PERFORMANCE MANAGEMENT

AND STRATEGIC PLANNING

Strategic Planning: Definition

• Process
• Describe organization’s
destination
• Assess barriers
• Select approaches for moving
forward

Prentice Hall, Inc. © 2006

Goal of Strategic Planning:

Allocate resources
to provide
organization with
competitive
advantage
Strategic Planning: Purposes
 Help define the organization’s identity
 Help organization prepare for the future
 Enhance ability to adapt to environmental
change
 Provide focus and allow for better allocation of
resources
 Produce an organizational culture of
cooperation
 Allow for the consideration of new options and
opportunities
 Provide employees with information to direct
daily activities
Alignment of Strategic Plan with
Performance
Critical to involve all
levels of management

Critical to involve all

unit head &
department head
 Mission statement:
The mission of the corporation is to operate as a
High performing financial institution providing a
wide range of profitable Competitive and superior
financial services in our market

Goals:
To attract and retain an outstanding staff who are
highly motivated and productive and who vigorously
pursue revenue – generating and Costs-reduction
strategies

Strategy:
Critically reviews out existing branches and
departments to Ensure that all branches are
consistent in their goals, strategies, And profit
objectives.
 Mission
(Department Level):

Increase the Knowledge,

management skills and Decision-
making abilities of our branches
Managers so that we will minimize
losses and other operating
expenses. While maximizing the
profitability of our branching
systems.
Position Description
for HR Manager
Administers A comprehensive
human resources program in the
division to ensure the expertise,
effectiveness, motivation, and
depth
( including providing appropriate
management succession) to the
division’s staff members.
 Individual
Performance:
Information on various
responsibilities, standards
expected, goals to be reached, and
actions to be taken to improve
performance in the future..
Steps require for successful Strategic
Planning

Herman Aguinis, University of Colorado at

Environmental Analysis SWOT
SWOT Analysis
Analysis

Identifies external and internal

trends

• To understand broad industry

issues
• To make decisions using “big picture”
context

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at
External trends
• Opportunities:
• environmental characteristics that can help the
organization succeed

• Threats:
• environmental characteristics that can prevent the
organization from being successful

Factors to Consider
• Economic • Technological
• Political/legal • Competitors
• Social • Customers
• Suppliers

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at
Internal trends
• Strengths:
• internal characteristics that the
organization can use for its advantage
• Weaknesses:
• internal characteristics that can
hinder the success of the organization

Factors to Consider
• Organizational structure
• Organizational culture
• Politics
• Processes
• Size
Prentice Hall, Inc. © 2006
Herman Aguinis, University of Colorado at
Gap Analysis

Analyzes:
External environment
(opportunities and threats)
vis-à-vis
Internal environment
(strengths and weaknesses)
Gap analysis determines:
Opportunity + Strength = Leverage

Opportunity + Weakness = Constraint

Threat + Strength = Vulnerability

Threat + Weakness = Problem

Strategic Planning for the Organization

Environmental and Gap Analyses

provide information for organizations
to decide:

Who they are

What they do
Mission
A good mission statement answers:
Why does the organization exist?
What is the scope of the organization’s
activities?
Who are the customers served?
What are the products or services
offered?
Mission Statement contains:
A. Information on organization’s
 Basic product/service to be offered
 Primary market/customer groups
 Unique benefits and advantages of
product/services
 Technology to be used
 Concern for survival through growth and
profitability
B. Information on organization’s values
and beliefs
Managerial philosophy
Public image sought by organization
Self-concept of business adopted by
Prentice Employees
Hall, Inc. © 2006
Herman Aguinis, University of Colorado at
Vision
• Statement of future aspirations
• Focuses attention on what is important
• Provides context for evaluating
• Opportunities
• Threats

A Good Vision Statement is:

 Brief  Focused
 Verifiable  Understandable
 Bound by a Timeline  Inspiring
 Current  A stretch
Prentice Hall, Inc. © 2006
Herman Aguinis, University of Colorado at
Purposes for Setting Goals
• Formalize expected achievements
• Provide motivation
• Provide tangible targets
• Provide basis for good decisions
• Provide basis for performance
measurement

•
Strategies
Create strategies or Game Plans or “How to”
procedures to address issues of:
• Growth
• Survival
• Turnaround
• Stability
Innovation
•Prentice Hall, Inc. © 2006
Herman Aguinis, University of Colorado at
How the HR Function contributes:

• Communicate knowledge of strategic

plan
• Provide knowledge of KSAs needed for
strategy implementation
• Propose reward systems
Strategic Plans at the Unit Level

• Organization Mission statement, Vision

statement, Goals, and Strategies

Must clearly align with………

And be congruent with……

• Every Unit Mission statement, Vision

statement, Goals, and Strategies
Job Descriptions

• Tasks and KSAs are congruent

with Organization and Unit
strategic plans

• Activities described support

mission and vision of
Organization and Unit
 Individual and Team Performance

Organization and Unit mission, vision, goals lead

to
Performance management system, which

Motivates employees

Aligns development plans with organization

priorities
Strategic Plan  Choices in PM System
Design
• Criteria (Behavior vs. Results)
• Participation (Low vs. High)
• Temporal Dimension (Short Term vs. Long
Term)
• Level of Criteria (Individual vs.
Team/Group)
• System Orientation (Developmental vs.
Administrative)
• Rewards (Pay for Performance vs.
Tenure/Position)
Building Support –
Answering “What’s In It for
Me?”
• Top Management:
• Help carry out vision
• All levels:
• Involvement
• Participation
• Understanding