A Systems Look at Organizational Performance
A Five-Step Process to Develop a Holistic Perspective
Oct 25, 2009
A systems look at organizational performance measurement has become one of the most important management tools for continuous improvement effort available to top managers today. This tool provides feedback and responses to the questions regarding how well the organization is performing, whether it has met its stated objectives, and how much it has improved. The measurements this system produces play a vital role in providing insight to the decision-makers about the effectiveness of any management interventions.
A Five-Step Process to Develop a Holistic Perspective
The successful development of this systems perspective can be described as this five-step process.
- Prepare the top management team to plan. Here they will consider the mission, vision, values, current performance levels, and any past initiatives or improvement interventions.
- Develop the goals and objectives.
- Complete the planning and Implementation with consideration to problem solving and the structure of the organization.
- Determine the specifics of the performance improvement measurement component.
- Define the accountability mechanism with consideration describing the timing and content of the regular review sessions and the rewards and recognition policies that will apply.
Since this process if referring to the top management, a common thread throughout this time is management visibility and leadership by example where the top management is modeling the behavior they are seeking to establish throughout the organization.
A Systems Look at Organizational Performance
This management system consists of three basic parts. For each component of the organization they are the manager, the area of responsibility that manager is currently managing, and the information system and tools for the data-to-information conversion available to him or her.
These combine to produce three sets of outputs. These outputs are the decisions and actions, the measurements and data, and the resulting information as well as how that information is portrayed and perceived by top management in regard to organizational performance.
The key to a robust design of this organizational performance measurement process lies in its alignment with other two other very important elements. These are the organization’s strategy and its rewards and compensation policy. This is a crucial consideration as this measurement process should be revised whenever there is a change in the strategy or a shift in the policy as to rewards and recognition.
Five Steps to Implementing a Systems Management Approach
This process can be implemented in five orderly steps. They are:
- Do the Pre-planning
- Develop and Specify the Key Results Areas
- Develop the Measurements that will be used
- Review and do a final audit of these developed measures
- Start Collecting the Data
Once this systems view of performance measurement is adopted, the organization can be better assured that it has curtailed some of the tendencies to have good performance and the resulting rewards for a part of it detract from the performance of other parts and the business as a whole.
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