Pages: 7

This chapter identifies and discusses the four disciplines that contribute to the study of performance management: strategic management, organizational behaviour, organizational theory, and management accounting. This chapter argues that the study and practice of performance management is best understood as an interdisciplinary as opposed to a multidisciplinary endeavour. As later chapters of this book demonstrate, performance management requires an integrated understanding of its four underlying disciplines to achieve effective performance management designs. Practitioners and scholars of performance management should therefore position themselves at the intersection of the four disciplines and employ a single, integrated lens of study and analysis. This chapter concludes with a description of the book’s layout, including the book’s division into four parts and the chapters comprising each part.

Pages: 36

No chapter abstract available.

Pages: 10

This chapter discusses the origins of the term “performance management” and David Otley’s adoption of this term from the field of applied psychology. The chapter describes how the management accounting discipline used to refer to this field of study as “management control.” The chapter traces performance management’s roots back to these earlier management control days to help the reader appreciate the concept’s modern-day definition, application, and use. Following the specification of the book’s definition of performance management, a discussion of the various parties involved in the implementation and practice of performance management is provided.

Pages: 11

This chapter traces the history of performance management and identifies key milestones in the evolution of performance management thinking. Special attention is paid to the contributions made by prominent scholars to the field of performance management and, in particular, these leading scholars’ respective developments of performance management frameworks. These frameworks are compared, critiqued, and used as the basis for developing this book’s original performance management framework. Compared with past performance management frameworks, the one offered in this chapter better represents the multiple, interlocking elements of performance management and offers descriptions that are more relevant to practitioners’ ways of thinking. The new framework, which is shown as Figure 3.1, is used to motivate and focus later chapters.

Pages: 13

This chapter discusses five of the most prominent theories used to guide the research and practice of performance management. Each of these theories is separately described, discussed, and critiqued. The discussion of each theory includes illustrations relating the theory to performance management practice and research. The chapter concludes with the presentation of a table that associates each theory with specific performance management elements. This table explicitly reveals the breadth of performance management issues covered by each theory. As will be seen, contingency theory and stakeholder theory are particularly useful theories for explaining performance management practice and guiding the field’s research.

Pages: 76

No chapter abstract available.

Pages: 11

This chapter defines and discusses the meaning of the term “stakeholder.” Stakeholders exert a powerful influence on the goals and objectives an organization adopts. These adopted goals and objectives are, in turn, a significant determinant of an organization’s formulation and implementation of strategy, both the corporate-level strategy it adopts and the business-unit or competitive strategy it pursues. The chapter proceeds to describe, discuss, and offer examples of the key features of organizational mission statements, vision statements, and slogans. The chapter concludes by showing how an organization’s use of organizational mission statements, vision statements, and slogans can be connected with the strategy it pursues.

Pages: 21

This chapter explores and discusses the relationship between ethics and performance management. As discussed in Chapter 2, the essence of performance management is ensuring employees do the right thing. The three main reasons employees fail to do the right thing are the lack of or a poorly articulated strategy, employees possessing inadequate skills, and the failure to ensure employees are properly motivated. The first issue is the topic of Chapters 7 and 8, while the second issue is covered as part of Chapter 11. The third issue is both central to the present chapter and a recurring theme throughout the book. More specifically, and in terms of the present chapter, employees who are unethically motivated will not be conforming to performance management’s mandate of ensuring employees are doing the right thing.

Pages: 12

This chapter introduces the concept of organizational strategy and its importance to organizational success. This chapter also discusses how organizational strategy is often narrowly misconstrued as financial strategy (i.e., providing good returns to shareholders) or marketing strategy (i.e., developing good distribution channels). This chapter further proceeds to describe the different types of strategy: corporate and business unit levels. The former is the focus of the present chapter, while the latter is comprehensively discussed in Chapter 8. In addition to describing the three types of corporate-level strategies and providing contemporary examples of each, this chapter goes on to discuss the basic associations between corporate-level strategies and performance management design.

Pages: 20

This chapter discusses strategy as it relates to business units, a topic that is commonly termed competitive strategy. Various popular competitive strategy taxonomies are reviewed and critiqued, including the taxonomies of Miles and Snow, Porter, Cooper, and Kim and Mauborgne. The concept of order-winning criteria is used as a prism through which to view each taxonomy’s strategy groupings. The chapter ultimately leverages these understandings of strategy to illustrate the implications of competitive strategy on performance management design and operation. Advice is offered about the typical influence the pursuit of different competitive strategies has on organizational systems, processes, and procedures, organizational structures, and organizational cultures.

Pages: 10

This chapter examines organizations’ evolving use of digital business transformation (DBT) and the effect on performance management design and practice. As this chapter will show, an organization’s use of DBT has impacts on its strategy, organizational structure, employee work practices, leadership, and organizational culture. Accordingly, this concept comprises themes that address multiple aspects of the book’s performance management model. In recognition of the wide-ranging influence DBT has on performance management design and practice – especially in terms of how an organization conceives, implements, and tracks the progress of its strategy – this chapter has been purposefully positioned to appear just prior to the book’s twin chapters on strategy.

Pages: 77

No chapter abstract available.

Pages: 19

This chapter defines organizational structure, which is presented in Figure 3.1 performance management framework as one of the three main levers of performance management. This chapter then proceeds to describe the dimensions of organizational structure and show how these dimensions influence employee behaviour and ultimately strategy implementation. The concept of a responsibility centre is then introduced. The ensuing discussion reviews the four main types of responsibility centres, describes the similarities and differences between them, and provides multiple examples of each responsibility centre. This chapter finally concludes with a discussion of senior managers’ contributions which ensure that their respective organization’s choices of responsibility centres are fit for purpose.

Pages: 34

This chapter discusses the book’s second main lever of control: an organization’s systems, processes, and procedures. This lever of control has consumed the bulk of the performance management literature’s descriptions of how organizations seek to influence their employees’ implementations of their organizations’ strategies. Organizational systems, processes, and procedures represent formalized approaches to directing and encouraging specific types of employee behaviour (i.e., those behaviours that will support the implementation of an organization’s strategy). Three primary organizational systems are identified and extensively discussed: performance measurement systems (including financial, non-financial, and hybrid systems), employee incentive systems, and human resource systems. Numerous examples and references are made to contemporary organizational practice.

Pages: 22

This chapter discusses organizational culture and its role as one of the three main levers of performance management. The use of organizational culture as a lever of performance management has been given little attention in the performance management literature. The present chapter begins by defining organizational culture. It next identifies and discusses the six dimensions of organizational culture: shared beliefs, shared values, shared experiences, symbols, exemplars, and power structures. The discussion draws on various organizational examples to illustrate these six dimensions. After examining the process an organization’s senior managers use to check for poor alignment between the organization’s culture and the organizational strategy being pursued, the chapter concludes with a discussion of how senior managers can help create organizational cultures that encourage employees to implement their respective organizations’ strategies.

Pages: 40

No chapter abstract available.

Pages: 15

This chapter discusses the constraining influence an organization’s internal contingent factors can have on its choice of performance management design. Scholars and practitioners must be aware of these factors. Successful performance management design requires not only ensuring a good fit between an organization’s strategy and the three primary levers of performance management, but it also requires ensuring alignment between an organization’s internal contingent factors and the types of performance management levers it uses. The four internal contingent factors of leadership, organizational lifecycle, organizational size, and organizational ownership are discussed. Compatible configurations between these factors and performance management design are extensively covered.

Pages: 14

This chapter identifies and discusses the external contingent factors that influence an organization’s operation of its three levers of performance management. The four external contingent factors discussed are industry, national culture, government regulation, and labour markets. Organizations have limited, if any, control over these external contingent factors, or at least this is the case once senior managers have chosen the industry/industries they will compete in and the countries from which they will operate. As this chapter shows, these external contingent factors determine not only how much tax an organization pays and the health and safety regimes it operates, but also the external factors that help determine the organizational structures, operating systems, processes and procedures, and organizational cultures an organization will adopt.

Pages: 9

This chapter extends and concludes the book’s previous discussions on the interconnected nature of the elements of performance management. Throughout the book, the idea that performance management represents an integrated package of influence of and control over employee behaviour has been promoted. Further and final comments on the interconnectivity of an organization’s performance management system are provided. Comparisons between this book’s and other scholars’ performance management frameworks are woven into this discussion. This chapter ends with a discussion of the research opportunities existing in the field of performance management. This discussion covers testable research propositions, issues associated with construct specification, and research method choice.