3-1

Chapter 3
Performance Management
and Strategic Planning

Nader Al-Qaryuti
 2

3.1 Define strategic planning and its

overall goal.

3.2 Describe the various specific purposes

of a strategic plan.

3.3 Explain why the usefulness of a

performance management system relies to a
large degree on its relationship with the
organization’s and unit’s strategic plans.

C h apter (3)Performance Management and Strategic Planning

 3
3.4 Understand how to create an organization’s
strategic plan including an environmental analysis
resulting in a mission statement, vision statement,
goals, and strategies.

3.5 Conduct an environmental analysis that

includes a consideration of both internal (strengths
and weaknesses) and external (opportunities and
threats) trends.

3.6 Understand how a gap analysis resulting from a

consideration of internal and external trends dictates
an organization’s mission.
Nader Al-Qaryuti
 4
3.7 Define the concept of a mission statement and
describe the necessary components of a good mission
statement.

3.8 Define the concept of a vision statement, and

understand its relationship to the mission statement.

3.9 Describe the basic components of a good vision

statement.

3.10 Create organization- and unit-level mission and

vision statements

Nader Al-Qaryuti
5

3.11 Understand the relationship between

mission and vision statements, goals, and
strategies.

3.12 Understand the relationship among an

organization’s vision, mission, goals, and
strategies and the vision, mission, goals,
and strategies of each of the divisions or
units in the organization.

Nader Al-Qaryuti
6

3.13 Understand the relationship among a

unit’s vision, mission, goals, and strategies
and individual job descriptions.

3.14 Explain why job descriptions must be

linked to the organization’s and unit’s
strategic plans.

Nader Al-Qaryuti
7

3.15 Understand how a strategic plan

determines various choices regarding
performance management system design.

3.16 Explain why a consideration of

strategic issues is a building block for
creating support for a performance
management system

Nader Al-Qaryuti
 3-8 Overview
Overview
Definition and Purposes of Strategic Planning
Process of Linking Performance Management
to the Strategic Plan
Strategic Planning
Developing Strategic Plans at the Unit Level
Job Descriptions
Individual and Team Performance
Building Support
Nader Al-Qaryuti
 Strategic Planning: Definition
3-9

◼Process
Describe the organization’s destination
 Assess barriers
Select approaches for moving forward
Strategic Planning: Goal
o Allocate resources
To provide organization for competitive
advantageStrategic planning is a process that involves
describing the organization's destination, assessing
barriers that stand in the way of that destination, and
Nader Al-Qaryuti

selecting approaches for moving forward.

10

 Goal of Strategic Planning:

 Strategic Planning: Goal
 The main goal of the strategic planning proce s is to:
Allocate resources to provide the organizion with a
competitive advantage.

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

 Strategic Planning: Purposes
3-11
✓ Help define the organization’s identity.
✓ Help the organization prepare for the future.
✓ Enhance the 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.
Nader Al-Qaryuti
12

 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

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

13 Alignment of Strategic Plan
with Performance
 Organization's Strategic Plan ) Mission, Vision, Goals, Critical to
Strategies ( involve all
levels of
management

 Unit's Strategic Plan ) Mission, Vision, Goals, Strategies(

Critical to involve
all unit head &
department head

 Job Description )Tasks, KSAS(

 Individual and Team Performance )Results, Behaviors,

Developmental Plan(
14

 Linking among organization Unit strategic Plan , Job

Description and individual and Team
 BANK OF UTAH Washington, United States

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

15

 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 strategie
 Strategy: Critical reviews out existing branches
departments to Ensure that all branches are consistent
in their goals, strategies, And profit objectives.

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

16

 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...
17 Process of Linking Performance Management
to the Strategic Plan

Strategic Planning for the Organization

Developing Strategic Plans at the Unit Level
Job Descriptions
Individual and Team Performance

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

 Strategic Planning : Overview
3-18

1. Environmental Analysis
2. Mission
3. Vision
4. Goals
5. Strategies

Nader Al-Qaryuti
 1-Environmental Analysis
3-19

Identifies external and internal trends

◼To understand broad industry issues
◼To make decisions using “big picture”
context.

Nader Al-Qaryuti
 External Trends
3-20

◼Opportunities:
Environmental characteristics that
can help the organization succeed.

◼Threats:
Environmental characteristics that
can prevent the organization from
being successful.

Nader Al-Qaryuti
 External Trends—Factors to Consider
3-21

◼ Economic ◼ Competitors
◼ Political/Legal ◼ Customers
◼ Social ◼ Suppliers
◼ Technological

Nader Al-Qaryuti
 Internal Trends
3-22

◼Strengths:
Internal characteristics that the
organization can use for its advantage
◼Weaknesses:
Internal characteristics that can
hinder the success of the organization

Nader Al-Qaryuti
3-23 Internal Trends— Factors to Consider

◼ Organizational structure
◼ Organizational culture
◼ Politics
◼ Processes
◼ Size

Nader Al-Qaryuti
 Gap Analysis
3-24

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

Nader Al-Qaryuti
 Gap Analysis Determines:
3-25

➢Opportunity + Strength = Leverage

➢Opportunity + Weakness = Constraint

➢Threat + Strength = Vulnerability

➢Threat + Weakness = Problem

Nader Al-Qaryuti
3-26 Strategic Planning for the
Organization
Environmental and Gap Analyses provide
information for organizations to decide:
➢Who they are
➢What they do

Nader Al-Qaryuti
 2-Mission
3-27

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?

Nader Al-Qaryuti
 Mission Statement contains:
3-28

Information on an 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.

Nader Al-Qaryuti
 B. Information on
29
organization's values and
beliefs
 * Managerial philosophy
 * Public image sought by organization
 + Self-concept of business adopted b
 * Employees * Stockholders

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

3-30
The mission statement may contain
information on the organization’s:
• Values and beliefs
• Managerial philosophy
• Desired public image
• Self-concept of business adopted by
o Employees
o Stockholders

Nader Al-Qaryuti
3-31 3-Vision
◼ Statement of future aspirations
◼ Focuses attention on what is important
◼ Provides context for evaluating
Opportunities
Threats
A Good Vision Statement: Eight Characteristics
1. Brief 5. Focused
2. Verifiable 6. Understandable
3. Bound by a Timeline 7. Inspiring
4. Current 8. A stretch
Nader Al-Qaryuti
32 4-Setting goals

 After an organization has analysed its external

opportunities and threats as well as internal strengths
and weaknesses and has defined its mission and
vision, it can realistically establish goals that will further
its mission.

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

 4-Setting Goals
3-33

Purposes of Setting Goals

 Formalize expected 5+ years achievements.
 Provide a source of motivation.
 Provide tangible targets to strive for.
◼ Provide the basis for good decisions.
◼ Provide the basis for performance measurement.

Nader Al-Qaryuti
34
 formalize statements about what the organization
hopes to achieve in the medium-to long-range period
(i.e., within the next three years or so).
 Goals provide more specific information regarding
how the mission will be implemented
 Goals can also be a source of motivation and provide
employees with a more tangible target for which to
strive
 Goals also provide a good basis for making decisions
by keeping desired outcomes in mind
 • And, finally, goals provide the basis for performance
measurement because they allow for a comparison of
what needs to be achieved versus what each unit,
group, and individual is achieving..

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

35 Strategy

 STRATEGIES At this point, we know what the

organization is all about (mission), what it wants to be
in the future (vision), and some intermediate steps to
follow to get there (goals). What remains is a
discussion of how to fulfill the mission and vision and
how to achieve the stated goals. This is done by
ereating strategies, which are descriptions of gane
plans or how-to procedures to reach the stated
objectives. The strategies could address issues of
growth, survival, turnaround, stability, innovation, and
leadership, among bthers.

Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall

 5-Strategies
3-36

◼Create strategies, game plans or “How

to” procedures to address issues of:
Growth
Survival
Turnaround
Stability
Innovation
Leadership

Nader Al-Qaryuti
 How the HR Function Contributes:
3-37
◼ Communicate knowledge of strategic plan.
◼ ‫فهم وتوصيل مكونات الخطة االستراتيجية للموظفين )رسالة رؤيا اهداف‬
)
◼ Provide knowledge of KSAs needed for
strategy implementation.
◼ ‫شو متطلبات تنفيذ االستراتيجية معرفة قدرات يتم من خالل تحليل‬
‫وظيفي‬
◼ Propose reward systems. ‫تطوير انظمة المكافأءة تقدن‬
‫معلومات مفيدة عن نظامها لتحميس‬
◼ The human resources (HR) function plays a
critical role in creating and implementing the
Nader Al-Qaryuti

strategies tha will allow the organization to

 6-Strategic Plans at the Unit Level
3-38

◼Every Unit mission statement, vision

statement, goals, and strategies
Must clearly align with
and be congruent with
◼the Organization’s mission statement,
vision statement, goals, and strategies

Nader Al-Qaryuti
 Alignment of Strategic Plan with
3-39
Performance
1-Organization’s Strategic Plan
Mission, Vision, Goals, Strategies

Critical to involve
2-Unit’s Strategic Plan all levels of
Mission, Vision, Goals, management
Strategies
3-Job
Critical to involve all Description
employees Tasks, KSAs

4-Individual and Team Performance

Results, Behaviors, Developmental Plan

Nader Al-Qaryuti
 7- Job Descriptions
3-40

◼Tasks and KSAs are congruent with

Organization and Unit strategic
plans.
◼Activities described support mission
and vision of Organization and Unit.

Nader Al-Qaryuti
 8- Individual and Team Performance
3-41

Organization and Unit mission, vision, goals

lead to:
➢ Performance management system, which:
✓Motivates employees to
* Display behaviors aligned with mission, vision, and goals
* Produce results to support mission, vision, and goals

✓Aligns development plans with

organization priorities
Nader Al-Qaryuti
 3-42 Strategic Plan → Leads to → →
Six Choices in PM System Design
1. • Criteria (Behavior vs. Results)
2. • Participation (Low vs. High)
3. • Temporal Dimension (Short-Term vs. Long-Term)
4. • Level of Criteria (Individual vs. Team/Group)
5. • System Orientation (Developmental vs. Administrative)
6. • Rewards (Pay for Performance vs. Tenure/Position)

Nader Al-Qaryuti
 9-Building Support—Answering
3-43 “What’s in It for Me?”
◼ For top management support:
Emphasize that PM helps carry out an
organization’s vision
◼ For support from all levels:
 Involvement
 Participation (voice feedback and concerns)
 Understanding of organizational vision and
goals
Nader Al-Qaryuti