What are the two fundamental aspects of performance management and what do they mean?
Planning - the organisation sets its objectives and decides how best to achieve them.
Control - the organisation monitors achievement of objectives and suggests any necessary corrective action.
What is a mission statement?
A mission statement outlines the broad direction of an organisation, its reasons for existing and its values.
What are the differences between strategic planning and control and operational planning and control?
Strategic planning and control - undertaken by senior managers, long-term considering the whole organisation and all stakeholders, information has an external focus and is commonly qualitative and the focus is on planning not control.
Operational planning and control - undertaken by operational managers, ensures objectives set at tactical level are achieved, information is detailed, task-specific, mainly internal and largely quantitative and the focus is on control not planning.
Is there a conflict between strategic planning and operational planning?
Often yes. Strategic planning is a long-term, top-down process and decisions may conflict with short-term localised operational decisions.
What are CSFS?
Critical success factors are the vital areas where things must go right for the organisation in order for them to achieve their strategic objectives.
What are KPIs?
Key performance indicators are the measures which indicate whether or not the CSFs are being achieved. Targets will be set for each KPI.
What is the role of performance measures in performance management?
It is not enough merely to make plans and implement them. The results of the plans must be measured. ‘What gets measured, gets done’. Once measured, the results should be compared to the stated objectives. Action can then be taken to remedy any shortfalls in performance.
What is benchmarking?
Benchmarking aims to understand and evaluate the current position of the organisation in relation to best practice (products, services or processes) and to identify areas and means of performance improvement.
What are the 7 steps for implementing benchmarking?
- Determine areas to be benchmarked and set objectives.
- Identify KPIs.
- Select partners to benchmark against.
- Measure performance of partners using chosen KPIs.
- Measure own performance and identify gap.
- Decide on actions to close the gap.
- Implement and monitor actions.
What are the advantages and disadvantages of a benchmarking evaluation?
Advantages - helps to assess current strategic position, identifies gaps in performance and sets challenging but achievable targets, a method of learning from the success of others and applying best practice, minimises complacency and provides an early warning sign of competitive disadvantage and encourages continuous improvement.
Disadvantages - identifying best practice is difficult, not forward looking, differences between areas benchmarked, potential for lack of staff/management commitment, too much focus on areas benchmarked to the detriment of overall performance and time and cost.
What is internal benchmarking?
Internal benchmarking is where another function or division of the organisation is used as the benchmark.
What is competitor benchmarking?
Competitor benchmarking uses a direct competitor in the same industry with the same or similar processes as the benchmark.
What is process/activity benchmarking?
Process/activity benchmarking focuses on a similar process/activity in another organisation, which is not a direct competitor.
What are the advantages of internal benchmarking?
Share best practice, obtain detailed operational data and integrates different parts of organisation.
What are the disadvantages of internal benchmarking?
May not be innovative, no external focus and often involves non-financial data and this may be less robust.
What are the advantages of competitor benchmarking?
Identify where other organisations have a competitive advantage and can identify areas for improvement with a similar business.
What are the disadvantages of competitor benchmarking?
Competitor may be reluctant to share information or may want something in return and may not identify how to gain competitive advantage.
What are the advantages of process/activity benchmarking?
Easier to obtain information from non-competitor, solutions can still be innovative and easier to translate lessons if done for generic activities.
What are the disadvantages of process/activity benchmarking?
May be difficult to translate lessons learned and connecting organisations in different industries is more difficult and different information systems may limit sharing.
