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Relative Performance is the degree to which a
facility or system fulfills the purposes for which it was built or acquired, or
which it is now expected to fulfill; it is a function of effectiveness,
reliability, and cost. It can also be regarded as a measure of the success of an
investment.
Generically, relative performance can be described as the work involved in and
the results or products that accrue from conducting a process or activity. Hence
the following: (1) Human performance describes the manner in which individuals
perform a task and the outcome of such tasks; (2) System performance describes
how systems execute a task and the result of such tasks, (3) Organisational
performance describes what an organisation does and the impact of such
activities.
Relative Performance in business is specifically focussed on the need to set
standards, assess the performance of individuals and units, and intervene where
necessary to improve performance. Intervention could be in different forms. For
instance, it could be by replacing managers, selling off businesses or ensuring
turnaround of poorly performing divisions or businesses.
It is important not only to measure relative performance, but to also manage
performance. The reason being that the starting point of successful strategies
is acquiring, retaining and developing resources of a threshold that is at
least, sustainable.
As a result, the relative performance of an organisation can be assessed based
on its ability to meet its performance targets.
Performance targets relate to the outputs of an organisation such as product,
qualities, prices, or outcomes such as profit. The performance of an
organisation can be judged either internally or externally, on its ability to
meet these targets. However, within specified boundaries, the organisation
remains free on how targets should be achieved.
This approach can be particularly appropriate in certain situations. A typical
example is an organisation that has a corporate centre which controls the
strategies and performance of business units in order to ensure that corporate
objectives are achieved. In such an organisation (usually a large
establishment), performance targets will be set through divisions, business
units and functions. These will be translated into targets for individuals as
well.
In this light, performance management is therefore very important. Reason being
that it is a proposition aimed at improving management information. Performance
management enables the behaviour of resources and the effectiveness of
communication activities to be evaluated. Performance management includes
functions to gather statistical information, maintain and examine logs of system
state histories, determine system performance under natural and artificial
conditions, and alter system modes of operation for the purpose of conducting
performance management activities.
Performance measurement also involves assisting managers and supervisors in
establishing, maintaining, and monitoring effective performance management
programs to plan, monitor, develop, rate, and reward employee performance, and
services that support formal and informal award programs to provide employee
incentives and recognition.
Performance management is particularly relevant in the systematic process of
monitoring the results of activities; collecting and analysing performance
information to track progress toward planning results; using performance
information to inform program decision-making and resource allocation; and
communicating results achieved, or not attained, to advance organisational
learning.
The starting point of successful strategies is acquiring, retaining and
developing resources of at least a threshold standard and this clearly applies
to people as a resource. Therefore, relative performance can be managed by the
aid of activities that can help enable successful strategies in the following
ways:
By identifying people based core competences or implementing support strategies
on which future strategies can be built on.
Through goal setting and performance assessment of individuals and teams.
By introducing team incentives which tend to have complementary effects on
individual incentives rather than replace them.
Recruiting people with marketing and IT skills is a key method of improving
strategic capability particularly where new competences are needed in the
organisation.
Redeployment and redundancy planning are important especially if the
organisation is facing change.
Succession planning is also necessary to refocus away from preparing people for
particular jobs in a hierarchy to simply ensuring that a sufficient large pool
of talented individuals exist to meet future senior leadership requirements.
Reduction in the use of formal programmes in training and development to more
coaching and mentoring to support self development.
All of the above will help establish a performance level that will be
sustainable in the future if adequately implemented. However, the real challenge
for an organisation goes beyond the management of relative performance to
establishing a system of continuous improvement for the performance level
already achieved.
This is because like in many aspects of a business success, sustainability of
the performance achieved is quite the key to sustainable business growth.
Therefore there is the need to look at how relative performance can be improved.
Performance Improvement is a systematic process of discovering and analysing
human performance improvement gaps, planning for future improvements in human
performance, designing and developing cost-effective and ethically-justifiable
interventions to close performance gaps, implementing the interventions, and
evaluating the financial and non financial results.
The goal of any company is to provide value to investors. Information technology
can improve business performance and help you stay ahead of the competition, but
it must be subject to the same structures imposed on other areas of the
business. It must deliver real benefits in a cost efficient manner. For this
reason, outsourcing for example can be considered as one of the many strategies
of performance improvement in an establishment which can be considered as not
just the preserve of the IT department, but is relevant to the CEO and/or CFO
both of whom are responsible for the financial performance and growth of the
company.
One way of the many ways of improving relative performance is for an
organisation to form successful alliances. However, the success of alliances
tend to be dependent on how they are managed and the way in which the partners
foster the evolution of the partnership. The following are very crucial to a
successful alliance formation:
Trust is the most important ingredient of success and a major reason for failure
if it is absent. Trust comes in twofold. Trust can be competence based in the
sense that each partner is confident that the other has the resources and
competences to fill their part in the alliance. Trust is also character based
and concerns whether partners trust each others motives and are compatible in
terms of attitudes to integrity, openness, discretion and consistency of
behaviour.
Senior management support is important since alliances require a wider range of
relationships to be built and sustained. This can create cultural and political
hurdles which senior managers can help to overcome.
Defining and meeting performance expectations. This requires the willingness to
exchange performance information.
Clear goals and organisational arrangements- particularly concerning activities
that cross or connect partners.
Compatibility at the operational level requiring efforts by partners to achieve
strong interpersonal relationships at these lower levels and not just between
senior managers of the partners.
Allowing the alliance to evolve and change rather than prescribing it too
parochially at the outset.
In a nutshell, the relative performance of an organisation is dependent not only
on the overall corporate or business strategy, but also on the people (that is
the management as well as the workforce), the process of product and/or service
delivery, the strategic initiative of the organisation and any alliances formed
by and on behalf of the organisation. |
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