Mohinder Singh Mcs Term Paper

8/9/2019 Mohinder Singh Mcs Term Paper

1/19

TERM

PAPER OFMANAGEMENT

CONTROL SYSTEM

TOPIC- STRATEGY AND PERFORMANCE MANAGEMENT SYSTEM

SUBMITTED TO: SUBMITTED BY:MR.SACHIN KASHYAP MOHINDER SINGH

LECT. IN LIM 10803294

RT1802-A20

MBA


2/19

ACKNOWLEDGEMENT

I owe a great many thanks to a great many people

who helped and supported me during the writing of this

book.

My deepest thanks to Lecturer, MR. SACHIN

KASHYAP the Guide of the project for guiding and

correcting various documents of mine with attention and

care. He has taken pain to go through the project and

make necessary correction as and when needed.

I would also thank my Institution and my faculty members without

whom this project would have been a distant reality. I also extend my

heartfelt thanks to my family and well wishers.


3/19


4/19

STRATEGIC MANAGEMENT SYSTEM- INTRO

Strategic management system is the conduct of drafting, implementing and evaluating cross-

functional decisions that will enable an organization to achieve its long-term objectives. It is the

process of specifying the organization's mission, vision and objectives, developing policies and

plans, often in terms of projects and programs, which are designed to achieve these objectives,

and then allocating resources to implement the policies and plans, projects and programs.

Abalanced scorecard is often used to evaluate the overall performance of thebusiness and its

progress towards objectives.

Strategic management is a level of managerial activity under setting goals and overTactics.

Strategic management provides overall direction to the enterprise and is closely related to the

field ofOrganization Studies. In the field of business administration it is useful to talk about

"strategic alignment" between the organization and its environment or "strategic consistency".

According to Arieu (2007), "there is strategic consistency when the actions of an organization

are consistent with the expectations of management, and these in turn are with the market and

the context.

Strategic management system is an ongoing process that evaluates and controls the business and

the industries in which the company is involved; assesses its competitors and sets goals and

strategies to meet all existing and potential competitors; and then reassesses each strategy

annually or quarterly [i.e. regularly] to determine how it has been implemented and whether it

has succeeded or needs replacement by a new strategy to meet changed circumstances, new

technology, new competitors, a new economic environment., or a new social, financial, or

political environment

Key Benefits of a Strategic Management System

Taking an organization-wide, proactive approach to a changing global world

Building an executive team that serves as a model of cross-functional or horizontal

teamwork

Having an intense executive development and strategic orientation process

Defining focused, quantifiable outcomes measures of success
http://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Mission_statementhttp://en.wikipedia.org/wiki/Balanced_scorecardhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Tactic_(method)http://en.wikipedia.org/wiki/Organization_Studieshttp://en.wikipedia.org/wiki/Organizationhttp://en.wikipedia.org/wiki/Mission_statementhttp://en.wikipedia.org/wiki/Balanced_scorecardhttp://en.wikipedia.org/wiki/Businesshttp://en.wikipedia.org/wiki/Tactic_(method)http://en.wikipedia.org/wiki/Organization_Studies


5/19

Making intelligent budgeting decisions

Clarifying your competitive advantage

Reducing conflict; empowering the organization

Providing clear guidelines for day-to-day decisiion making

Creating a critical mass for change

INTRO:-Performance management

Performance management is an excellent method of helping organization deliver lasting

improvement. It does this by ensuring individuals, teams, and ultimately the organisation, know

what they should be doing, how they should be doing it and take responsibility for what they

achieve.

It is about placing the emphasis on managing, supporting and developing staff at all levels in the

organization. An integral part of this is the need to monitor performance, reward staff that

perform well, and challenge those who do not.

For performance management to work well it is crucial that senior management can

communicate effectively across the organisation and ensure that employees fully understand the

organization's key corporate objectives and the reasons behind them.

Benefits of Performance Management

Having an effective performance management system has multiple benefits for organization,

ultimately resulting in better, more efficient, services. These are:-

1. It means everyone knows where the organization is going, as there is a clear focus on key

objectives and priorities. This level of clarity helps to correctly direct resources, which

means there are less instances of over and under resourcing.


6/19

2. It makes life more satisfying for employees because they know what is expected of them,

and how this fits into the bigger picture, but also that they can call on extra support to

help them to perform well.

3. As the whole emphasis is on meeting set criteria and meeting targets, it is easier to

monitor how services are performing and to take action to intervene and improve where

necessary.

4. It helps organization to meet their legal responsibilities in employment in terms of health

and safety, equality and diversity. Employees and the organization itself will be bound by

implied and explicit contractual terms, such as codes of conduct, the duty of mutual trust

and confidence and the duty to obey reasonable instructions, as well as health and safety

and equalities legislation. Legal issues will also arise in cases where the organization

seeks performance improvement or decides to terminate employment on the grounds of

the employee's incapability to do their job.

Equality and diversity are important aspects of performance management. Not only does the

organization's managing diversity approach impact upon its overall performance rating through

the Best Value Performance Indicators it also impacts upon how performance is managed

within the organisation. A performance management approach that recognises and promotes

diversity, while supporting fairness and equity will ensure that people are selected and developed

on the basis of their capability to do the job.

PERFORMANCE MANAGEMENT SYSTEM

Performance management system (PMS) is the heart of any people management process in

organization. Organizations exist to perform. If properly designed and implemented it can

change the course of growth and pace of impact of organizations. Performance management

could be defined as it begins when the job is defined and ends when an employee leaves the

company. Between these points, the following should be understood for a working performance

management system.


7/19

Developing clear job descriptions: Job descriptions are the first step in selecting the right

person for the job, and setting that person up to succeed Job descriptions provide a framework so

the applicants and new employees understand the expectations for the position.

Selection: Jobs have different requirements. This is the process of matching the skills and

interests of a person to the requirements of a job. Finding a good job "fit" is exceptionally

important. Use of a selection process maximizes input from potential co-workers and the person

to whom the position will report.

Providing effective orientation, education, and training. Before a person can do the best job,

he or she must have the information necessary to perform. This includes job-related, position-

related, and company-related information; an excellent understanding of product and process use

and requirements; and complete knowledge about customer needs and requirements.

Providing on-going coaching and feedback. People need ongoing, consistent feedback that

addresses both their strengths and the weaker areas of their performance. Effective feedback

focuses more intensely on helping people build on their strengths. Feedback is a two-way

process that encourages the employee to seek help

Conducting quarterly performance development discussions. If supervisors are giving

employees frequent feedback and coaching, performance reviews can change from negative,

evaluative, one-sided presentations to positive, planning meetings.

Designing effective compensation and recognition systems that reward people for their

contributions: The power of an effective compensation system is frequently overlooked and

downplayed in some employee motivation-related literature

Providing promotional/career development opportunities for staff: The supervisor plays a

key role in helping staff develop their potential. Growth goals, changing and challenging job

assignments and responsibilities, and cross-training contribute to the development of a more

effective staff member.


8/19

Assisting with exit interviews to understand WHY valued employees leave the

organization: When a valued person leaves the company, it is necessary to understand why the

person is leaving. This feedback will help the company improve its work environment for

people. An improved work environment for people results in the retention of valued staff.

A performance management system will only be effective if it:

1.Is aligned with a companys corporate direction and business strategy

2.Objectively measures performance.

3.Is trusted to be fair by employees

4.Both managers and employees see that they have something to gain from using the

system.

Balanced scorecard - A strategy management tool

However, an over emphasis on achieving and maintaining short-term financial results can cause

companies to over invest in short-term fixes and to under invest in long-term value creation,

particularly in the intangible and intellectual assets that generate future growth. The pressure for

short-term financial performance often causes companies to reduce the resources spent on new

product development, process improvements, human resource development, Information

technology, databases and systems as well as customer and market development. In the short

run, the financial accounting model reports these spending cutbacks as increases in reported

income, even when the reductions have cannibalized a companys stock of assets and its

capabilities for creating future economic value. In short, these organizations use the financial and

non-financial performance only for tactical feedback and control of short-term operations.

What is a Balanced Scorecard?

The balanced scorecard is a management system (not only a measurement system that enables

organizations to clarify their vision and strategy and translate them into action. It provides


9/19

feedback around both the internal business processes and external outcomes in order to

continuously improve strategic performance and results. When fully deployed, the balanced

scorecard improves strategic planning from an academic exercise into the nerve center of an

enterprise.

First of all the balanced scorecard is a way of

Measuring organizational, business unit or department success;

Balancing long and short term actions;

Balancing different measures of success and

o Financial

o Customer

o Internal Operations

o Human Resource Systems & Development (Learning & growth)

A way of tying strategy to measures of action

Linking Strategy with Performance Measures

The essential thrust of the balanced score card is based on the fundamental proposition that

within organizations what gets measured gets done however, organizations dont always get what

they measure. If measurement, by itself, had that much impact on human behavior, then anyone

that had weighing scales would never get fat.

An appropriate measurement system is one that energizes employees in the context of what the

organization is trying to do. Thus, the logical starting point for the development of any

performance measurement system for an organization must be a clear statement of mission,

objectives and resultant strategy. An organizations mission is its basic function in society and is

the reason why the organization exists. Related to this are the objectives to be achieved and they

represent a precise statement of purpose for a specific period. Basically a strategy is a shared

understanding about how the organizations mission is to be achieved in a competitive


10/19

environment. Strategic thinking will focus on customers and competitors as well as internal

capabilities and resources. It will include reference to the firms competitiveness, quality of

output and levels of customer service. In turn, specified performance measures allow all

employees understand what the strategy is and how their performance is linked to that overall

strategy. The relationship between Mission, Objectives, Strategy and Performance Measures is

depicted in Fig.1.

There are at least three reasons why organizations should, and often do, measure their

performance:

1. To align mission, strategy, values and behavior

2. To improve the right things

3. To numerically define the meaning of succes

The performance management framework

Clear, consistent systems and procedures are needed to support the ongoing dialogue with

employees on performance management and provide feedback on how this is impacting on

organization service delivery. The emphasis should be on developing an approach tailored to

help the organization and its employees to perform well which is not too complex for the

benefits it delivers. Whatever the approach, everyone should know where to find information

about performance management and be able to access it whenever they need to.


11/19


12/19

From this, organization can identify the priority areas that need to be improved before

performance management can be implemented effectively.

Ten steps to effective performance management

There are ten basic steps that organization needs to take to develop and implement an effective

performance management system. The emphasis should be on developing a strategy tailored to

help the organization perform well which is not too complex for the benefits it delivers.

1. Develop business plans

Business planning must take account of what can realistically be delivered with the organization

resources available and consider the people management implications. Once organization plans

and priorities have been established these then need to be translated into service, team and

individual performance plans. This is a highly skilled task that is critical for the performance

management process to work well. It is important that managers are given appropriate support to

carry this out effectively.

2. Establish what aspects of performance need to be measured

Any national or local performance indicators being used must be clearly communicated to staff

and elected members, along with other measures being used to define performance. The focus

should be on measuring what matters and trying to keep these measures to a reasonable number.

3. Set up systems to monitor and evaluate

Systems need to be set up to ensure that performance can be monitored and evaluated throughout

the year to ensure that it is improving service delivery. It is therefore essential that the

performance management approach supports the organization's organisational development and

people management strategies, so that it helps rather than hinders progress.


13/19

4. Define the general performance expectations of employees

This may be done through a combination of approaches such as the use of competences, policies

and procedures. Line managers should be given specific responsibilities for managing

performance. Effective ways of doing this are making it an explicit part of their job role and

incorporating how to manage performance into management training programmes.

In return there should be clear and consistent expectations of what is expected of employees

while they are working for the organization.

5. Agree specific performance objectives

Organization plans and priorities need to be translated into service, team and individual

performance objectives.

Agreeing individual performance and employee development needs is normally carried out using

a combined performance appraisal and staff development process. This approach provides the

framework for helping managers to translate service and team plans into individual plans and

objectives and agree how these will be met. Individual plans and objectives are most effective

when both manager and employee agree them. Objectives should be specific, measurable,

agreed, realistic and time bound (SMART).

6. Develop an internal communications system

It is normally accepted that to be effective messages need to be communicated in a range of

different ways that really target the group of staff you are trying to reach. There is a wide range

of different approaches that can be adopted to ensure staff is kept in contact with key

performance issues. For example, there are staff briefings; meetings; lunch time seminars; use of

the intranet; mini articles or stories in staff magazines; posters; bulletin boards; email alerts; line

management and supervision meetings.


14/19

Conducting regular staff surveys and running a suggestion scheme are also important ways of

ensuring that employees have opportunities to feedback on a wide range of issues that will

impact directly or indirectly on organisational performance.

7. Ensure the performance appraisal system is in place, is well

understood and working effectively

A performance appraisal system is traditionally used to set objectives, identify support needs and

measure progress against objectives. For it to work effectively it needs to be clearly understood

by both managers and employees. This means ensuring that managers have access to guidance

and training to ensure that they manage performance effectively throughout the year and

employees at all levels within the organization have the necessary support, guidance or training

to enable them to actively engage in the performance appraisal process.

The performance appraisal system should also be regularly reviewed to ensure that it is

achieving what is required.

8. Support employees to help them perform well

Effective induction and probation processes for new employees are extremely important in

setting the right expectations for performance on both sides. If this early stage is managed well it

may be possible to intervene to prevent or minimise individual capability issues later on through

personal development or redeployment. Feedback from this process may also highlight problems

with job design or recruitment processes, which then need to be rectified.

Responsibility for meeting staff development needs may be addressed in the team or service or

may be fed back to a central HR function for action. Whatever the approach, the organization

needs an overview of its organisational capability and how it plans to address any gaps that will

hamper the achievement of its objectives. This strategic human resource management would

normally be the responsibility of the HR function.

Developing employee capacity to deliver organization objectives is likely to be achieved in a

variety of ways. All employees, even those who have been in the same post for some time,


15/19

should be encouraged to consider how they are performing and what else they could learn or do

differently to deliver better services. In some cases these needs will be adequately met through

attending training courses but there are many other possibilities, such as job shadowing,

mentoring, e-learning, working on projects or reading manuals. Wherever possible the employee

should be given the opportunity to agree the most suitable option.

Performance needs to be actively managed and monitored throughout the year. An essential part

of this dialogue is the giving and receiving of feedback. For this to work effectively the

organisational climate must encourage the sharing of both success and failure. Without this

employees will be reluctant to comply and the quality of the feedback may be lacking. As well

as managers, employees at all levels in the organization may also need support, guidance or

training to enable them to actively engage in the performance appraisal process.

9. Seek performance improvement

Of course, there will be circumstances where performance does not meet the required standard.

At organisational level, this will mean identifying what the barriers are to effective performance

and putting in place a plan to deliver improvement. At both team and individual level the

principles will be the same, but it may be more difficult to manage, as individual sensitivities

and complexities may be at the fore.

Having in place a clear process for dealing with inadequate performance is important. However,

it is essential that the process does not take over from the desired outcome, which is to seek

performance improvement. Identifying the reason for inadequate performance is the first step.

From this the organization can determine further action, which may involve disciplinary

procedures; additional training or support; monitoring and review mechanisms; redeployment;

changing job roles or in some cases dismissal. It is also important that learning from these

actions is taken on board, for example to improve future performance management mechanisms

or selection methods.

Formal capability or disciplinary proceedings take time, effort and resources, which could

otherwise be targeted at more positive interventions, such as recognising good performance. If

performance management is embedded into day-to-day management practice it is likely that


16/19

inadequate performance will be managed and improved before it gets to this stage; that is why

following the performance management cycle on an ongoing basis is so important.

Organization should also review job design and work flexibility as ways of improving

performance.

10. Recognise and reward good performance

This is the part that many organisations forget; instead they take good performance for granted

and focus on those who have not met the standard. However, to retain motivation and

continuously improve, it is essential that good performance is recognised and where appropriate,

rewarded. Recognition and reward will mean different things to different people; for some

financial reward in the form of pay rises or bonuses may be important, whereas for others

recognition that their contribution has made a difference will be enough.

When determining what will be the most appropriate reward the organization will need to

understand what motivates their workforce and how they can meet this need. Pay systems and

processes will be important, but it will also be necessary to identify other reward mechanisms

such as opportunities for development and career progression.

Recognising performance is also about sharing success stories across the organisation and

highlighting how good performance helps the organisation as a whole. This may also help with

sharing good practice and learning about what works.

Action checklists

Performance management strategies only work if each group within an organisation knows

exactly what they are meant to be doing:

Members should:

Recognise the impact performance management has on service delivery improvement

Endorse the overall performance management strategy


17/19

Ensure that resources are targeted appropriately

Be exemplars of performance management practice in the way they manage the

performance of senior managers

Identify and reflect on their own development needs

Regularly monitor and review how the strategy is progressing and how it is improving

services

Senior managers should:


Ensure that corporate visions, objectives and plans are communicated down to service,

team and individual performance level

Take a lead role in the development and implementation of the organization's

performance management strategy

Ensure that resources are targeted appropriately

Be exemplars of good performance management practice

Set targets and monitor managers' performance against the strategy's objectives

Line managers should:


Ensure that organisational objectives are understood by team members

Select the best people to perform particular jobs and tasks

Regularly monitor and feed back to employees on their performance

Seek advice and support in order to improve performance management practice

Monitor how well their team is doing against the strategy

The HR team should:

Support the development of the performance management strategy and ensure that it

reflects the wider people management context

Ensure that all HR activities support the strategy

Continuously develop their skills and capacity to help people manage performance


18/19

Be exemplars of good performance management practice

Make sure that the HR function is able to support and deliver against the strategy's

targets

Employees and their representatives should:

Be involved in the development and implementation of the strategy

Ensure that they understand where their individual objectives fit with organisational,

service and team objectives

Identify and reflect on their own development needs

Ensure that their job meets service delivery needs and feedback any issues

Regularly communicate with their manager.

Empowering middle managers

Focusing everyone in the organization in the same overall framework

Conclusion

It is now generally accepted that performance measures should be an integral part of modern

internal reporting system. The performance measures (or indicators) should: Be linked with corporate strategy;

Mirror both internal & external concerns;

Include financial and non-financial dimensions; and Be both leading and lagging indicators of performance.

It has recently been reported that companies who use suitable performance measurement systemswere much more likely to achieve leadership positions in their industry and were almost twice as

likely to have successfully implemented a major organizational change. Management

accountants who grasp the very simple idea of the BSC will considerably increase the capacityof their organizations to survive and prosper. The important issue for management accountants is

to reflect on what Albert Einstein once remarked: Not everything that counts can be counted, and

not everything that can be counted, counts.


19/19

BIBILIOGRAPHY

Web adds.

www.valuebasedmanagement.net.

www.12manage.balancedscorecard.htm

www.wikipedia.com

www.answers.com

www.netmba.com

www.yahooanswers.com

www.slideshares.com

www.docstoc.com

Books

Strategic management

By: Azahar Kazmi

Management control system

By: Robert n anthony
http://www.valuebasedmanagement.net/http://www.valuebasedmanagement.net/http://www.12manage.balancedscorecard.htm/http://www.wikipedia.com/http://www.answers.com/http://www.netmba.com/http://www.yahooanswers.com/http://www.slideshares.com/http://www.docstoc.com/http://www.valuebasedmanagement.net/http://www.12manage.balancedscorecard.htm/http://www.wikipedia.com/http://www.answers.com/http://www.netmba.com/http://www.yahooanswers.com/http://www.slideshares.com/http://www.docstoc.com/

Mohinder Singh Mcs Term Paper

Documents

Transcript of Mohinder Singh Mcs Term Paper