Performance management can be considered as a fresh and new perception in the field of management. The literature of performance management typically starts off with numerous numbers of examinations and investigations of the term “performance. ” Methods, for example “planning, budgeting, sales and billings” have been widely utilized and acknowledged since many years in organizations and associations. One main point, raised by performance management is the fact that being busy or engaged in work is not equivalent of generating outcomes.It gives an idea that only getting trained, providing well-built commitment and doing a lot of hard and struggling work are not the only outcomes required in an organization.
The major part played by performance management is its highlighting step on accomplishing good and proper outcomes. This means that performance management promotes the efforts of getting away from staying busy to the pathway of competence and efficiency. All the people part of a business are suppose to be doing what they are assigned to do in order to guarantee that measures of performance management are being followed effectively and properly. McNamara, 1999) Four Key Benefits of Performance Management are: 1.
PM focuses on outcomes, instead of performances and actions 2. Arranges directorial actions and progressions to the objectives of the association 3. Develops a system-wide, long-term vision of the association 4. Manufactures significant dimensions (McNamara, 1999) The organizations and associations of today’s world are tending to modify their weak points more quickly and efficiently than the ones in history and previous times.Therefore, many experienced and skillful people have set up strong conditions about the continuous dimensions that are to be taken in performance management.
They have firmly emphasized that no measurement is acknowledged sooner until that measurement has proved to be significant and important for an association. There are some everyday measurements that need to be taken while accepting anything proposed by performance management for an organization. The most important and significant component of performance management method is the continuous communication within its capacity. McNamara, 1999)Performance Evaluation A performance evaluation is something which is accomplished during the performance series to manuscript and also to check on an employee’s improvement on the pathway to achieve the performance plan. Performance evaluations are not considered or taken as “official” documents. (Policies and Procedure Manual, 2001) Country Risk “What is country risk and how should it impact global investment strategies? ” there are five chief country risks: Political Risk, Economic Risk, Financial Risk, Composite Risk, and Institutional Investor’s country credit ratings.
There is substantial information limited in the “ICRG composite, financial and economic ratings, in particular. ” For instance, when portfolios based on transforms and changes are highlighted in the risk ratings, “we find risk-adjusted abnormal returns in the range of 1000bp per year. ” The country risk ratings are associated with straightforward evaluation characteristics. For example, “25% of the cross-sectional variation in book-to-price can be explained by the risk ratings.This explanatory power is largely driven by the ICRG economic risk which alone can explain 18% of the cross-sectional variation. ” (Erb, unknown) Strategic Planning helps determine the possible options and how to use them in the best possible way keeping the organization’s values in mind; however it is an extremely controlled procedure.
Depending on what the state of affairs is this could perhaps, be changed and altered to suit the exact nature of the circumstance. Through the continual practice of strategic planning a link is established between long term, medium term and even medium term planning.Through this method the comparative usefulness (both practically and financially) of the contingency plans are judged by the administration. However one must be clear that strategic planning does not make any kind of forecasts.
The elemental question of inquiry is, “What is the most appropriate course of action, given the capabilities of our organization and the circumstances in which we operate? ” Strategic planning has five key stages, all of which can be articulated briefly, they are: “plan to plan; framing the decisions; strategic alternatives; analysis of alternatives; and creating the plan.As with any other method there are quite a number of ways that one can go about accomplishing the task but more often than not, every stage is typically found in one form or another. “The strategic planning process begins by setting the boundaries of the planning process. ” This is dubbed “framing the decisions”. The very first concern is to decide which components of the business will not constitute of the features that need to be taken into account. The tone of the strategic planning procedure needs to be set by pre-determining the reason behind the goals, the goals themselves and the consequences of the goals, of the establishment.
Every alternative available is approached so that the goals of the cooperation can be achieved as they depend on the principles and ideals merit. It is of the utmost importance that the strategic planning has some sort of deadline for when it is supposed to achieve its target. This deadline is generally between 3 to 5 years. (IFLA, 2003) The desired goals and the reasons for achieving these goals must be kept in mind by the heads of the business. Varied results will only be achieved when such an outlook is shown towards approaching any task in the organization as then they will have a diverse number of evaluations.It is the leaders’ job to make sure that he has only selected the correct choice after he has made a through assessment of very other choice.
However, some of these decisions are simply made because, “that’s the way it has always been done”, some made because they have a lower risk factor than others, and some because they do entail extreme alteration. The bottom line is that these are legitimate grounds for making these decisions as economic, practical and financial factors need to be kept in mind.One of the most useful aspects of strategic planning is that is lays the ground work for pitting different alternatives and choices against each other so that the final decision made is from the cream of the crop of the choices for that particular situation in that particular point in time. (IFLA, 2003) Advantages of Strategic Management The numerous advantages of Strategic management are: Discharges Board Responsibility: relinquishing the board of directors from their tasks is one of the main reasons that strategic management methods are founded.
Forces an Objective Assessment: It is important as it deals with everyday tasks and thus affords them the luxury of future of the organization. It allows the board of directors and senior administration to focus on what is really important. Provides a Framework For Decision-Making: An outline is made by the strategic management so that the personnel are outfitted to make daily decisions. In the hierarchy of businesses, it is not possible for that the higher level know every little decision that the lower or next level may make.A basic out line is given by the strategic management and this is supposed to corroborate with the “values of an organization, sets objectives, clarifies threats and opportunities, determines methods to leverage strengths, and mitigate weaknesses. ” A structure is established so that any decisions made are contained inside the margins drawn.
The combined result of everyone’s decisions and collaborations is known to have a significant amount of influence on the success of the business.The structure pre-determined would allow people in the organization such as the executive director and personnel to make decisions which in turn will center the concentration on their accomplishments. (Robinson, 2005) Supports Understanding & Buy-In: When the Board and the staff can have a say in the decisions it makes it easier for them to understand exactly “why that direction was chosen, and the connected settlement”. It is important for some individuals to know why to appreciate the course of action.
On the other hand some, who normally wouldn’t care are forced to understand why, when and what, when they are involved and some just simply want to know. (Robinson, 2005) Enables Measurement of Progress: Strategic management measures makes an organization clearly set up goals and asses the level of achievement. The corner stone for an organization’s success is to know what it really wants to be successful in and then setting up goals in collaboration with ideals. It is important that the higher levels of the business hierarchy keeps these objectives in mind and follows the adjustments to their business accordingly. Robinson, 2005) Provides an Organizational Perspective: When each individual problem is assessed and taken care of it does not allow a look at the bigger picture and its integrated features. Through strategic management a bird’s eye point of view of the entire organization is taken and this permits a view of even the interconnected elements which is necessary so that a scheme is devised that compliments the organization in its entirety and not just the single features.
(Robinson, 2005) Disadvantages of Strategic ManagementEverything doesn’t work out as planned: A major problem with strategic management is that is a requisition for it to work out tactics is that the establishment should be able to foresee and forecast upcoming situations. Current studies done in the private sector show those businesses that actually plan ahead and build on accordingly tend to be more successful than businesses that don’t. (Robinson, 2005) It is Expensive: It should be obvious that those organizations that only do pro bono work do not have the funds to sign up advisors that will help them form tactics that will improve the success rate of their organization.Luckily for them, these days many advisors who themselves do pro bono work and can help them out; there are also agencies that provide financial assistance and bear the cost of taking on such counselors and advisors. But the bottom line should be that the organization does not suffer a loss in taking on such consultants and the implementation of any tactics should be in collaboration with the company’s goals". ”.
(Robinson, 2005) Long Term Benefit vs.Immediate Results: Strategic management procedures usually have a deadline of 3-5 years; by any given standard the benefits achieved are long term benefits. (Robinson, 2005) ”Impedes Flexibility: taking on a specific form of strategy will ultimately result in the organization not being able to take advantage of certain opportunities which may not coincide with the “plan”. This rigidity can be aggravating. Some organizations become very strict in following the strategy to a “t”, this leads to a deficiency in originality and suppresses the creative process in more ways than one.Unfortunately in circumstances such as these the success of the organization is hindered by the very factor that was supposed to grantee its success; the strategic management department.
Organizations can also be restricted by very well thought out plans, which addresses every issue and every problem. Nevertheless this ultra focused form of direction diminishes the organization’s capability to acclimatize. As time passes by it is only natural that new and improved strategy management techniques are coming up which addresses not only the problems but also how organizations can adapt. Robinson, 2005)Summary Strategic management has its advantage and disadvantages; like every thing else under the sun. But the majority of the disadvantages stem from incorrect uses, or dreadful recommendations from inexperienced or just plain awful advisors. In the end it is the consumer’s job to make sure that every piece of advice received is used according to the customer’s needs.
The key to successful strategic management is to have variety and then pick and choose and apply productively. (Robinson, 2005)