A different perspective to performance management

A different perspective to performance management

Numerous researches have been conducted by numerous people in developing a science to define a framework for accurate performance management. Performance management is seen as a key tactical tool in identifying gaps in a tactical plan which ultimately drives organizations to a successful strategy.

Recently I was asked a question at an interview as to what advantage a good performance management framework, would give to a Chief Operating Officer. Theoretically it provides a clear view of deviations from the desired position.  The wise gentleman replied a good performance management framework would give a competitive advantage to the CEO.

Giving a second thought on this response, a performance management framework is actually the first step in the cognitive decision making process of humans, which is the information search process. A performance management system will actually enable managers to make informed decisions.

Thus the question I am now facing is why should a performance management system be aligned with the tactical plan? The initial test in a sound performance management framework is to identify the strategy, have a tactical plan in line with the strategy, and to make the tactics measurable. These measurable KPIs are the key building blocks for an effective performance management system.

But in reality if it is a tool to take informed effective decision, why shouldn’t we start from what are the decisions that we should make. I think the modern trend in performance management leads to an information over load, whether it is dash board concept or a simple employee performance report.

What are your views on this? Should it be a reverse engineering approach where we should start from what decision needs to be made?

The Value Proposition

In delivering superior value to customers, as an organization, the organization needs have a well positioned value proposition. In my research on what this value proposition really contemplates on, I came across this interesting definition put forward by Aaker & McLaughlin (2007).

A customer Value proposition is the perceived functional, emotional, social or self expressive benefit that is provided by the organization offering. And the most important attribute of a good value proposition is that the proposition should be sustainable overtime to differentiate the offering from its competition to support the organizations long term strategy.

This definition signifies the importance on customer perception, which is molded external, internal factors which has a unique moral definition for each person. A company should be very careful in mingling with the psychological transaction between the customer and the seller since once perceived as distrustful will lead to cascaded social perception.

For instance, Volvo positioning the brand as the worlds safest car brand could tarnished if proven otherwise. Most of the companies find it difficult to understand the level of match between the presented value proposition VS the perceived value proposition.

Hence it is always vital that as a company conscious efforts are put to understand this gap. And also critical aspect would be to benchmark against the competition which targets the same consumer segments and focus on the tangible KPIs like money spent on the transaction.