1.0 both strategic and operational and can
1.0 INTRODUCTIONAND OVERVIEW”Performance Management” is about translatinggoals into results. Performance management integrates the managementof organisational and individual performances.
Thisassignment focusses on organizational performance management (OPM). A well-structured OPM creates and sustains a healthyand effective results-oriented culture. OPM requires both public and private sectors to define and measure results. Publicagencies are also required to comply with complex regulations that govern theirOPM. 2.
0 FUNCTIONS OF ORGANISATIONALPERFORMANCE MANAGEMENT As described in Textbook, Mackie, B. et.al. (2014, p.1), Organisational performance management (OPM), is a generic term fora range of tools, techniques and processes which can be used to promote andmonitor organizational health.
The Organisational performance management comprisesboth strategic and operational and can serve two distinct functions:i) Intra-organisational performancemanagement: Thisrequires the organisational management to periodically review and evaluateperformance standards attained and performance trajectories, taking correctiveaction as appropriate where deviations from the desired standards are detected. ii) Extra-organisational performancemanagement: Tocommunicate performance for the purposes of governance and accountability toorganisational stakeholders including Government, shareholders, funding bodies,audit agencies and the wider public.There is no legislative requirementfor the organization to have the intra-organisational performance management however, having a clear purpose and monitoring progress towards goal attainmentdoes promote a performance culture in organizations (public and private). There are often statutoryrequirements for public sector organisation to have extra-organisationalperformance management to maintain high standard of corporate governance,accountability and public reporting. 3.0 PERVASIVECHARACTERISTICSThe bestpractices for OPM have been summarized by global organization such as the WorldBank (2007), the US Government Accountability Office (GAO) (2007), the Organizationfor Economic Cooperation and Development (OECD) (2008).
They advocate OPM toincorporate certain pervasive characteristics. According to these influentialorganizations, the organizational performance management system should bemodelled on these pervasive characteristics. The characteristics are shown as below: i. High Level Aspirations Expressed as Outputs andOutcomes ii. Strategic Business Plan iii. Performance Measurement Tools andTechniques iv. Targets v. Implementation vi.
Monitoring vii. MeasuringResults viii. Verification ix. Communication x. Review and Evaluation xi. ContinuousSensitivity xii.
CommitmentIt is thesepervasive characteristics that serve as model for sustainable OPM. Of course, OPM is evolving globally, a morecomprehensive system is continuously being developed to cater the volatileenvironment in which organization operates. 4.
0 HOW EFFECTIVE IS THE OPM MODELLEDAGAINST PERVASIVE CHARACTERISTICS?There istremendous growth in organisations adopting some form of organizationalperformance management tool, techniques and processes. In 2012 global studyby Bain & Co, listed Strategic Planning as No 1, Benchmarking (TargetSetting) as fourth 4 and Balanced Scorecard (Monitoring, Measuring, andCommunicating Results) fifth on its top ten most widely used management toolsaround the world. These are example of tools and techniques that has been embeddedthe pervasive characteristics. Based on its global usage, there is an assumptionof enhanced organizational performance level and stakeholder satisfaction.However, as mentioned by Mackie,B.
et. al. (2014), there is alimitation in the empirical data confirming to what extent the pervasive characteristics oforganisational performance management is essential. Literature has supported that organisations canonly achieve its objective if the OPM system is religiously followed. Mostimportantly, the strategic must be aligned between aspiration andorganizational performance trajectories. The management has to continuouslymonitor its progress towards goals and take corrective measures wheredeviations detected. Only then, it become routine and integrated into OPMsystem. Someorganization fails in implementing an effective OPM.
These may be related toinsufficient understanding of the pervasive characteristics that are importantto enhance the effectiveness of OPM. According to Hicks and Gullett (1981), OPM introduce systematic controls namely pre-controls, concurrentcontrols and post controls in the management process to guide and monitor theactivities of the organization and its sub units. 4.1 Pre-Controls – Strategic and OperationalPlanning Strategicplanning are pre-controls that formalise the longer term strategic aspiration ofthe organization into outcomes. Theapproach to strategic planning is both top-down and bottom up.
In contrast, Operationalplanning (pre-controls) provides detailed guidance on how sub units contributeto the achievement of strategic aspiration achievement in short to medium term. 4.2 Concurrent ControlThe aim is tomonitor inputs, process and output to ascertain that the organization is movingin the right direction. There are numberof management tools used for this concurrent controls including Dashboard andBalanced Scorecard.4.2.1 DashboardWhereperformance targets are established. Frequent review of target and makeoperational adjustments.
Dashboardare generally enhanced with “traffic light” colour coding system (RAG),tracking performance against targets. “R” for Red being significant issue wheremanagement intervention required; A for AMBER being decision made to watch thesituation and G for GREEN, it is according to the plan. t is about measuringthe progress, taking corrective actions and keeping the stakeholders informed.4.2.2 BalancedScorecard (Kaplan and Norton, 1992)Provides a disciplined framework for planning and measuring strategyfrom four perspectives simultaneously.
It includes financial measures that tellthe results of action taken and it complements with other three measuresinvolving customer satisfaction, internal processes and the organisation’sability to learn and improve; activities that drive future financialperformance. 4.2 Post ControlIt is acorrective action taken after event to provide quantitative and qualitativeevaluation by way of reporting the annual financial statements, inspection andauditing outcome. 5.
0 IDEALOPM IMPLEMENTATION OPM canbe effectively managed to certain extent by referring to the PerfectImplementation model (Gunn 1978; Mackie 2004). This is merely an aid tounderstand the challenges and provide guidance for improvement. Listed a few belowto illustrate: 5.1 No externalconstraintInreality an effective leader has to be sensitive to factors which may affect inachieving its target and need to continuously monitor the environment usingtechnique like PESTEL.
5.2 PerfectCommunicationAccurate and timely transmission and receiving information leads toappropriate and timely actions. Management information systems, delivering dataas close to “real time” and accurate as possible is being used. (Fesler, 1980 and Dunsire, 1978). 5.
3 StakeholderSupportStakeholders being consulted and informed on the effectiveness ofOPM. The OPM result has to be revealed and stakeholder’s support can only beharnessed if they see positive outcome or benefits accruing to them. 5.4 Risk Assessment and ManagementOPM system should incorporate continuous riskassessments and management at all organizational levels. Its effectiveness complementsthe strategic planning. Good risk management also provide confidence to thestakeholder on the organisation’s corporate governance.
This literature only intends to list a few factors that areinter-related which will influence successful implementation of OPM system. 6.0 CONCLUSION Although there is absence of empirical data confirming the effectivenessof pervasive characteristic in OPM, nevertheless organisations globally pursue thedevelopment of more comprehensive tools and techniques to manage theorganisational health and well-being. It is crucial that organisations respondto these challenges by developing and implementing a multi focused system thattakes into consideration the diversification and complexity of organizational strategicand operational objectives.
