PERFORMANCE MANAGEMENT

AND

STRATEGIC PLANNING

Herman Aguinis, University of Colorado at Denver

Strategic Planning: Definition

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

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
Goal of Strategic Planning:

Allocateresourcesto provide
organization
Withcompetitive
advantage
Prentice Hall, Inc. © 2006
Herman Aguinis, University of Colorado at Denver
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 of
allocation resources
 Produce an organizational culture of
cooperation
 Allow for the consideration of new options and
opportunities
 Provide employees with information to direct
daily activities

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
 There was a good strategic
planning in most of the organization,
but there is no clear relationship
between Organizational Level and
individual level goals.
There is a need to link the
strategic Planning with
individual goals

Herman Aguinis, University of Colorado at Denver

Alignment of Strategic Plan with
Performance
Critical to involve all
levels of management

Critical to involve all

unit head &
department head

Herman Aguinis, University of Colorado at Denver

Resent study including 338
organization in 42
countries found
management is the 3rd most
performance
important factor affecting
success of a strategic plan.

Herman Aguinis, University of Colorado at Denver

Linking among organization,
Unit strategic Plan , Job
Description and individual
and Team
BANK OF UTAH
Washington, United States

Herman Aguinis, University of Colorado at Denver

 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.

Herman Aguinis, University of Colorado at Denver

 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.

Herman Aguinis, University of Colorado at Denver

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.

Herman Aguinis, University of Colorado at Denver

 Individual
Performance:
Information on various
responsibilities, standards
expected, goals to be reached, and
actions to be taken to improve
performance in the future..

Herman Aguinis, University of Colorado at Denver

Steps require for successful Strategic
Planning

Herman Aguinis, University of Colorado at Denver

Environmental Analysis SWOT 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 Denver
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 Denver
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 Denver
Gap Analysis

Analyzes:
External environment
(opportunities and threats)
vis-à-vis
Internal
environment
(strengths and weaknesses)

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
Gap analysis determines:
 Opportunity + Strength = Leverage

 Opportunity + Weakness = Constraint

 Threat + Strength = Vulnerability

 Threat + Weakness = Problem

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
Strategic Planning for the Organization

Environmental and Gap Analyses

provide information for organizations
to decide:

Who they are

What they do

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
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?

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
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
Employees
Prentice
Stockholders
Hall, Inc. © 2006
Herman Aguinis, University of Colorado at Denver
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 Denver
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
Leadership Herman Aguinis, University of Colorado at Denver
How the HR Function contributes:

• Communicate knowledge of strategic

plan
• Provide knowledge of KSAs needed
for strategy implementation
• Propose reward systems

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
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

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
Job Descriptions

• Tasks and KSAs are congruent

with Organization and Unit
strategic plans

• Activities described support

mission and vision of
Organization and Unit

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
 Individual and Team Performance

Organization and Unit mission, vision, goals lead

to
 Performance management system, which
 Motivates employees
 Aligns development plans with
organization priorities

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver
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)
Prentice Hall, Inc. © 2006
Herman Aguinis, University of Colorado at Denver
Building Support –
Answering “What’s In It for
Me?”
• Top Management:
• Help carry out vision
• All levels:
• Involvement
• Participation
• Understanding

Prentice Hall, Inc. © 2006

Herman Aguinis, University of Colorado at Denver