Strategic performance management

Question 1

Otely 1999 questions

Answer 1

1.what objectives are essential to the orgs future success and how does it go about evaluating the objectives
2. what the strats and the plans that have been adopted and how will it be successfully implemented?
2b. how will it asses and measure the performance of these activites
3. what level of performance does the org need to achieve the questions above, and how does it go about setting targets about the above questions
4. what rewards will the employee get for achieving targets

Question 2

what have the frameworks from performance management tried to do?

Answer 2

attempt to integrate financial and now-financial measures of performance and also facilitate the strat being put into place and how they improve performance

Question 3

alternative performance management frameworks:

Answer 3

result/determinants framework which authors apply to the service industry (1991, fitzgerald)
performance pyramid (cross 1991)
Performance prism (neely,2002)
BSC (Kaplan and Norton 1992)

Question 4

BSC

Answer 4

Seeks to link performance measures to an orgs strategy
1. customer perspective
2. internal business
3. learning and growth
4. financial

Question 5

BSC assumptions, what you do for you objective and types of performance measures

Answer 5

each performance measure is part of a cause-and-effect relationship
-implement the BSC major objectives for each of the perspectives
-objectives should be translated into specific performance measures, targets and initiatives
-consist of two types of performance measures
1. lagging
2. leading

Question 6

Financial perspective

Answer 6

Revenue growth- e.g. new products, develop new customers
cost reduction-reduce product cost per unit
asset utilization- improve asset utilization

Question 7

Customer perspective

Answer 7

increase market share, customer retention/acquisition/satisfaction/profitability
customer value proposition- improve product functionality

Question 8

Internal Business Perspective

Answer 8

Innovation- increase no of new products
operations-increase process efficiency
post sale-increase service quality

Question 9

Learning and growth perspective

Answer 9

increase employee capability

Question 10

BSC: Cause-and-effect relationship

Answer 10

every measure should be an element of a chain of cause and effect relationships that communicate business strat

Question 11

Benefits of BSC

Answer 11

brings four perspectives into 1 report
gives framework of translating comps strat into coherent set of performance measures
helps managers consider all important operational measures- see improvement in one area may affect another

Question 12

Criticism of BSC

Answer 12

cause-and-effect are too debatable and lack of theoretical underpinning or empirical evidence
omission of other important perspectives

Question 13

why is it important to look at non-financial performance measures

Answer 13

-need to look at their experience to customer and employees
-orgs have impact on society and environment
can allow org to benchmark to see if they are getting better
sets goals system for people in org
creates visibility and allows focus