S1: defining PM as a field Flashcards
What is PM? Why do organizations use PM? How to design a PMSP
What is performance management as a field?
Performance management studies how performance information is used to manage employees and organizations, tackling coordination and motivation challenges.
What are the purposes of performance management systems and processes (PMSP)?
1) Helps clarify the value proposition/purpose of the PM. Purpose might be:
Supporting coordination, identifying and rewarding performance (motivation), and guiding strategic and operational actions of self-managed employees.
Why is performance information important in performance management?
It aims to improve coordination and motivation to better achieve organizational goals
What are the three domains of performance management?
Business (strategic alignment), Process (operations management e.g. a sales or production process), and People (employee motivation and development).
What are the managerial roles in performance management?
Facilitating (helping employees to perform, support employee decision making), Incentivizing (rewarding performance, regulating employee decision making), Orchestrating (monitoring and aligning efforts, supporting manager decision making), and Documenting (ensuring compliance and accountability, regulating manager decisions).
What are the two components of any performance management system or process?
Performance information (quantitative/qualitative, financial/non-financial) and rewards or punishments (bonuses, recognition, firing).
What do we mean by an organizational context? Why is the culture of an organization important for the design of PMSP?
Context: people, organization and culture, which should be aligned with the PMSP (performance information and reward/punishment) to ensure effectiveness of the system.
People: doves/hawks?
organization: team or individual tasks, specialization or multi-tasking? centralized or decentralized org.?
culture: norms like equality
What may the consequence of measuring be for managers and employees?
Managers may lose a clear sense of what measures actually drive the results, and have a harder time controlling. Employees tend to get lost in day-to-day noise and tend to perform distorted behavior
How does Cespedes and Marsh suggest identifying the right metrics for your measure?
Identify the most relevant KPIs by deconstructing the sales funnel. E.g. when a long selling cycle is more appropriate incentives should be aligned. In contrast measuring closed deals here, would be very wrong
Linked to value creation, how do we define ‘coordination’
It is about making sure that the right employees are performing the right tasks in the right way at the right time
Linked to value creation, how do we define motivation
It is about the motivation of the employee. It is about the level and orientation - reflected in engagement, effort, endurance, honesty.
How might performance information destroy value?
When it leads to demotivation (motivation) and struggles to coordinate (coordination) - the 2 pillars
What is organizational value creation about?
It is about bringing the organization closer to achieving its goals, with 2 major challenges being: coordination and motivation
Why is clarifying the value intention of the performance measure crucial for designing the PMSP?
A system should be aligned with its purpose to ensure it is effective. E.g. a system for coaching should be designed differently to one determining bonus payments. The three purposes are business, process and people, linked to the 4 tasks: facilitating, incentivizing, orchestrating and documenting
How can purposes be mapped?
Any PMSP can be mapped according to which domain it serves and which managerial role it fulfills. E.g business domain: balanced score card, links to the managers role in facilitating, incentivizing and orchestrating.
