Islamic Business and Performance Management cover

252 pages · 2023

Catalog title1st Edition

Islamic Business and Performance Management

The Maslahah-Based Performance Management System

By Achmad Firdaus · Khaliq Ahmad

Published
May 31, 2023
Imprint
Routledge
Edition
1st Edition
ISBN
9781003390947

Overview

About this book

This unique book discovers a new dimension in the study of strategic and performance management in Islamic Business studies. It addresses the missing link of spirituality from modern-day organizational structure in the presence of high-tech pressure in all areas of human endeavours.

The authors propose an integrated study of Islamic business approach to strategic and performance management systems to achieve sustainable organizational performance. The book explores employees’ wellbeing and organizations’ perceiving work environment as a spiritual pathway to cultivate values in Islamic business ecosystem to sustain humanity. It is all about care, empathy, and sustenance of others, about truthfulness and management being truthful to themselves and others and endeavouring to live their values more effusively while performing their work. The book stresses the impact of spirituality in performance management, concluding that for any organization to run efficiently, spirituality is the core component to attain happiness, contentment, and success.

The book will be of interest to a variety of management scholars, including those researching and studying performance management, talent management, strategic management, and business ethics.

Subjects

Area Studies, Economics, Finance, Business & Industry

Inside the book

Table of contents

Select a chapter to read its abstract.

Part IOrganization Requires done Maslahah

Pages: 56

No chapter abstract available.

Chapter 1Islamic Economic System

Pages: 23

To expand his business, a developer displaced poor people and grabbed community land. With the strength of his capital, the developer committed violence to force people to give up their land. This raised resistance from the community. But with the strength of the funds he had, the community finally gave up their land to the developer. The existence of housing complex development in the community indeed increases economic growth in the area. However, the intended economic growth is built on the suffering of the surrounding community. The economic growth that was created surely does not last long. We often meet such stories around us. This may happen because there is a misinterpretation in understanding the real meaning of economic development.

Chapter 2Falah as Organizational Goal

Pages: 5

This chapter is about how being happy is a dream for many. However, not everyone can feel happiness. Some people have food, drink, housing, and clothing that are fulfilled, but they are still not satisfied. This happens because the non-material needs in the form of peace of mind and recognition of social status have not yet been met. The concept of happiness, which is summarized under the term falah, includes the physical, intellectual, emotional, spiritual, social, birth, inner, world and otherworldly dimensions. From now on, since falah is an organizational goal, the organizational goals must be reconsidered.

Chapter 3Maslahah as the Intermediary Organizational Objective

Pages: 14

This chapter describes Maslahah, that is, something that is considered good, bringing good and avoiding bad or harm, physical and spiritual, tangible and intangible, for individuals and organizations, both for this life and the afterlife. Maslahah has three levels, namely Daruriyah (necessities), Hajiyah (needs), and Tahsiniyah (complementary/wants). Maslahah daruriyah are elements in the human life that are imperative to be fulfilled in order to be happy both in the present life in this world and in the hereafter. Maslahah hajiyah is a secondary need whose existence is necessary to eliminate difficulties or to better achieve the fulfilment of the five primary needs. Maslahah tahsiniyah is a tertiary need that should exist because of the requirements of courtesy and customs. Maslahah is the intermediary organizational goal that must be achieved by the organization. Maslahah is achieved through the protection of religion, soul, intellect, descendants, and wealth.

Chapter 4Individual Maslahah Fulfilment Efforts

Pages: 7

This chapter describes the efforts that must be made to fulfil the five basic needs. Life in the world must be centred on worship, the protection of the soul, the protection of progeny, the protection of the intellect, and the acquisition and proper use of wealth. The orientation to worship is the brain of all activities. Worship orientation is the centre of the earth's core that moves the tectonic plates. Worship orientation is the engine for a supercar. Worship orientation allows positive spiritual energy to flow into individuals. Worship orientation becomes an internal driving force; thus, worship orientation is a stimulus for all other orientations.

Part IIMaslahah as a Basis for the Organizational Performance System

Pages: 52

No chapter abstract available.

Chapter 5The Measures of Organizational Performance and Fulfilment Efforts

Pages: 12

This chapter describes two different paradigms in managing organizations. First, the organization is created to win the competition. Second, the organization is created to fulfil the duty as a caliph. The first paradigm is represented by the balanced scorecard (BSC) approach. The second paradigm is explained by the Maslahah Performa (MaP)approach. Initiated by Kaplan and Norton, the BSC is a system for measuring organizational performance from four perspectives: Financial, Customer, Internal Business Process, and Learning and Growth. MaP measures the performance of an organization based on benefits. MaP is developed from meeting individual basic needs (Maslahah daruriyah), namely protection of religion, soul, progeny, intellect, and wealth, to meeting basic organizational needs, namely worship, protection of soul, protection of progeny, protection of intellect, acquisition, and proper use of wealth.

Chapter 6Maslahah and Orientations

Pages: 32

The chapter describes the orientation of creating an organization based on utility. Worship orientation is the view of protecting and preserving religion. Internal process orientation is the view of protecting and preserving the soul. Talent orientation is the view of the protection and preservation of talent. Learning orientation is the view of the protection and preservation of the intellect. Wealth orientation is the view of protecting wealth. This chapter also explains the concept of Maqasid al-shari’ah (the goal of Shari’ah), which is very important in an organization. Stakeholder requirements are the basis for determining the work process within the organization, but these requirements must be aligned with Shari’ah.

Chapter 7Customer Orientation and Preservation of Customer Relationship

Pages: 6

This chapter describes customer orientation. For organizations, customers are Allah's means of providing for the organization. This statement does not mean that Allah is not able to provide the organization with food directly, but Allah has created the customer as a medium for providing the organization with food so that the organization can deal well with customers. This is a form of embodiment of the mission created by the organization; the organization was created to fulfil the duty as a Caliph. This shows that there is a medium in the middle between the organization and the customer. In the process of serving the customers, the organization will do its best to serve the customers. Similarly, the customers will show the utmost respect to the organization. The result is that both parties will see the interaction as part of the worship of Allah.

Part IIIManaging Maslahah-Based Organizational Performance System

Pages: 68

No chapter abstract available.

Chapter 8PDCA Cycle of MaP Performance System

Pages: 3

Begin a work by planning. Do not keep the planning in a package. Carry out the work as planned. Keep track of whether the work is meeting expectations. Take action. Do something and do not stand idle. This chapter clarifies that MaP is implemented through a plan-do-check-action (PDCA) approach. The reason for choosing PDCA is that PDCA has become a powerful management tool since its introduction by Edward Deming in the 1950s. MaP is implemented in several stages: performance planning, performance implementation, performance evaluation, and performance measurement. In addition, PDCA is developed in eight steps of the MaP cycle. Performance planning is a very important stage. It accounts for about sixty-one percent of MaP performance management. The other stages account for about thirteen percent.

Chapter 9Performance Planning

Pages: 50

This chapter describes the steps involved in planning a performance system (Maslahah Performa). This is the phase in which the organization's benefit building is constructed, beginning with the blueprint for the benefit building in the form of strategic planning, the Maslahah foundation of the benefit building, Maslahah behaviours that the users of the building must engage in, and the measures of goodness that become the benchmark for successful performance. To create a solid benefit building, performance measures should be divided into three groups: Compliance, Benefit Orientation, and Sustainability. Finally, to ensure that each individual approaches the task consistently, purposefully, and responsibly, a performance contract is required.

Chapter 10Performance Implementation

Pages: 3

This chapter describes the implementation of Maslahah performance. This is a step in translating strategic planning into real action. The long-term performance plan is technically described in the annual performance plan. To ensure that all target is met, a performance measures map is created for all parties. This is to ensure that the parties involved with the key performance indicators (KPIs) can support the achievement of the target. Sometimes a special team needs to be formed to execute a good performance. To facilitate the implementation of the performance, all necessary resources are allocated appropriately. The budget is one of the most important supporters. It is impossible to achieve the performance program if the budget is not properly prepared.

Chapter 11Performance Evaluation

Pages: 6

This chapter describes the process of monitoring performance activities. There are three important issues related to the monitoring process: what is being monitored, what needs to be done after receiving the monitoring results, and what is the relationship between individual performance, departmental performance, and overall organizational performance. The subjects of monitoring are the individual's performance, the department's performance, and the organization's performance. In monitoring individual performance, a supervisor must be able to act as a coach for the employees who report to him or her. The supervisor must be able to give instructions to subordinates or show them a way out so that they can exceed the agreed upon goal. This is important because the performance of the organization depends to a large extent on the performance of the individual.

Chapter 12Performance Action

Pages: 4

This chapter describes the actions that need to be taken based on the monitoring results. The activities focus on two things, employee appreciation and corrective or improvement actions. Appreciation comes in the form of rewards. An organization is a collection of people. They need recognition for the successful completion of their tasks. Appreciation is very important because it can increase work motivation. Improvement actions take three forms, corrective action, preventive action, and continuous improvement. Corrective actions are actions taken to eliminate the cause of nonconformity. Preventive action is an action taken to eliminate problems that may lead to nonconformities. Continuous improvement is an action taken in a sustained manner to improve the effectiveness of the performance management system.

Part IVApplication of Maslahah-Based Performance System

Pages: 40

No chapter abstract available.

Chapter 13Maslahah Performa Building

Pages: 13

This chapter describes an example of how to set up a Maslahah Performa (MaP) building. The organization develops a strategic plan. The strategic planning must explain that the organization establishes strategic objectives and strategic initiatives for each Maslahah orientation, namely worship, obedience, internal process, sustainability, talent, learning, customer, and wealth. A strategic objective may have one or more strategic initiatives associated with it. In addition, the organization establishes the Maslahah foundation and Maslahah behavior for each orientation. Each strategic objective has measures, formulas, and targets for five years.

Chapter 14Case Study

Pages: 23

This chapter describes a case study of the application of Maslahah Performa (MaP) in an insurance company. The company has a vision and mission that are consistent with the concept of Maslahah. The company has received numerous awards from independent institutions. In strategic planning, the company is quite good at establishing the Maslahah foundation and determining the Maslahah behaviour. Strategic objectives have been set for all Maslahah directions.

Chapter 15Conclusion

Pages: 2

The purpose of the organization must be consistent with man's duties as the vicegerent of Allah on earth. The duties can be fulfilled if the basic human needs are satisfied. The same happens when the basic needs of the organization are met. Basic human needs include religion (al-din), soul (al-nafs), progeny (al-nasl), reason (al-’aql), and wealth (al-mal). In the organizational context, basic organizational needs include six orientations: worship, internal process, talent, learning, customer, and wealth orientation. The MaP performance system is carried out using the PDCA cycle, which has been adapted to the needs of the performance management system.