Theories of performance management


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Theories of performance management

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Theories of performance management

  1. 1. Theories of performance managementBusiness performance is probably one of the must widespread dependent variable used byscholars, while at the same time its remains one of the most vague variables (Rogers andWright, 1998). In order to minimize the level of ambiguity regarding the construction anddefinition of business performance, as well as to suggest for performance measurementalternatives in a way to provide with the most accurate and effective measurement, bothfor small business and large business, I present a series of articles focusing on seminalpapers discussing the issue of performance measurement and a literature review ofstudies using business performance as dependent variable.The first article presents a discussion on organization theory by Murphy, Trailer and Hill(1996), which argue that much of the research on performance has come fromorganization theory and strategic management. The view taken by Venkatraman andRamanujam (1986) in their paper was that business performance, which reflects theperspective of strategic management, is a subset of the overall concept of organizationaleffectiveness.Murphy et al., (1996) argue that in organization theory, three fundamental theoreticalapproaches to measuring organizational effectiveness have evolved: The goal-basedapproach - suggests that an organization be evaluated by the goals that it sets for itselfEtzioni (1964). However, organizations have varied and sometimes contradictory goals,making cross-firm comparisons difficult. Reinforcement for the notion that organizationare varied in various aspects is that scholars often restricted their study sample to definiteindustries in order to control the disparities between the various industries with respect toperformance and the firms profitability (Beard and Dess, 1981; Miller and Tolouse,1986). The systems approach - this approach partially compensates for the weakness ofthe goal-based approach by considering the simultaneous achievement of multiple,generic performance aspects (Georgopolous and Tannenbaum, 1957; Yuchtman andSeashore, 1967; Steers, 1975). Both the goal and system approaches fail to adequatelyaccount for differences between stakeholder groups perspectives on performance. Themultiple constituency approach - this approach factors in these differences in perspectivesand examines the extant to which the agenda of various stakeholders groups are satisfied(Thompson, 1967; Pennings and Goodman, 1977; Pfeffer and Salancik, 1978; Connolly,Conlon and Deutsch, 1980).Venkatraman and Ramanujam (1986), which discuss organizational performancemeasurement in terms of three hierarchically construct (i.e., organizational effectiveness,operational performance, financial performance) argue that these three organizationtheoretic perspectives are reflecting the writings on organizational effectivenessconstruct. The coming articles discuss about the other two constructs - operationalperformance and financial performance. : Over 200 ebooks, templates, forms forperformance appraisal.