Best Practice Of Performance Management Strategy Is Key To An Organizations Ability To Gain A Competitive Advantage (Essay Sample)

BEST PRACTICE OF PERFORMANCE MANAGEMENT STRATEGY IS KEY TO AN ORGANIZATIONS ABILITY TO GAIN A COMPETITIVE ADVANTAGE.
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Best practice of performance management strategy is key to an organizations ability to gain a competitive advantage.
Introduction
The purpose of this essay is to discuss how best practice of performance management strategy is vital to an organization’s ability to gain a competitive advantage. It is important to state that the scope of this study will be to look at the term strategy, which is described as the commercial logic put in place by a business to gain a competitive advantage. Performance management is a group of activities adopted by management to ensure that desired output or organizational result are attained. A firm’s competitive advantage is its ability to outperform its competitors in its industry.
The aim of this study is to understand how performance management will lead to competitive advantage; the scope of the study will be to consider factors and concepts that will effectively assist in describing the aim of our study so as to reach a profound conclusion
The concept of strategy
Strategy over the years has been essential to organization performance; strategy can be seen as a number of goals and ends which a firm trying to achieve it and includes the means and policies adopted by such firm at achieve it (Porter, 1980). Strategy is the process of discovering the specific long-term goals of a firm and directing recourses and activities required to achieve the specified goals, (Chandler 1962).
Strategy looks at organizations regarding long-term direction and scope over a long period of time; it considers factors such as how resource should be used to meet market and stakeholders needs. (Johnson & Scholes, 2011). Strategy is very essential to organization growth survival and profitability, to succeed firms much choose the right strategic course of action and this course of actions must be effective implemented to translate to firm’s competitive advantage.
The concept of performance management
There is a need gives adequately provide description for the concept of performance management. Organizational performance itself can be seen at the overall result of organizational activities; the can be seen as at the total output of a firm where compared to the total number of input. (Zaffron, Logan & Steve, David 2009). In recent years, a number of organization have been attempting to manage their organizational performance by using balanced scorecard methodology; this method enables performance to be tracked and measured in multiple dimensions such as financial performance, here is looks at components such as return customer service, shareholder, and social responsibility.
However, performance management is a combination of all activities carried out by firms to ensure that goals are constantly being realized, in a manner that is effective and efficient; the concept of performance management is usually used as a means of accessing and improving the performance of individuals, departments and the organizational as a whole. Performance management is the process by which a firm aligns their operations, systems, resources and employees to the strategic objective and basic priorities. (Venkatraman $ Ramanujam 1986).
Competitive advantage
The term competitive advantage can be defined as a business concept and attribute that allows a firm or business organization to outperform its competitor in its industry. (Chacarbaghi & Lynch 1999). Organizations may enjoy a competitive advantage over their rival firms due to some factors these factors include access to resources more than its competitor's such resource may include technological advantage, skilled labor, suitable geographic location, and lastly, the firm might have instituted a high barrier of entry for other competitors. It can also be considered as a firm of property that organizations have over their competitors.
Competitive advantage can also be realized by a consistent offering of valued services to client better than that of its competitors. Firms enjoying competitive advantage are excellent at developing target market and developing products to meet the needs of such market this then translates to brand loyalty and increased customer preference, (Chacarbaghi & Lynch 1999).
Performance management strategy and competitive advantage (Applications)
At this point in the study, we shall look at the use of Performance Management strategy for the realization of competitive advantage by organizations. The essay will also discuss how the adoption and implementation of performance management have lead to competitive advantage in two particular organization of our choosing. The use of performance management strategy is most often use at the workplace. However, it can also be applied in any place where people interacts, such as schools, community, government agencies political settings and the health sector, (Mettler T, & Rohner P 2009).
Performance management has been defined as the integral and strategic approach adopted by organizations to improve effectiveness by increased and enhanced the performance of organizational employees, by developing capacities of teams and individuals,(Armstrong & Baron 1998). The realization of efficient performance by the organization must be hinged on its ability to get all employees to align their personal goal with that of the organization and also be motivated to achieve increased productivity and profitability, (Zaffron & Steve 2009). It is also important to stress that Performance management strategy can be applied to individuals, work groups and department, the effects of Performance management strategy is always positive if well applied to individuals, workgroups and departments.
There are basic strategies that must be adopted to achieve Performance management that will translate to competitive advantage, the first step is
Commitment analysis- this entails a clearly drawn up job mission statement for each job, this will contain the basic definition of each job in relation to firm’s purpose, product, and customers. The aim of job analysis is to determine the objectives and performance standards of each job position within an organization.
The next step will be work analysis, this done for particular jobs and it entails reporting, job description and structuring, the purpose of work analysis is to determine important objectives and performance standards for each job available in the organization.
It is important to stress at this juncture that the adoption and effective implementation of Performance Management strategy will translate into a competitive advantage for the organization. To achieve competitive advantage organization must be clear about the type of competitive advantage that intend to achieve, they must decide whether to achieve cost leadership and product differentiation, (Porter 1985). It is important to stress that performance management provides an avenue for competitive advantage. Performance management provides firms with improved business, employee performance and also provides modalities for implementation, hence better overall performance by a firm which translates to competitive advantage, (Boxall & Purcell 2003).
Considering this concept in relation to human resource management, it is the duty of every manager to manage people, at such, there is a need to understand that human resources the most valuable resource in organizations. Human resource is responsible for the coordination and implementation of activities of the organization, their actions can affect the running of any form of organization. (Stewart, 2003).
Therefore there is a need to effectively manage the performance of human resource within the organization to ensure that they are motivated at all times. There is a need also to ensure that every organizational member aligns his or her goals with that of the organization. Efficient management of human resource performance within an organization will translate to motivated works force at such increased productivity which will at long run provide the organization with a competitive advantage. (Stewart, at el 2003).
At this point, well shall look at the effects of performance management on specific business organizations, first mention in this category is banks in Pakistan. According to the research conducted by Ayesha Yaseen (2015) on the Performance Management Practices and Its Impact on Banks’ Performance in Pakistan, the study shows effects of performance management on specific areas of the business organization. Ayesha’s study concluded that performance management is vital in any organization, stating that the banking sector in Pakistan has evolved with the passages of time and the used of effective performance management techniques has led to sophistication in the industry hence translating to competitive advantage for firms in the banking industry.
Cargill is a food producer and distributor; the food company was struggling to engage and motivate it 155000 employees across the global this was a major problem for the firm as it recorded a decline in profit. In 2012 Cargill was able to introduce an everyday performance management system; this system was designed to institute daily encouragement and feedback into the job system. This method proved to be very effective as it brought about a turnaround in the business organization translating to better employee’s motivation and greater profits.
There is a need to adopt a new approach to performance management with the aim of improving performance. (Erhard& Micha...