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Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Performance Management and Strategic Performance Management and Strategic Planning: OverviewPlanning: Overview
Definition and Purposes of Strategic PlanningLinking Performance Management to the
Strategic Plan– Strategic Planning – Developing Strategic Plans at the Unit Level– Job Descriptions– Individual and Team Performance
Building Support
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning: Definition Strategic Planning: Definition
• Process– Describe organization’s destination– Assess barriers– Select approaches for moving forward
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning: GoalStrategic Planning: Goal
• Allocate resources – to provide organization – with competitive advantage
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning: PurposesStrategic 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
(continued on next slide)
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning: PurposesStrategic Planning: Purposes
Produce an organizational culture of cooperation
Allow for the consideration of new options and opportunities
Provide employees with information to direct daily activities
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning : OverviewStrategic Planning : Overview
1. Environmental Analysis2. Mission3. Vision4. Goals5. Strategies
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Environmental AnalysisEnvironmental Analysis
Identifies external and internal trends• To understand broad industry issues• To make decisions using “big picture” context
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
External trendsExternal trends
• Opportunities: – environmental characteristics that can help
the organization succeed
• Threats: – environmental characteristics that can
prevent the organization from being successful
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
External trends – External trends – Factors to ConsiderFactors to Consider
• Economic• Political/legal • Social
• Technological• Competitors• Customers• Suppliers
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Internal trendsInternal trends
• Strengths: – internal characteristics that the organization
can use for its advantage• Weaknesses:
– internal characteristics that can hinder the success of the organization
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Internal trends – Internal trends – Factors to ConsiderFactors to Consider
• Organizational structure• Organizational culture• Politics• Processes• Size
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Gap AnalysisGap Analysis
Analyzes:External environment (opportunities and threats)
vis-à-vis
Internal environment(strengths and weaknesses)
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Gap analysis determines:Gap analysis determines:
Opportunity + Strength = Leverage
Opportunity + Weakness = Constraint
Threat + Strength = Vulnerability
Threat + Weakness = Problem
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Planning for the OrganizationStrategic Planning for the Organization
Environmental and Gap Analyses provide information for organizations to decide:Who they areWhat they do
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
MissionMission
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?
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Mission Statement contains: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
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Mission Statement Mission Statement maymay contain: contain:
B. Information on organization’s values and beliefs Managerial philosophy Public image sought by organization Self-concept of business adopted by
Employees Stockholders
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
VisionVision
• Statement of future aspirations• Focuses attention on what is important• Provides context for evaluating
– Opportunities– Threats
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
A Good Vision Statement is:A Good Vision Statement is:
BriefVerifiableBound by a TimelineCurrent
FocusedUnderstandableInspiringA stretch
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Purposes for Setting GoalsPurposes for Setting Goals
• Formalize expected achievements• Provide motivation• Provide tangible targets • Provide basis for good decisions• Provide basis for performance measurement
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
StrategiesStrategies
• Create strategies or Game Plans or “How to” procedures to address issues of:– Growth– Survival– Turnaround– Stability– Innovation– Leadership
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
How the HR Function contributes:How the HR Function contributes:
• Communicate knowledge of strategic plan• Provide knowledge of KSAs needed for
strategy implementation• Propose reward systems
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Plans at the Unit LevelStrategic 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
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Alignment of Strategic Plan with Alignment of Strategic Plan with PerformancePerformance
Organization’s Strategic PlanMission, Vision, Goals, Strategies
Unit’s Strategic PlanMission, Vision, Goals,
StrategiesJob Description
Tasks, KSAs
Individual and Team PerformanceResults, Behaviors, Developmental Plan
Critical to involve all levels of management
Critical to involve all employees
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Job DescriptionsJob Descriptions
• Tasks and KSAs are congruent with Organization and Unit strategic plans
• Activities described support mission and vision of Organization and Unit
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Individual and Team PerformanceIndividual and Team Performance
Organization and Unit mission, vision, goals lead toPerformance management system, which
Motivates employees Aligns development plans with organization priorities
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Strategic Plan Strategic Plan Choices in PM System DesignChoices 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)
Herman Aguinis, University of Colorado at DenverPrentice Hall, Inc. © 2006
Building Support – Building Support – Answering “What’s In It for Me?”Answering “What’s In It for Me?”
• Top Management: – Help carry out vision
• All levels: – Involvement – Participation – Understanding