Who are the customers served? What are the products or services What are the products or services

offered?offered?

Mission Statement contains:Mission Statement contains:

Information on organization’sInformation on organization’s Basic product/service to be offeredBasic product/service to be offered Primary market/customer groupsPrimary market/customer groups Unique benefits and advantages of Unique benefits and advantages of

product/servicesproduct/services Technology to be usedTechnology to be used Concern for survival through Concern for survival through

growth and profitabilitygrowth and profitability

Mission Statement Mission Statement maymay contain: contain:

Information on organization’s values and Information on organization’s values and beliefsbeliefs Managerial philosophyManagerial philosophy Public image sought by organizationPublic image sought by organization Self-concept of business adopted bySelf-concept of business adopted by

EmployeesEmployees StockholdersStockholders

VisionVision

Statement of future aspirationsStatement of future aspirations Focuses attention on what is Focuses attention on what is

importantimportant Provides context for evaluatingProvides context for evaluating

• OpportunitiesOpportunities• ThreatsThreats

A Good Vision Statement:A Good Vision Statement: 8 Characteristics8 Characteristics

1.1. BriefBrief

2.2. VerifiableVerifiable

3.3. Bound by a TimelineBound by a Timeline

4.4. CurrentCurrent

A Good Vision Statement:A Good Vision Statement: 8 Characteristics 8 Characteristics (continued)(continued)

5.5. FocusedFocused

6.6. UnderstandableUnderstandable

7.7. InspiringInspiring

8.8. A stretchA stretch

Purposes for Setting GoalsPurposes for Setting Goals

Formalize expected achievementsFormalize expected achievements Provide motivationProvide motivation Provide tangible targets Provide tangible targets Provide basis for good decisionsProvide basis for good decisions Provide basis for performance Provide basis for performance

measurementmeasurement

StrategiesStrategies

Create strategies or Game Plans or Create strategies or Game Plans or “How to” procedures to address “How to” procedures to address issues of:issues of:• GrowthGrowth• SurvivalSurvival• TurnaroundTurnaround• StabilityStability• InnovationInnovation• LeadershipLeadership

How the HR Function How the HR Function contributes:contributes:

Communicate knowledge of Communicate knowledge of strategic planstrategic plan

Provide knowledge of KSAs Provide knowledge of KSAs needed for strategy needed for strategy implementationimplementation

Propose reward systemsPropose reward systems

Strategic Plans at the Unit LevelStrategic Plans at the Unit Level

Organization Organization Mission Mission statement, Vision statement, statement, Vision statement, Goals, and StrategiesGoals, and Strategies

Must clearly Must clearly alignalign with with

And And be congruentbe congruent with with EveryEvery Unit Unit Mission statement, Mission statement,

Vision statement, Goals, and Vision statement, Goals, and StrategiesStrategies

Alignment of Strategic Plan with Alignment of Strategic Plan with PerformancePerformance

Organization’s Strategic PlanMission, Vision, Goals, Strategies

Unit’s Strategic PlanMission, Vision, Goals,

StrategiesJob Description

Tasks, KSAs

Individual and Team PerformanceResults, Behaviors, Developmental Plan

Critical to involve all levels of management

Critical to involve all employees

Job DescriptionsJob Descriptions

Tasks and KSAs are Tasks and KSAs are congruent with Organization congruent with Organization and Unit strategic plansand Unit strategic plans

Activities described support Activities described support mission and vision of mission and vision of Organization and UnitOrganization and Unit

Individual and Team Individual and Team PerformancePerformance

Organization and Unit mission, Organization and Unit mission, vision, goals lead tovision, goals lead to

Performance management system, Performance management system, whichwhichMotivates employees Motivates employees Aligns development plans with Aligns development plans with

organization prioritiesorganization priorities

Strategic Plan Strategic Plan 6 Choices in PM System Design6 Choices in PM System Design

1.1. Criteria (Behavior vs. Results)Criteria (Behavior vs. Results)

2.2. Participation (Low vs. High)Participation (Low vs. High)

3.3. Temporal Dimension (Short Temporal Dimension (Short Term vs. Long Term)Term vs. Long Term)

Strategic Plan Strategic Plan 6 Choices in PM System Design 6 Choices in PM System Design

(continued)(continued)4.4. Level of Criteria (Individual vs. Level of Criteria (Individual vs.

Team/Group)Team/Group)

5.5. System Orientation System Orientation (Developmental vs. (Developmental vs. Administrative)Administrative)

6.6. Rewards (Pay for Performance Rewards (Pay for Performance vs. Tenure/Position)vs. Tenure/Position)

Building Support – Building Support – Answering “What’s In It for Me?”Answering “What’s In It for Me?”

Top Management: Top Management: • Help carry out visionHelp carry out vision

All levels: All levels: • Involvement Involvement • Participation Participation • UnderstandingUnderstanding

Quick ReviewQuick Review

Definition and Purposes of Strategic Definition and Purposes of Strategic PlanningPlanning

Linking Performance Management to Linking Performance Management to the Strategic Planthe Strategic Plan• Strategic Planning Strategic Planning • Developing Strategic Plans at the Unit LevelDeveloping Strategic Plans at the Unit Level• Job DescriptionsJob Descriptions• Individual and Team PerformanceIndividual and Team Performance

Building SupportBuilding Support