Strategic Performance

Management

Dr. Elijah Ezendu

FIMC, FCCM, FIIAN, FBDI, FAAFM, FSSM, MIMIS, MIAP, MITD, ACIArb, ACIPM,
PhD, DocM, MBA, CWM, CBDA, CMA, MPM, PME, CSOL, CCIP, CMC, CMgr

Performance management is a
proactive partnership between
employees and management that
helps employees perform at their best
and align their contributions with the
goals, values, and initiatives of the
organization
- American Management Association

Performance Management is a strategic

and integrated approach to delivering
sustained success to organizations by
improving the performance of the
people who work in them and by
developing the capabilities of teams
and individual contributors.
- Armstrong & Baron

Strategic Performance Management

encompasses methodologies, frameworks and
indicators that help organizations in the
formulation of their strategy and enable
employees to gain strategic insights which
allow them to challenge strategic assumptions,
refine strategic thinking and inform strategic
decision making and learning.
- Bernard Marr

The Evolution of Performance Management

Tools for Strategic Performance Management

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Management by Objectives (Peter Drucker)

Hoshin Kanri (Yoji Akao)
Balanced Scorecard (Robert Kaplan and David Norton)
Marr Balanced Scorecard (Bernard Marr)
Value Based Management
Results Based Leadership
Result Orientated Management
Performance Prism

What is Performance Prism?

Its a framework for performance management and
measurement which was developed to surmount
the weaknesses of balanced scorecards.
It was developed in Cranfield University, United
Kingdom. This innovation was led by Prof. Andy
Neely, Professor of Operations Strategy and
Performance Director of Cranfields Center for
Business Performance and Chairman of
Performance Management Association.

The Dilemma of Balanced Scorecards

The balanced Scorecards which was developed by
Kaplan and Norton focused on four perspectives
namely financials, customers, internal processes
in addition to learning and growth. It attempts to
use strategy as an end instead of a route. It
focuses too much on shareholders and
customers without proportionate consideration
for other stakeholders such as employees,
suppliers and regulatory agencies.

The Standpoint of Performance Prism

Performance Prism upholds that strategy
should not be an end. Strategy is a route
for delivering value to stakeholders.
Therefore, measures should not be
derived from strategy. Measures must be
derived from stakeholders.

The Performance Prism Framework

Top = Stakeholder Satisfaction

Side1 = Strategies
Side2 = Processes
Side3 = Capabilities
Bottom = Stakeholder Contribution

Source: Adapted from Andy Neely and Chris Adams, The Performance Prism

Ascertainment of Stakeholders
Shareholders
Employees
Final Consumers
Distributors
Suppliers
Community
State
Ecosystem

Modeling Strategies
In accordance with principles of performance
prism, strategies of a firm should be
crafted based on mission direction
towards satisfaction of distinct stakeholder
values.

Modeling Processes
The appropriate processes should be
hallmark of smoothness and well thoughtout mechanism for execution of a firms
strategies.
Strategy execution would definitely turn out
failure if it tries to scale flawed processes.

Modeling Capabilities
A firm should view its capabilities requirement
as technology, practices, infrastructure
and competencies necessary for carrying
out operations vis--vis the established
processes in order to generate values for
stakeholders.

Stakeholder Contribution
Organizations should ascertain the
contribution of each stakeholder group to
its success, so as to identify good
contributors, poor contributors and noncontributors. This is necessary for effective
positioning of the firms performance
model.

Drivers for Using Performance Management

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Advancement in Management
Technology
Market
Competition
Human Resource Strategy
Government
Industrial Relations
Organizational Restructuring
Change Management

Using Performance Management System

Performance Standards
Performance Measurement
Quality Improvement Process
Performance Reporting

The Management Challenge

9 of 10 companies fail to execute strategy
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Vision Barrier: Only 5% of workforce understands strategy

People Barrier: Only 25% of managers have incentives
linked to strategy
iii. Management Barrier: 85% of executive teams spend less
than 1 hour per month discussing strategy
iv. Resource Barrier: 60% of organizations dont link budgets
to strategy
Source: Balance Scorecard Collaborative

Performance Management Maturity Model

Progress

Performance Culture
All employees empowerment is facilitated
Widespread management by fact and process
Plans reflect organizational capability
Capability improvement aligned with strategy
Continuous improvement achieved

Performance Management
Ownership is devolved
Objective interdependencies mapped and better understood
Decisions based on facts
Management actions changed through use of information

Effective Performance Reporting

Cohesive set of strategies
Alignment cascade throughout organisation
Clear accountability is established

Systematic Performance Management

Single coherent database established
Key Performance data collected efficiently
Efficient reporting of performance

Disparate Uncoordinated Approach

Individual efforts
Duplicated effort, difficult to consolidate
Time consuming, irreconcilable, possibly mistrusted
Time

Source: Inphase Software

The Role of Technology in Performance Management

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Increase data quality

Trigger employee behaviour
Enhance processes
Boost Performance
Increase Accessibility of Data
Reinforce Compliance
Improve performance planning
Aids in development of KPI

Core Issues in Performance Management

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Goal Setting
Goal Alignment
Employee Competencies
Measuring Performance
Performance Review
Development Management

Why Should Your Organisation Implement

Performance Management?
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Communicate vision, mission, values, objectives

Provide impetus for effective organizational development
Align organizational resources for growth
Enhance working relationships
Improve management
Communicate strengths and key areas for improvement
Provide Support to workers
Monitor organizational activities
Provide feedback

What Employees Want From PM

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Rational expectations
Involvement in setting goals
Clear evaluation criteria
Proper job descriptions
Constructive and positive feedback
Fair treatment
Job and career enrichment

Elements & Outcomes of

Performance Management
Elements:
Listening
Coaching
Feedback
Outcomes:
Better Performance
Improved Morale, Belief & Loyalty

Principles of Performance Management System

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Clarity of Purpose
Focus
Alignment
Balance
Regular Refinement
Robust Performance Indicators

Conducting Performance Improvement

Business Analysis for Performance Improvement

Identification of stated goals and objectives.
Ascertainment of the business environment.
Evaluation of stated goals and objectives in the
business environment.
Detection of fitting goals and objectives.

Performance Analysis
Performance analysis focuses on
measuring the gap between desired
and actual performance.
Clarified business objectives determine
requirements for desired performance.
Highlights of requirements include
organizational structure, competencies,
resources, processes, work systems
and competitiveness.

The Place of Learning and Development

Intervention
Learning and Development intervention can
only be applicable to gap in competencies
and behavioural traits.
The other requirements for desired
performance call for matching
intervention.

Translating Strategy From Organisation to Employee

Translate

Translate

Performance Indicator
Its a tool enabling the effectiveness of an operation
or organisation to be measured, and allows an
achieved result to be gauged or evaluated in
relation to a set of objectives.
Source: OECD

Properties of Performance Indicators

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Relevant to the purpose, policy and practice

Clearly defined
Reliable
Worth measuring
Measurable
Galvanize action
Reflect results of action
Precisely defined as possible
Readily available within a reasonable time frame

Advantages of Performance Indicators

i.

Means of measuring organizational

progress toward set objectives.

ii. Give room for benchmarking and comparing

various units, sections, departments and
subsidiaries.

Disadvantages of Performance Indicators

i.

Act as bad measures if not well defined

ii. Some vital indicators cant be easily measured

iii. Issuance of complexity due to number of
indicators

Key Performance Indicators in a Firm

These are quantifiable factors that are clearly
connected to drivers of business success in a
particular firm.

Criteria for Selecting KPI

i.

Strong linkage to objectives

ii. They should be connected to areas of the

business that can be controlled
iii. They should be quantifiable

Types of KPI
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Directional Indicators
Quantitative Indicators
Actionable Indicators
Practical Indicators

Developing Targets based on KPI

A Key Performance Indicator should drive
managerial effort towards a mark of
achievement, which is a target in accordance
with set objective.
KPI.Reduce waste
Target50% by end of March

Dr. Elijah Ezendu is Award-Winning Business Expert & Certified Management Consultant
with expertise in HR, OD, Competitive Intelligence, Strategy, Restructuring, Business
Development, Sales & Marketing, Interim Management, CSR, Leadership, Project &
Programme Management, Cost Management, Outsourcing, Franchising, Intellectual
Capital, eBusiness, Social Media, Software Architecture, Cloud Computing, eLearning &
International Business. He holds proprietary rights of various systems. He is currently CEO,
Rubiini (UAE); Hon. President, Worldwide Independent Inventors Association; Special
Advisor, RTEAN; Director, MMNA Investments Limited. He had functioned as Chair,
International Board of GCC Business Council (UAE); Senior Partner, Shevach Consulting;
Chairman (Certification & Training), Coordinator (Board of Fellows), Lead Assessor &
Governing Council Member, Institute of Management Consultants, Nigeria; Lead Resource,
Centre for Competitive Intelligence Development; Turnaround Project Director,
Consolidated Business Holdings Limited; Lead Consultant/ Partner, JK Michaels; Technical
Director, Gestalt; Chief Operating Officer, Rohan Group; Executive Director (Various Roles),
Fortuna, Gambia & Malta; Director, The Greens; Chief Advisor/Partner, D & E; Vice
Chairman, Refined Shipping; Director of Programmes & Governing Council Member,
Institute of Business Development, Nigeria; Member of TDD Committee, International
Association of Software Architects, USA; Member of Strategic Planning and Implementation
Committee, Chartered Institute of Personnel Management of Nigeria; Adjunct Faculty,
Regent Business School, South Africa; Adjunct Faculty, Ladoke Akintola University of
Technology, Nigeria; Editor-in-Chief & Chairman of Editorial Board, Cost Management
Journal; National Executive Council Member, Institute of Internal Auditors of Nigeria;
Member, Board of Directors (Several Organizations). He holds Doctoral Degree in
Management, Master of Business Administration and Fellowship of Several Professional
Institutes in North America, UK & Nigeria. He is an author & widely featured speaker in
workshops, conferences & retreats. He was involved in developing Specialist Masters
Degree Course Content for Ladoke Akintola University of Technology (Nigeria) and Jones
International University (USA). He holds Interim Management Assignments on Boards of
Companies as Non-Executive Director.

Thank You