Performance

Introduction

This development plan will focus on the characteristics of my learning team as well as my personal characteristics as their leader. This plan will allow me to assess the needs of my learning team as well as the ability to hone in on their strengths, areas for improvement, and resources needed to help them reach their career goals. This development plan will also allow me to determine how my leadership style will impact the success of the team and give me the ability to adapt to different behavioral styles by reviewing each individual DISC Platinum Rule – Behavioral Style Assessment.

Personal and Individual Team Characteristics

Personal Characteristics

Based on the DISC Platinum Rule – Behavioral Style Assessment that both my learning team and I completed, we fall into three major categories – Interactive, Dominance, and lastly Cautious Styles. In my personal assessment I was categorized primarily as Interactive in style and traits. Based on this knowledge my primary style includes persuading, motivating, and entertaining others; whereas the assessment states my growth areas include attention to detail, short attention p, and low follow-through. The main focus or priority for me is people and being interactive, busy, and personal in the workplace setting.

Individual Team Characteristics

Two of the team members, besides me, were also characterized as Interactive – “The Impresser”. Some additional characteristics in this category include wanting to achieve results with flair, judging people by their ability to make things happen, working harder when bigger risks or rewards are at stake, prefer to share in work and goals with people, wanting to do things the ‘best’ way, and become restless, short-tempered, lashing out when under pressure.

Two team members had the Dominance Style traits which include individuals being time-sensitive, organized, and to the point. The Dominance Style is driven by two governing needs: the need to control and the need to achieve. The D Styles are goal-oriented go-getters who are most comfortable when they are in charge of people and situations. They want to accomplish many things now, so they focus on no-nonsense approaches to bottom-line results.

The Dominance Styles seek expedience and are not afraid to bend the rules. They figure it is easier to beg forgiveness than to ask permission. The D Styles accept challenges, take authority, and plunge headfirst into solving problems. They take charge in a crisis. They are fast-paced, task-oriented, and work quickly and impressively by themselves, which means they become annoyed with delays. They are willing to challenge outdated thinking and ideas.

Lastly, one team member had the Cautious Style traits which include analytical, persistent, systematic people who enjoy problem solving. They are detail-oriented, which makes them more concerned with content than style. The C Styles are task-oriented people who enjoy perfecting processes and working toward tangible results. They are almost always in control of their emotions and may become uncomfortable around people who are very out-going, e. g. , the Interactive Styles. Strengths and Growth Opportunities of Behavioral Styles

Strengths

Interactive Style leaders’ primary strengths are their enthusiasm, persuasiveness, and sociability. Dominance Style leaders’ primary strengths are accepting challenge, ability to take authority, and go head first into solving problems. They have an ability to get things done and their decision making skills are very high. Cautious Style leaders’ primary strengths are their accuracy, dependability, independence, follow-through and organization.

Growth Opportunities

Growth Opportunities for the Interactive Style of Behavior are broken into two categories with tasks and with people. Interactive Styles tend to underestimate the time and effort required by themselves or others to accomplish tasks. They also tend to be impatient, primarily when they are stressed or under pressure. Growth opportunities for the Dominance Style of Behavior include being broadening their perspectives.

They need to learn to be effective outside of their comfort zone by considering different points of view and other ways to achieve their goals. Growth opportunities for the Cautious Style of Behavior include being more attentive to details and timely follow-through. Curiosity of these leaders may lead to digressions while at work. These leaders are found to be intense by nature and tend to be impatient with themselves and others, especially when things aren’t going well.

Development Plan for Each Behavioral Style

Development Plans for the Team based on Behavioral Style

Interactive Style Development Plan

In order for Interactive Style leaders to be successful they need to be more selective about tasks that they take on and not be afraid or hesitate to ask others for help. When dealing with others they need to learn how to relax and enjoy regular recreation to ensure that they can handle their reactions in a proper manner to stress. Delegating tasks instead of taking everything on, asking for assistance on projects while coaching staff, will allow them to grow in their organizations, while still feeling like they are in the know.

Not only will this allow and them to focus on other opportunities they are developing their staff. In order to be successful in the work environment they need to prioritize, organize, see tasks through completion, and write things down. As their leader, I will show them that I admire their hard work and accomplishments, support their feelings when possible, interact with them, support their ideas and show them my positive side. Being that I am an Interactive Style leader this will come naturally to me in dealing with other leaders of this style in my group.

Dominance Style Development Plan

In order for these leaders to be successful they need to consider viewpoints of others and look outside the box for other ways to achieve goals. These leaders would benefit from being flexible in their decisions and this would help them solve problems more creatively. This not only allows for the leader to grow, but also develops more trust in the associates they are leading. As their leader I can provide precise data on projects that they are working on, allow them to work independently and do things within their limits, look for opportunities to modify their work-load focus, and allow them to take the lead.

Being that both this style and the Interactive style both preferring faster pace we will get along well with pacing the workflows. Cautious Style Development Plan For Cautious Style leaders to be successful they need to learn to pace themselves. Taking time-outs during the workday may help allay their natural intensity. They need to remain positive when dealing with situations and people under pressure. If they are able to control their thoughts and emotions in such cases, then they can use their creativity to discover workable solutions.

These leaders will benefit from staying focused on key priorities, sorting out tasks, outline expectations for associates, and allow others to take control of projects. This will not only allow the leader to balance their growth opportunities but will also allow their associates to gain more trust in the leader. As their leader, when I approach them for questions or projects I will ask them in a direct manner, show reasoning, provide explanations in writing, compliment them on their thoroughness, and ask tactfully how I may assist them if needed.

Conclusion

In conclusion, after reviewing each individual assessment of my learning group as well as my personal assessment through the DISC Platinum Rule Behavioral Style Assessment, I have been able to review how each Style has their own strengths and weaknesses, and how to create a professional performance plan on helping each team member to be successful in their organization. The assessment has allowed me to have a better understanding of different behavioral characteristics as well as my own personal traits, strengths, and weakness. This will give each of us the ability to balance, adapt, and grow in our roles within our organizations.

9-1 The planning budget is prepared for the planned level of activity. It is static because it is not adjusted even if the level of activity subsequently changes.

9-2 A flexible budget can be adjusted to reflect any level of activity—including the actual level of activity. By contrast, a static planning budget is prepared for a single level of activity and is not subsequently adjusted. 9-3 Actual results can differ from the budget for many reasons. Very broadly speaking, the differences are usually due to a change in the level of activity, changes in prices, and changes in how effectively resources are managed.

9-4 As noted in 9-3 above, a difference between the budget and actual results can be due to many factors. Most importantly, the level of activity can have a very big impact on costs. From a manager’s perspective, a variance that is due to a change in activity is very different from a variance that is due to changes in prices and changes in how effectively resources are managed. A variance of the first kind requires very different actions from a variance of the second kind. Consequently, these two kinds of variances should be clearly separated from each other. When the budget is directly compared to the actual results, these two kinds of variances are lumped together.

9-5 An activity variance is the difference between a revenue or cost item in the static planning budget and the same item in the flexible budget. An activity variance is due solely to the difference in the level of activity assumed in the planning budget and the actual level of activity used in the flexible budget. Caution should be exercised in interpreting an activity variance. The “favorable” and “unfavorable” labels are perhaps misleading for activity variances that involve costs. A “favorable” activity variance for a cost occurs because the cost has some variable component and the actual level of activity is less than the planned level of activity. An “unfavorable” activity variance for a cost occurs because the cost has some variable component and the actual level of activity is greater than the planned level of activity.

9-6 A revenue variance is the difference between how much the revenue should have been, given the actual level of activity, and the actual revenue for the period. A revenue variance is easy to interpret. A favorable revenue variance occurs because the revenue is greater than expected for the actual level of activity. An unfavorable revenue variance occurs because the revenue is less than expected for the actual level of activity.

9-7 A spending variance is the difference between how much a cost should have been, given the actual level of activity, and the actual amount of the cost. Like the revenue variance, the interpretation of a spending variance is straight-forward. A favorable spending variance occurs because the cost is lower than expected for the actual level of activity. An unfavorable spending variance occurs because the cost is higher than expected for the actual level of activity.

9-8 In a flexible budget performance report, the static planning budget is not directly compared to actual results. The flexible budget is interposed between the static planning budget and actual results. The differences between the static planning budget and the flexible budget are activity variances. The differences between the flexible budget and the actual results are the revenue and spending variances. The flexible budget performance report cleanly separates the

To have ability in a successful performance some would say in necessary, however it would also be believed to be the same when it comes to motivation. Both differ vastly but I do believe that both are needed and are also some of the main characteristics that top level performers of any sport/activity have inside them. The ability is closely linked with technique and skill as the three together can form a high standard of performance. In order to compete, or, perform an activity, we must firstly have the ability to do so.

Abilities are generally seen as innate, this is when you are born with them or they have developed in the early stages of life. They are also sometimes looked upon as building blocks or movement vocabulary and it is true that we will never be able to develop skill fully. There are many examples of ability required in many different areas of performing, in sport they range from: hand eye co-ordination, flexibility, speed etc. Without these abilities certain skills would not be performed to a high enough standard to compete successfully, i.

e. a serve in tennis. Without innate it has been said, you will never be great at performing. Motivation can influence our decisions, our learning and our performance. We would not be able to perform to our best level if we were in a negative psychological state of mind, some say mind over matter, but it has been proven in most activities this is not the case. Motivation is basically the drive to strive. Motivation can help people pull of the toughest of skills to a successful level and we can be motivated in many different ways.

These ways can be intrinsic or extrinsic. Intrinsic motivations are those that come from within the performer themselves. They are factors such as personal satisfaction or enjoyment. It ahs been suggested that performers who are in intrinsically motivated are more likely to continue participating than those who are not. Extrinsic motivators are factors from outside the performer. They give the individual an extrinsic reward such as money, trophies or recognition.

It has also been suggested that extrinsic motivation is of benefit at first and can drive individuals to work hard and participate initially, but in the long term extrinsic motivation is not enough on its own. There must also be elements of intrinsic motivation. An example of this can be often seen in sport i. e. football. If football players were solely motivated by money many of them would not play well after receiving their high wages. It can also be seen in boxers who do not train as hard once they have reached their goals and are set for life.

The need to be motivated and eager is often taken for granted. Whilst on my sports leadership course, in which I have been teaching 12/13 year old girls how to play football, I have seen both lack of ability and lack of motivation and vice versa. It is clear to me that one can be used when the other is not present. Many of the girls I have taught have lacked in technique skill and sometimes speed, all are specifications of ability. It has been possible to my understanding for these girls to still take part to a standard of play that is suitable for them to be an asset to their team.

Motivation wasn’t exactly top of the bill when I first took the class as many of the girls didn’t really like football, but I found its important to not do too much too fast and that positive feedback is essential. If they hear they have done something good it makes them want to achieve more from the lesson and with this their abilities can improve as they now have the desire to succeed. Motivation is the drive within them and with that drive they have the will to want to learn and want to be able to up the standard of play.

Motivation can also open new doors as they are more willing to listen and take in information, even some of the best performers need to listen to advice but many feel with them being so much better than others there is no need to up their game any more. I improved the girls movement ability by getting the girls into a circle and one girl in the middle. The girl in the middle had to get the ball of the others while the others on the outer circle passed it to each other. With the middle girl chasing down the passes I instructed it would be easier to pass round the middle girl if they spread out and moved into spaces.

I then took this practice into a game situation and the effect was quite dramatic. Motivation was improved when I gave rewards to the best groups, as they now had a desire to win, after a while the need for rewards was little as the girls were now enjoying the sport much more and were keen to excel. Simple practices like these can help an overall game. When I used to play tennis I started off not being able to control the ball at speed. Then I was taught to not hit the ball as hard as I could over the net but to pick a spot and aim for that spot. I practiced repeatedly hitting a ball against a wall.

I would aim for the same spot and every time I got it at that spot ten times I would move back 5 paces. This gave me better accuracy and hand/eye co-ordination when I went into a game situation. To choose which is more important in a successful performance out of ability and motivation is difficult of not impossible. Both are needed to achieve a high standard of performance but I don’t feel that one is of greater need than the other. Without motivation we wouldn’t have the drive to want to succeed and without the basic abilities we wouldn’t really have the motivation.

The intention of this paragraph is to critically analyze whether Telstar Corp should adopt a trait based, result based or a behavior based performance system and this paragraph further discusses their respective advantages and disadvantages. The management at Telstar Corp has adopted a result and behavior based performance appraisal strategy for identifying the achievements of pre-determined performance targets aligned to its reward strategy.

‘Telstar Corp’ adopts a result, competency based performance system particularly for senior managers and for lower level employees it uses both result and behavior based performance system. Di Cieri (2005) proposes that people will be more motivated if their remuneration is linked in some way to their performance provided that the parameters are clearly set out and participating individuals understand how they can clearly influence the result, performance related pay can at times be an effective way to communicate and emphasize the message that everyone can contribute to the greater good of the company.

Ashton (1996) claims that result based remuneration strategy if applied in a company has the power to change the performance of the company because it brings a lot of motivation and thereby commitment in the employees of that company. Whereas, Kohn (2000) argues that result based method can be bad for business because firstly it encourages people to focus narrowly on a task, to do it as quickly as possible, and to take fewer risks, secondly extrinsic rewards can erode intrinsic interest and thirdly people come to see them selves as being controlled by a reward.

Di Cieri (2005) claims that behavior based method are one which focuses on the employee’s competencies, skills, actions and behaviors in performing a job. This is where performance measurement and appraisal is essential. Result based performance focuses more on assessing what employees do (how they perform) and achieve in their job. Poels (1997) argues that the competencies an employee demonstrates and the potential that he or she possesses becomes more and more important and consequently deserves more reward then a person giving no results.

Whereas Ashton (1996) argues that the disadvantages of result based method are; it puts extra pressure on employees, on their work load, which at times effects their personal or family life, in quest of achieving targets sometimes they might end up in depression, there is also the fear of loosing the job in the minds of employees which makes them feel uneasy most of the time not only at work but some of them tend to take work pressure home which in turn effects their family lives.

De Cieri (2005) argues that peer group pressure to qualify with their high achieving colleagues is also very strong within a commercial environment thereby at times too much competition between employees can take form of personal rivalry which is really bad for the company. The management at ‘Telstar Corp’ adopts a diverse remuneration strategy for its employees and managers.

For managers it is solely based on results but for employees it is both behavior and result based. Telstar Corp pays high packages to executives and senior management so that they can give their best performance as they are the reason behind the results generated by the company, their combined efforts help in the achievement of pre determined performance goals.

It is the intention of this paragraph to critically analyze whether short-term monetary reward strategies such as one-time commissions, cash bonuses, loyalty bonuses, merchandises, retail vouchers ; services, vacations ; holidays, bonuses ; gifts, kids school fees and insurance fees should be equitably accessed by managers and employees within Telstar Corp in the achievement of pre determined performance goals. Kepner (2001) suggests that the primary purpose of short term monetary incentives is to reward employees for their excellent job performance.

Locke (2004) found that short term monetary incentives increased production output by a median of 30% more than any other motivational device studied. He further argues that they are worth the effort and the fact that they can motivate employees to stretch themselves. Millard (2006) argues that performance or merit based bonuses are not gift bonuses which are handed out firm wide, they are purely tied to performance, this may be a reward for client development or simply working longer hours.

White (2006) argues that Bonuses can help employers manage costs and are very effective around creating focus on business objectives. In contrast De Cieri (2005) criticizes that employees often do not bother putting in the extra effort when they feel the bonus is tied to variables beyond their control. Grote (2002) claims that vouchers are so popular in incentive campaigns compared to cash or merchandise as they are cheaper, virtually instant (speed of issue), multi denominational and have all the flexibility of cash with none of the messiness associated with delivering cash or other merchandise.

Kohn (1993) argues that monetary incentives encourage compliance rather than risk-taking because most rewards are based only on performance. As a result, associates are discouraged from being creative in the workplace. He further argues that monetary incentives may be used to circumvent problems in the workplace. For example, incentives to boost sales can be used to compensate for poor management. Employers also may use monetary incentives as an extrinsic rather than an intrinsic motivator.

In other words, employees are driven to do things just for the monetary reward versus doing something because it is the right thing to do. This can disrupt or terminate good relationships between employees because they are transformed from co-workers to competitors, which can quickly disrupt the workplace environment. Similarly Eagan (2005) argues that when employees lust after money or when they are just greedy in their pursuit of bonuses, it can lead to inappropriate behavior.

She also argues that monetary incentives do such a good job of motivating employees that they do whatever they get paid for and nothing else. Some incentive plans reward output volume at the expense of quality or customer service. She further argues that if rewards aren’t relevant to employees, they don’t buy in and don’t behave the way the company desires. Rewards must match the person; this is why it’s so important for the management to understand their employees and what’s meaningful to an individual. She concludes that in the end it all comes back to really getting to know the employees.

Horsley (2005) proposes it is in the nature of any organization that there will always be some element of rivalry leading to fights, jealousy and job hopping when it comes to carving up the rewards, he further argues that devious and dishonest behavior in the pursuit of bonuses is more likely to arise when the system is administered in a way that is not clear or precise. Too often, companies are disorganized or scattershot in their approach, with inconsistent or hard-to-measure results hence companies run the risk of undermining their own investment.

Rewards must be appropriately targeted in order to mean anything. According to a Maritz Research poll of 1,002 employees conducted in October 2005, only 27 % of those who want to be recognized with gift cards, merchandise or trips actually receive that form of award and only 40 % craving written praise receive it. Godar (2005) claims that part of the mismatch may be because of the growing diversity in the workplace, she further claims that it’s the generational differences and also the differences in the workforce’s age group(20-28, 28-35, 35-45), lifestyle and life stage(single, married, with kids).

Maritz advises employers to ask new employees how they prefer to be recognized or rewarded. Ignoring valued employees is too big a risk to take. Not only will retention suffer, but the attitude of employees who don’t feel valued and appreciated will trickle down to customers who in turn affect the company’s goals and objectives. Coulter (2004) suggests that recognition if not rewards must be timely, it must be immediate. It could take up to 28 days from the time an employee was nominated for an award to when he or she received it, which could be a long wait.

Fay (2001) proposes that the advantages of using short term monetary remuneration strategies are traditionally; these have helped maintain a positive motivational environment for employees as it is a commonly held view that monetary incentives drive performance, it motivates employees to work hard because they know that if they achieve good results the management will reward them in the short term instantly. It also helps management in differentiating between the most efficient employees and the rest which helps during deciding whom to promote.

Further the management can judge the caliber and mentality of every employee by seeing the impact of the above incentives on employee performance. Whereas Fisher (2000) argues that the disadvantages of using short term monetary remuneration strategies are, they run the risk of creating some serious internal equity issues among employees, at times it makes employees lazy when there are no bonuses or commissions. Secondly, if the rates of bonuses are not fixed then it can be a problem.

Thirdly, at times the actual performance of employees turns into greed of more money and further in a team based environment it may eliminate the feeling of team sprit because every one works for their bonuses and commissions. At ‘Telstar Corp’ the management has launched a ‘Pride@Telstar Corp’ program which is web-based; Telstar Corp’s new program has four elements: formal appreciation, instant appreciation, service awards and cash awards.

Formal appreciation is based on activity and behaviour, both managers and employees can nominate employees and teams for exceptional performance. Awards are delivered as points redeemable online for various types of vacations ; holidays while the company covers all relevant taxes. The number of vacation days given to any particular employee normally increases over time, there is usually a short waiting period of 3-6 months during which employees are ineligible for vacations, but for competitive reasons there is often no waiting period for management employees.

Instant appreciation, involves small items like mugs, bags and pens or merchandises, retail vouchers ; services that managers have on hand and can give to employees at any time to reward certain specific behaviour, event or accomplishment. This program further includes formal bonuses ; gifts, service awards and cash awards such as one-time commissions, cash bonuses, loyalty bonuses, as well as payment of kids’ school fees and insurance fees which can all be done online using the intranet at work or via the internet from home.

It also allows staff to self-select from a range of benefits, e. g. staffs choose between health insurance and a gym membership. This program has already helped to support thousands of daily interactions with employees and managers. At Telstar the level and composition of short term monetary incentives are equal with between the employees and the managers for those who have achieved a predetermined performance target.

Objectivity is the foundation of an effective performance appraisal system.

You want a system in which your top performers are recognized and then given opportunities to advance their skills while low performers are given the advice and motivation they need to improve their performance. Unfortunately, this isn’t always the case.

A found that nine in 10 HR leaders don’t believe annual performance reviews result in accurate information.

Imagine you have a talented employee that gives 110 percent but finds their performance evaluation doesn’t reflect all their hard work. Eventually, their disillusionment will turn into disengagement. Then they’ll begin to look for another job, where they feel their work will be appreciated. The reported that the No. 1 reason Americans leave their job is because they don’t feel appreciated.

Whether we realize it or not, our brain has a natural tendency to sort information into groups in order to process it easier. This can lead us to make snap judgments about a person without even realizing it. Some psychologists call this the . They found that on average 61 percent of a rating is based on the judgments of the rater rather than the ratee. When one person’s unconscious bias is applied to performance appraisals, it can lead to inaccuracy, favoritism and even , based on their age, sex, race or sexual orientation.

Fortunately, there are ways to mitigate the effects of unconscious bias. Here are four common types of bias that affect performance appraisals and how to overcome them.

1. Central tendency bias.

This is one of the most common forms of bias that can impact your performance reviews. Whenever you have a five or three point scale, raters have a tendency to lump the majority of their employees in the middle. This happens most often when managers have a low performer and just can’t bring themselves to give them a low score, fearing they’ll damage their employee’s confidence. This is actually worse for low performers, as it doesn’t clue them in to the fact that they need to improve, or give them any valuable information about what they need to focus on.

How to overcome it

In the past, to overcome this natural tendency tactics, such as forced rankings, were used to push managers to rank each of their employees against each other. But as we have seen, forced or . Ranking employees against each other creates high competition and animosity within teams. Rather than working together, teams begin to work against each other to receive a higher score.

To overcome central tendency bias, base performance appraisals on specific competencies.

Everyone has their strengths and weaknesses. Maybe one of your employees is not a strong public speaker, but they’re a good writer. Rather than focusing on public speaking, push them to improve their writing skills, and give them assignments that allow them to build this strength.

The most valuable information an employee can get from the review process is . Encourage managers to really highlight both in each employee’s review so that afterwards they can create an effective development plan.

Related: 

2. Recency and spillover bias.

Our ability to recall an employee’s performance can also have a major impact on their results. Accurately remembering how each employee did throughout the year is almost impossible. It can be especially difficult to recall projects that were completed during the first and second quarter.

Recency bias occurs when managers rate an employee based on their most recent performance – forgetting about the entire picture. Alternatively, spillover bias occurs when managers continue to rate an employee based on past performance, failing to take into account recent improvements.

Forgetfulness on the part of the rater can actually lead an employee to be over or under valued for their work. This is especially demotivating for employees, who show improvement later in the year but continue to be rated based on their previous performance.

How to overcome it

Ditch the annual review. It’s much easier for people to recall the performance of an employee over the course of three months than over the course of a year. Consider implementing quarterly or bi-annual reviews. This doesn’t have to take up more time. There are that can help you set up reviews quickly and more frequently.

3. Negativity bias.

With more frequent reviews, you also want to make sure that your employees are getting the most out of the information they receive. When employees are used to getting feedback, they’re more likely to know how to analyze and use it effectively – although some people have to learn this skill. People have a natural bias towards negative situations. This is a natural defense mechanism that helps us remember and avoid dangerous situations.

Negativity bias can also get in the way of our professional development. Instead of learning from constructive feedback, it can instead induce fear or anger.

How to overcome it

Help your employees develop an open mindset to feedback by giving it continuously throughout the year and coaching them on how they can analyze the information they receive. , and stay on top of goals.

Related: 

4. Halo Effect, confirmatory and similarity bias.

These types of bias are based on our perceptions of others. The halo effect occurs when managers have an overly positive view of a particular employee. This can impact the objectivity of reviews, with managers consistently giving them high ratings and failing to recognize areas for improvement.

Whether positive or negative, we also have a natural tendency to confirm our pre-conceived beliefs about people in the way we interpret or recall performance, known as confirmatory bias.

For example, a manager may have a preconception that their male report is more assertive. This could cause them to more easily recall instances in which they asserted their position during a meeting. On the other hand, they may perceive their female report to be less assertive, predisposing them to forget when they suggested an effective strategy or were successful in a tough negotiation.

The halo effect is often a consequence of people having a similarity or affinity bias for certain types of people. We naturally tend to favor and trust people who are similar to us. Whether it’s people who also have a penchant for golf or people, who remind us of a younger version of ourselves, favoritism that results from a similarity bias can give certain employees an unfair advantage over others. This can impact a team to the point where those employees may receive more coaching, better reviews and, as a result, more opportunities for advancement.

Related: 

How to overcome it

Basing performance on one person’s perception makes biased reviews much more likely. Instead, 360-degree reviews allow each employee’s performance to be assessed from multiple sources, including managers, colleagues and reports. Reviews based on multiple perspectives can help to factor bias out of the equation.

Introduction

Whilst further and higher education institutions in the United Kingdom are generally considered as having the primary purpose of educational output, it is generally seen in the market place that these institutions are run in a similar fashion to most other corporate institutions. It is therefore not surprising that strategies of strategic procurement in these institutions are similar to these traditional corporate institutions. Further and Higher Education Institutions (FHEIs) face a unique challenge in terms of sustainability goals as they are highly valued in the market in terms of national education goals, yet face significant challenges with regards to budget concerns as relying on government funding, research incomes, tuition income and fundraising initiatives as combined sources of incomes. With austerity measures in the current economy seeing further restraints on these budgets, strategic procurement becomes arguably more important. FHEIs historically, as having a primary goal of educational output place a stronger emphasis on operational efficiency and as a result may neglect strategic processes which have an effect on long-term sustainability goals (Kotler & Murphy, 1981). The underlying assumption of this research proposes that FHEIs do not prioritize strategic procurement as a part of their corporate performance objectives and therefore are institutions that stand to benefit greatly from the implementation of effective strategic procurement measures. Simultaneously however, the need for strategic procurement measures ensuring sustainability and organizational effectiveness must meet the need for operational efficiency. As such, traditional theories of strategic procurement may have limited operation to these institutions. However, there is a lack of research into the applicability of these theories in this sector and the proposed research there aims to address this gap.

The research proposed aims to understand the potential benefits of strategic procurement that exist for FHEIs, as well as a set of criteria that can be used to measure this aspect of organizational efficiency within the sector taking into consideration the specific challenges and nuances of the sector itself. Specifically because of the high reliance on operational efficiency within these institutions, it is necessary to consider the non-financial benefits of strategic procurement, as well as the financial benefits.

Research Question & Objectives

The research question proposed hereby aims to determine the application of theories of strategic procurement in the further and higher education sectors in the United Kingdom with regards to potential benefits and corporate performance. In doing so, this research proposes the following specific objectives:

To determine the specific benefits of strategic procurement in the further and higher education sector in terms of corporate performance.
To determine a set of criteria for measuring the effectiveness of strategic procurement within this sector.
To determine the applicability of traditional theories of strategic procurement to Further and Higher Education Institutions.
Literature Review

Whilst there are a number of definitions that are offered for procurement, the following definition is offered for the purposes of the proposed research:

“Participation in the development of requirements and their specifications; managing value analysis activities; conducting supply market research; managing supplier negotiations; conducting traditional buying activities; administering purchase contracts; managing supplier quality; buying inbound transportation” (Dobler, 1990).

It is submitted that this definition is most relevant to FHEIs, because of the governmental purchasing element that is involved in these institutions by their very nature. FHEIs historically have needed to adapt their procurement strategies in a manner to maximize their resources. With 70% of the activities of a typical college of further and higher education consist of teaching and other business support activities, and only 30% made up of procurement (Quayle & Quayle, 2000), it is clear that there is a strong need to ensure that these procurement strategies are efficient and that these clearly maximize resources.

Strategic procurement generally consists of six core components, including supplier optimization, risk management, total quality methods (TQM), green purchasing, global sourcing and vendor development (Ukalkar, 2000). In assessing the potential benefits to FHEIs, one must consider the strategies used by these institutions in relation to these core components. The distinguishing feature of the proposed research however is in the application of these components to FHEIs, as arguably these theoretical concerns do not necessarily consider the size and type of organization involved in the evaluation.

Cox (1996) argues that there is a need for proactive strategic procurement management, rather than reactive management. The approach argues a link between competencies, relationships and asset specificity in order to procure a supply and value chain which reduces the costs of transactions and improves profitability. In this way therefore, the strategy must be one which is flexible and specific to the organizational needs of those institutions. To this end Chadwick (1995) argues that assessment of performance in this sphere can only be truly effective when the specific circumstances and environment of the organisation are considered. This measurement must be used with the means of improving performance and therefore lending itself to lean development of strategy rather than generic application of corporate strategies.

As a means of measuring institutional effectiveness of strategic procurement, Smith and Conway (1993) identified seven key characters of effective procurement. These are: a clear procurement strategy, effective management information and control systems, development of expertise, a role in corporate management, an entrepreneurial and proactive approach, co-ordination and focused efforts. Quayle and Quayle (2000) supplement this with an eight character, namely effective communication of the key success factors to all levels of the organization. This eight characteristic recognizes an identified weakness in procurement strategies as occurring when members are unaware of the total procurement picture (Wheatley, 1998).

These definitional elements will form the foundation of assessing the applicability of traditional theoretical components of strategic procurement to FHEIs considering the specific nuances of these organizations are unique in their position within the sector. In order to measure the effectiveness and potential benefits of these strategies for FHEIs, these theories will be examined as they apply to these types of institutions. In addition, the content of these characteristics will be explored in terms of traditional corporations to determine actual practical effectiveness in terms of financial and non-financial goals.

Data Collection & Analysis

Data collection in the proposed research will consider both primary and secondary information available as it relates to the topic. Primary information will be gathered about the state of FHEIs in the U.K with regards to publications by selected institutions as regards to financial and non-financial information, as well as that which is published by these institutions about their strategic procurement strategies. Primary information with regards to organizational goals of strategic procurement will also form the basis of the proposed research in order to determine the criteria for measuring the effectiveness of these strategies.

Data collection of secondary sources will be undertaken from a number of electronic sources, primarily from databases that consolidate the information relevant to the current topic. This will be drawn from sources such as such as Questia, Jstor, Emerald Insight, and Google Scholar. This will be used to supplement any other secondary resources that are available in libraries or published in scholaric literature. This literature will be used in order to form a theoretical comparison between the goals of these institutions in relation to their published strategy and on the basis of this comparison, recommendations for improvement of these strategies will be made.

The primary method of data analysis proposed by this research is one of secondary data analysis. Secondary data analysis can be defined as the analysis of data or information that was either gathered by someone else or for some other purpose than the one currently being considered, or often a combination of the two (Cnossen, 1997). If secondary research and data analysis is undertaken with care and diligence, it can provide a cost-effective way of gaining a broad understanding of research questions without having to undertake time consuming and often impractical methods of empirical data studies.

Conclusion

FHEIs are unique corporate institutions which face significant challenges in the market, because of the need for operational efficiency above effective procurement. However, because of the current economic climate and the ever increasing concerns over budgetary constraints of these institutions, the benefits of strategic procurement present attractive advantages. The nature of FHEIs make application of traditional theories of strategic procurement problematic as they may not consider the specific needs of these institutions and therefore the current research aims to explore the benefits that may result in the application of strategic procurement management, however specifically the application of traditional theories of strategic procurement. Through analysis of the published strategies of these institutions and comparative analysis with the accepted theories of strategic procurement, this research aims to develop a set of criteria for measuring the effective application of strategic procurement within FHEIs for maximum benefit within these institutions and in doing so, to add value to the current ambit of knowledge available with regards to strategic procurement within further and higher education institutions in the UK.

References

Chadwick, T. (1995) Strategic Supply Management. Butterworth Heinemann: Oxford.

Cnossen, C. (1997) Secondary Reserach: Learning Paper 7, School of Public Administration and Law, the Robert Gordon University, January 1997. [online] Available on: jura2.eee.rgu.ac.uk/dsk5/research/material/resmeth [Accessed 2 January 2013]

Cox, A. (1996) Relational competence and strategic procurement management. European Journal of Purchasing & Supply Management, 2 (1), pp. 57-70.

Dobler, D., Burt, D. and Lee, L. (1990) Purchasing and Materials Management. McGraw-Hill: New York, NY, pp. 100-15.

Kotler, P. and Murphy, P. (1981) Strategic Planning for Higher Education. The Journal of Higher Education, 52(5), pp. 470 – 489

Quayle, M. and Quayle, S. (2000) The impact of strategic procurement in the UK further and higher education sectors. International Journal of Public Sector Management, 13(3), pp. 260 – 284

Smith, R. and Conway, G. (1993) Organisation of Procurement in Government Departments and their Agencies. HM Treasury Consultancy and Inspection Services Division: London.

Ukalkar, S. (2000). Strategic procurement management for competitive advantage. New Delhi: Oxford University Press.

Wheatley, M. (1998) Strategic procurement: the route to big savings. Management Today, December, pp. 2-5.

Introduction

During the last two decades, the challenges of measuring performance in both the public and private sectors have been widely discussed (Behn, 2003; Carter et al., 1992; Hood, 2006; Johnson and Kaplan, 1987; Kaplan and Norton, 2004; Neely, 1999; Pollitt and Bouckaert, 2004; Smith, 1995). Financial measures based on numbers generated by the traditional financial accounting system, such as profits, have been found to be not sufficient and out of date in measuring organizational performance (Curtis, 1985). For example, during that period, within NHS (Sehested, 2002), operations could not be performed due to lack of funding; there was widespread dissatisfaction with public services generally and the government was trying to reduce spending. Accordingly, organizations have implemented a number of non-financial measures to control their costs and improve their goods and services (Kidwell 2002). Performance measurement has evolved from merely producing accounting-related to more comprehensive information that contains both financial and non-financial information (Wilson et al., 2003).

With the increasing pressures of citizens and legislation that demand more responsibility in spending of public revenues and transparency in reporting on the achieved results, governments are demonstrating growing interest in the measurement of performance (Micheli, 2008). However, it is not easy and problematic to effectively and efficiently evaluate the performance in the public sector.

This essay aims to discuss the problems of performance evaluation in the public sector and some prospective techniques developed to improve them. The first part will briefly illustrate the performance measurement in private sector. Then, in the follow part, the roles and challenges of performance measurement in public sector will be discussed. And finally, a conclusion will be drawn from what had been argued.

Performance measurement in private sector

In the private sector, such as the profit-oriented organization, the principle measure of successful performance is profit and the majority of performance measurement activity is still based on the financial statements. From these statements which mainly include income statements, balance sheets and cash flow statements, we can easily know what resources were purchased, how they were used and the cost of them in each business organization. The reason to use profit as an indicator to evaluate how well a company performs is probably because within a competitive market, the prices of goods and services can be easily and relevantly valued.

However, some companies are not operating within a competitive market, so the profit itself is not sufficient to evaluate the organizations’ performance. In addition, such financial measurements contribute only little or nothing in helping an organization to achieve its strategic goals (Euske et al., 1993; Ghalayini et al., 1997; Jagdev et al., 1997; Kaplan and Norton, 1992; Nanni et al., 1992; Neely, 1995). In response, Balanced Scorecard (BSC) was developed to overcome this limitation by Norton and Kaplan (1992) which is a strategic performance management tool that links performance to strategy using both financial and non-financial performance measures and generally used by managers to guide future competitive success (Kaplan and Norton, 1996).

The roles and challenges of performance measurement in public sector

Like the private sector, public sector organizations around the world face pressure to improve service quality; lower their costs; become more accountable, customer-focused and responsive to stakeholders’ needs. There is an argument that performance evaluation processes within the public sector organizations can be improved through using the performance measurement techniques of private sector (Broadbent and Guthrie, 1992; Olson et al., 1998; Hoque and Moll, 2001), such as cost-volume-profit analysis, standard costing, and return on capital employed. However, since most of public sector organizations aim to provide a service for the service users rather than earn a profit and services provided free at the point of delivery and financed by taxation, the revenue cannot be used as a ideal measure to evaluate how well each service be received by its customers. Therefore, the amount of profit traditionally used as a performance measure in profit-oriented organizations is not suitable for the public sector. Instead, this type of organizations typically publishes non-financial output measures. In addition, due to that the values of goods and services in public sector are more difficult to identify and measure than the one in private sector, how to efficiently and effectively evaluate the performance in the public sector becomes problematic.

Elements of performance measurement in definitive governments

Measures of performance used in the public sector performance evaluation process include three basic elements: inputs (the resources consumed by governments and primarily be measured by using costs and non-financial measures), outputs (direct results of program activities and can be measured by using non-financial measures), and outcomes (broad results of program activities and be evaluated mainly by qualitative assessments such as questionnaires and interviews). The non-financial inputs, outputs and outcomes in this evaluation process are hierarchical; the lowest-level measures (inputs) are easier to measure but of limited relevance to the goal, while the highest-level measures (outputs) are more relevant but difficult to measure, so less reliable. For example, as for a secondary school, number of teachers as the input which is easier to measure but is not directly relevant to the goal of school; while the quality of school as the outcome is difficult to measure but is more relevant to the school’s objective.

Since public sector organizations lack clear objectives, which make it become problematic to link the inputs to the outputs and outcomes (Johnsen, 2000). As a good and service provider, the public sector will be faced with the difficulties of quantifying their main performance measures such as customer satisfaction, and quality of service (Jackson, 1990); which also mainly rely on human resources who have discretion over their efforts and hence need consistent monitoring and directing towards the organization’s goals (Neely et al., 1995). Moreover, public sector organizations are led by elected officials who are voted into office and are accountable to their voting stakeholders. These stakeholders may not be the consumers or end users of public services, such as environmental protection, tax collectors, motor vehicle registration, and immigration services (Battle, 1994).

Economy, Effectiveness and Efficiency

Since there are some other factors affecting the performance of public sector, it is difficult to establish the relationships between financial inputs and non-financial outputs and outcomes. Audit Commission (1986) emphasized two key measures of performance: efficiency and effectiveness. Service efficiency was defined as the “provision of specified volume and quality of service with the lowest level of resources capable of meeting that specification”. It is measured by the ratio: output/input and used to link inputs (usually measured by monetary items) with non-financial outputs (measured by either monetary or non-monetary items). The greater the ratio, the more efficient the organization is. Effectiveness can be defined as “providing the right services to enable the local authority to implement its policies and objectives.” It is only concerned with outputs and outcomes, and say nothing about how much an organization spend to achieve a certain objective. Hence, effectiveness contributes little or nothing in improving the performance of organizations, mainly because when there is no restriction on the budget almost all objectives can be satisfied. There is also a third element – economy, although included in efficiency, but specifically emphasized in the context of purchases from outside, defined as “the lowest possible cost consistent with the specified quality and quantity.” It only concerns inputs but no consideration about the organization’s objectives. Thus, it is meaningless if they operate alone. Sometimes a program could be very efficient but not effective, for example, you could do a wrong thing very well. Besides, it is necessary to judge these three elements together because you don’t want to spend public money on the cheapest inputs but not achieve the goals after all.

Challenges of performance measurement in public sector

There are various challenges public sector organizations must face when they evaluate their performance. The first issue is about the measurement of costs, such as when the full costs are not relevant within the organization, how to evaluate the performance. Additionally, a big part of costs are not directly linked with outputs and outcomes, so it must involve some other factors that affect the costs. Secondly, the non-financial output measures are less reliable than the financial ones mainly because just limited non-financial information can be controlled. Thirdly, although the non-financial measures may be easy to count and should be reliably measured, it is very difficult to establish the relationships between inputs, outputs and outcomes due to that most of the performance is being measured only once, such as students cannot be educated twice for the same thing, and also the ultimate objective is not clear at all. Hence, it is so common that there will have some unintended outcomes. Fourthly, non-financial output measures are not comparable between services and just focus on very specific characteristics. However, as we all know, the more specific the focus, the more useful the measurement is. In addition, it is hard to trade-off between the demand of complex and simple performance measures. Each type of measures has its own advantages and disadvantages. Last but not least, non-financial measures just focus on what the organizations can control, and concern nothing about the links to inputs and the ability to be audited which required by accounting.

Problems with establishing the performance measurement techniques

In order establish performance evaluation techniques in the public sector, social indicators, program-planning-budgeting systems (PPBS) and cost-benefit (C/B) analyses are mainly used. However, there exist many problems with them. For the social indicators, the meaning of statistics may be questioned because of the method of data collection and also these indicators are too general to be applied in specific areas. The main problem with the remaining two techniques is the measurement of outcome. For PPBS, it cannot convert the organization’s objectives into measurable outcomes, while for C/B analysis, non-monetary outcomes are impossible to transform into monetary ones. Therefore, these three techniques are not that useful in the real world (James E, Sorensen; Hugh D. Grove, 1977).

Methods for improving performance evaluation techniques

The problems with performance evaluation techniques including social indicators, PPBS and (C/B) analyses mentioned above places emphasis on the role of outcome measures. To solve those problems, monetary inputs should be related to non-monetary outcomes for specific programs in a cost analytic perspective. Cost-analytic techniques include approaches ranging from cost accounting and cost-finding for programs, units of services and episodes to techniques which link resource consumption to nonmonetary outcomes (James E, Sorensen; Hugh D. Grove, 1977).

There are two types of cost-analytic techniques, cost-outcome and cost-effectiveness (Quade, 1967; Goldman, 1967; Levin, 1974; Fishman, 1974; Yates, 1975). Cost-outcome refers to the programmatic resources consumed to achieve a change in a relative measure of performance, while Cost-effectiveness is the comparison of cost-outcomes to identify the most beneficial outcome to cost of programs, modalities or treatment techniques. According to James E, Sorensen and Hugh D. Grove (1977), cost-effectiveness analysis can be carried out, based on cost-outcome information.

Assessing outcomes turns out to be an even more challenging than costing for nonprofit services, because non-monetary outcome assessment is currently employed in nonprofit performance evaluation process. In profit-oriented organizations, performance measurement is mainly based on the profit figures. But in public sector organizations, there is no such comprehensive measure and there are few good ways of estimating whether additional inputs will generate coordinate extra outputs. The basic problem is that there is no meaningful measure of output, and outcome evaluations are influenced by time patterns, multiple outcomes, effects among different populations, simple vs. complex evaluations and research design issues. As the conceptual approach and role of outcome assessment becomes clearer, improvements in the quality of the output side of the cost-outcome approach can be expected to meet external and internal service accountability demands.

Conclusion

While performance measurement in private sector is almost wholly limited to financial measures, public sector mainly uses non-financial measures to evaluate. However, there exist some problems when using this type of measures. The basic one is the non-monetary outputs measurement. How to efficiently and effectively establish the causal relationships between financial inputs and non-financial outputs and outcomes has been widely argued. Three types of performance evaluation techniques, which are social indicators, PPBS and (C/B) analysis, are found to have some problems in outcome measurements. Cost-analytic techniques are developed by using cost-outcome and cost-effectiveness methods, to solve these problems and link the monetary inputs to non-monetary outputs and outcomes. However, the difficulties in the interpretation of cost-effectiveness measures cannot be underestimated and it is still not easy to use them in the real world.

Reference

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