Performance Management - Herman Augnis

Part I: Strategic and General Considerations___________________________________________________
Chapter 3 - Performance Management and Strategic Planning
Learning Objectives
3.1 Define strategic planning and its overall goal.
3.2 Describe the various specific purposes of a strategic plan.
3.3 Explain why the usefulness of a performance management system relies to a
large degree on its relationship with the organization’s and unit’s strategic plans.
3.4 Understand how to create an organization’s strategic plan including an
environmental analysis resulting in a mission statement, vision statement, goals,
and strategies.
3.5 Conduct an environmental analysis that includes a consideration of both internal
(strengths and weaknesses) and external (opportunities and threats) trends.
3.6 Understand how a gap analysis resulting from a consideration of internal and
external trends dictates an organization’s mission.
3.7 Define the concept of a mission statement and describe the necessary components
of a good mission statement.
3.8 Define the concept of a vision statement and understand its relationship to the
mission statement.
3.9 Describe the basic components of a good vision statement.
3.10 Create organization- and unit-level mission and vision statements.
3.11 Understand the relationship between mission and vision statements, goals, and
strategies.
3.12 Understand the relationship between an organization’s vision, mission, goals,
and strategies, and each of its divisions’/units’ vision, mission, goals, and
strategies.
3.13 Understand the relationship between a unit’s vision, mission, goals, and
strategies and individual job descriptions.
3.14 Explain why job descriptions must be linked to the organization’s and unit’s
strategic plans.
3.15 Understand how a strategic plan determines various choices regarding
performance management system design.
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3.16 Explain why a consideration of strategic issues is a building block for creating
support for a performance management system.
Chapter Outline
Performance Management and Strategic Planning
Overview
1. Definition and Purposes of Strategic Planning
2. Process of Linking Performance Management to the Strategic Plan
– Strategic Planning
– Developing Strategic Plans at the Unit Level
– Job Descriptions
– Individual and Team Performance
3. Building Support
• Definition
o Process
o Describes organization’s destination
o Assesses barriers
o Selects approaches for moving forward
• Goal
o Allocate resources
 to provide organization
 for competitive advantage
• Purposes
o Helps define the organization’s identity
o Helps organizations prepare for the future
o Enhances ability to adapt to environmental change
o Provides focus and allows for better allocation of resources
o Produces an organizational culture of cooperation
o Allows for the consideration of new options and opportunities
o Provides employees with information to direct daily activities
• Strategic Planning for the Organization
• Developing Strategic Plans at the Unit Level
• Job Descriptions
• Individual and Team Performance
What was Key Bank of Utah’s experience with this process?
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Chapter 3
According to the study of 338 international organizations, what kinds of
organizations are most likely to have Performance Management provide significant
benefit to the strategic plan?
Strategic Planning: Overview
A. Environmental Analysis
B. Mission
C. Vision
D. Goals
E. Strategies
A. Environmental Analysis
Identifies external and internal trends
• To understand broad industry issues
• To make decisions using “big picture” context
How might a gap in service prompt a business to compete in a market?
Compare Frontier Airline’s opportunities in 1994 with those of 2004. . . What
internal and external issues did you consider?
External trends
• Opportunities
-- Environmental characteristics that can help the organization succeed
• Threats
-- Environmental characteristics that can prevent the organization from
being successful
• Some factors to consider
– Economic
– Political/legal
– Social
– Technological
– Competitors
– Customers
– Suppliers
Consider an organization you have worked for--where does your organization
stand in terms of these factors?
Internal trends
• Strengths
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– Internal characteristics that the organization can use for its advantage
• Weaknesses
– Internal characteristics that can hinder the success of the organization
• Some factors to consider
– Organizational structure
– Organizational culture
– Politics
– Processes
– Size
Consider an organization you have worked for--where does your organization
stand in terms of these factors?
Environmental Analysis includes conducting a gap analysis, which analyzes
– External environment (opportunities and threats)
vis-à-vis
– Internal environment (strengths and weaknesses)
Gap analysis determines:
– Opportunity + Strength = Leverage
– Opportunity + Weakness = Constraint
– Threat + Strength = Vulnerability
– Threat + Weakness = Problem
How has IBM’s performance changed since the 1980s as the company learned
to use gap analysis?
Consider a company you have worked for--identify a leverage and a problem--
what happened?
Environmental and gap analyses provide information for organizations to decide:
• Who they are
• What they do
B. Mission
A good mission statement answers:
• Why does the organization exist?
• What is the scope of the organization’s activities?
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Chapter 3
• Who are the customers served?
• What are the products or services offered?
What should go into a mission statement for the Coca-Cola Company?
The mission statement contains information on the organization’s
• Basic product/service to be offered
• Primary market/customer groups
• Unique benefits and advantages of product/services
• Technology to be used
• Concern for survival through growth and profitability
The mission statement may contain information on the organization’s
• Values and beliefs
• Managerial philosophy
• Desired public image
• Self-concept of business adopted by
-- Employees
-- Stockholders
C. Vision
• Statement of future aspirations
• Focuses attention on what is important (eliminates unproductive activities)
• Provides context for evaluating
– Opportunities
– Threats
How do the vision statements for Rayovac and Greif differ in their
approaches?
A good vision statement is:
– Brief
– Verifiable
– Bound by a timeline
– Current
– Focused
– Understandable
– Inspiring
– A stretch
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Do you think the new Microsoft vision is a stretch? How/why?
D. Goals
Purpose of setting goals:
• Formalize expected 5+ years achievements
• Provide source of motivation
• Provide tangible targets to strive for
• Provide basis for good decisions
• Provide basis for performance measurement
How do the Harley-Davidson, Inc. goals fit this model? Or not?
E. Strategies
• Create strategies or game plans or “how to” procedures
• Address issues surrounding:
– Growth
– Survival
– Turnaround
– Stability
– Innovation
– Leadership
How the HR Function contributes:
• Communicate knowledge of strategic plan
• Provide knowledge of KSAs needed for strategy implementation
• Propose reward systems
Developing Strategic Plans at the Unit Level
• Organization
-- Mission statement
-- Vision statement
-- Goals
-- Strategies
Must clearly align with and be congruent with
• Every unit’s
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-- Mission statement
-- Vision statement
-- Goals
-- Strategies
Is the Microsoft Training and Education Unit mission statement congruent with
the overall Microsoft mission statement? How?
Consider the mission statement for the Norfolk State University School of
Business. How does it align with NSU’s mission statement?
Alignment of Strategic Plan with Performance (see figure in slides)
Job Descriptions
• Tasks and KSAs are congruent with organization and unit strategic plans
• Activities described support mission and vision of organization and unit
How could the job description for Trailer Truck Driver be improved to link
with organization and unit strategic plans?
How does the job description for the Training and Education Performance
Solutions Group Manager at Microsoft align with its organization and unit
strategic plans?
Individual and Team Performance
Organization and unit mission, vision, goals lead to
• Performance management system, which
– Motivates employees to
• Display behaviors aligned with mission, vision, goals
• Produce results to support mission, vision, goals
– Aligns development plans with organization priorities
Strategic Plan leads to some Choices in PM System Design
• Criteria (Behavior vs. Results)
• Participation (Low vs. High)
• Temporal Dimension (Short-Term vs. Long-Term)
• Level of Criteria (Individual vs. Team/Group)
• System Orientation (Developmental vs. Administrative)
• Rewards (Pay for Performance vs. Tenure/Position)
3. Building Support
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Answering “What’s In It for Me?”
• Top Management
– Help carry out vision
• All levels
– Involvement
– Participation (voice feedback and concerns)
– Understanding of organizational vision and goals
What role did good communication play in launching the revamped PM system
at Bankers Life and Casualty?
Performance Management and Strategic Planning: Summary and Review
– Strategic Planning
– Developing Strategic Plans at the Unit Level
– Job Descriptions
– Individual and Team Performance
3. Building Support
Review Learning Objectives
Worked Solutions for End-of-Chapter Cases
Case Study 3.1: Evaluating Vision and Mission Statements at Harley-Davidson
1. How many of the eight characteristics of an ideal mission statement are present in
Harley-Davidson’s mission statement? (see table below)
(Suggested points: 2, [3.7])
2. How many of the eight characteristics of an ideal vision statement are present in
Harley-Davidson’s vision statement? (see table below)
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Chapter 3
3. Given the purposes that a mission statement and a vision statement are ideally
serving, compare the mission and vision statements of Harley-Davidson based on
whether they are achieving their respective objectives. Do they both serve their
respective purposes? Collectively, are they useful tools to link organizational
priorities with individual and team performance?
(Suggested points: 5, .3[3.7], .4[3.8], .3[3.9])
Answers:
Overall, the mission statement serves its purpose of summarizing the company’s most
important reason for existence. However, it fails to identify the unique benefits,
features, and advantages of Harley motorcycles, the technology to be used in the
production of Harleys, the fundamental concern for survival through growth and
profitability of Harley-Davidson, and the managerial philosophy of Harley-Davidson.
Overall, the vision statement seems to give a statement of future aspirations for the
company, but it is phrased in present as opposed to future tense. Also, it is a little too
Y/N Characteristics
Mission statement
summarizes the organization’s
most important reason for its
existence
Y Basic product/service to be offered (does what)
Y
Primary markets or customer groups to be served (to
whom)
N
Unique benefits, features, and advantages of
products/services (with what benefits)
N Technology to be used in production or delivery
N
Fundamental concern for survival through growth and
profitability
N Managerial philosophy of the firm
Y Public image sought by organizations
Y
Self-concept of business adopted by employees and
stockholders
Y/N Characteristics
Vision statement
statement of future aspirations
N Briefness - brief so that employees can remember it
Y Verifiability - able to stand the reality test
N
Bound by a timeline - specifies a timeline for when the
various aspirations will be fulfilled
NS Currency - updated on an ongoing basis
Y
Focus - lists a few (3-4) aspects of the organization’s
performance that are important to future success
Y
Understandability - written in a clear and straightforward
manner so it is understood by all employees.
Y
Inspiring - makes employees feel good about their
organization’s direction and motivates them to help
achieve the vision
N Stretch - goal not easily attained
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long to remember, it does not give a timeline when the vision should be reached, and
the goal given is not a large stretch.
Yes, the mission and vision statements can be used to motivate employees toward
helping the organization meet its goals. While the mission and vision statements at
Harley-Davidson are broad, the goals of the organization are updated yearly and
clearly specify measurable goals for the specified year. The combination of the
mission statement, vision statement, and organizational goals will allow Harley-
Davidson to cascade these messages to each individual’s goals.
Case Study 3.2: Dilbert’s Mission Statement Generator
Individual answers will vary based on the generated statements. A critique of the
following statement is given below: “We strive to continually administrate timely
opportunities and enthusiastically utilize enterprise-wide technology while promoting
personal employee growth.”
Basic product/service to be offered (does what?): This statement does not tell us
what product or service the company offers.
Primary markets or customer groups to be served (to whom?): It does not tell us
who their customers are.
Unique benefits, features, and advantages of products/services (with what benefits?):
No mention of advantages of their product or service.
Technology to be used in production or delivery: It states “enterprise-wide”
technology is utilized, but this sounds like a buzzword, with no real explanation
of what it is.
Fundamental concern for survival through growth and profitability: Just emphasizes
the growth of their employees, not the organization as a whole.
Managerial philosophy of the firm: Just the emphasis on employees.
Public image sought by organizations: Not given.
Self-concept of business adopted by employees and stockholders: Not clear because
it is not even clear what the company does. (Suggested points: 5, [3.10])
1. Without clear guidance as to where the organization is going, it is hard for the
employees to know where to focus their efforts, what is important in the organization,
and how their individual contribution is tied into the organization meeting its goals.
2. This type of mission statement may do more harm than good, because it sends the
message that the organization does not know what it is doing or where it is going.
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Chapter 3
Case Study 3.3: Linking Individual with Unit and Organizational Priorities
Answers will vary based on the chosen statements and job descriptions. Consider the
following example from Federal Express, a family of companies that offer a global
network of specialized services--transportation, information, international trade support,
and supply chain services:
Job Description for Senior State and Local Affairs Representative: Monitors
legislative activity and analyzes developments and trends in state and local governments
for FedEx Government Affairs. Formulates and coordinates company responses to state
and local legislative initiatives. Develops and implements state and local government
relations programs.
Requirements: Licenses/Certifications - NONE
Field of Interest - Legal
Job Type - Full Time
Location(s) of Position - TN-MEMPHIS
Relevant Years Experience Required - 6-8 Years
Maximum Percent Travel Required - Up to 50%
Preferred Language - English
FedEx Mission Statement (www.fedex.com): FedEx Corporation will produce superior
financial returns for its shareowners by providing high value-added logistics,
transportation, and related information services through focused operating companies.
Customer service requirements will be met in the highest quality manner appropriate to
each market segment served. FedEx Corporation will strive to develop mutually
rewarding relationships with its employees, partners, and suppliers. Safety will be the
first consideration in all operations. Corporate activities will be conducted to the highest
ethical and professional standards.
FedEx Corporation (strategic leadership and financial reporting) Mission
Statement: To achieve the FedEx mission—producing superior financial returns while
meeting customer needs in the highest quality manner possible—the $23 billion FedEx
Corporation is focused on sustained, profitable growth and provides consolidated
financial reporting based on a fiscal year ending May 31.
Changes/additions to job description:
• Ability to analyze current changes in state and local governments in an effort
to identify new revenue opportunities.
• Ability to build high-quality relationships with stakeholders in the
community.
• Performs job in accordance with highest ethical standards.
• Knowledge of and experience operating in a customer-service oriented
company.
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• Knowledge of logistics, transportation, or information services required.
Additional Cases and Worked Solutions
Case Study: Homeowners Insurance Mutual Company
Homeowners Insurance Mutual Company (HIMCO) is a small insurance brokerage with
25 employees and about 5,000 clients. The company sells a variety of homeowners and
automobile insurance and manages the processing of claims against the insurance sold.
Some employees sell insurance (both in clients’ homes and in the office); some
employees process claims; some employees inspect insured damages; other employees
are responsible for supervision and/or clerical support of the business. With the
exception of the sales people, who receive a base pay and commissions on their sales, the
rest of the employees are paid based on their positions and seniority in the company.
The owner of HIMCO retired and sold the business to one of the managers, John
Thomas. John had a BA in business and had been in the insurance business for 10 years.
John wanted to make some changes in the business operations when he took over, so in
addition to his customer service and administrative duties, he took on the task of
implementing a performance management system. John scheduled several retreats during
which all of the employees of the agency recommended company goals and a business
plan. During the retreats, John led discussions and facilitated projects meant to result in
the basis for the company goals and business plan. After the retreats were held, he
published the following mission statement in the company brochures:
HIMCO serves the families of this state by making sure that their assets are
protected. We offer comprehensive and inexpensive Auto and Home insurance
packages, including preferred auto and homeowner rates. We continuously
search for the best rates and the best insurance policies to make certain that we
are the leader in providing comprehensive and affordable insurance to the
families of this state. Protection of our clients’ assets is our primary concern.
1. Critically evaluate the mission statement currently used for HIMCO.
2. Using your understanding of what makes a good mission statement, revise the
company mission statement as appropriate.
3. Develop a unit mission statement for the clerical unit using your understanding of
what an office support staff usually does for its organization. Explain how the
mission statement that you have developed answers the questions normally
answered by a mission statement and identify the key features of the mission
statement.
(Suggested points: 10, .5 [3.10], .5[3.12])
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Chapter 3
Answers:
1. In general, thorough mission statements include the following components:
(Respondents are free to invent appropriate answers as long as they include at
least the first five key features in their mission statements.)
 Basic product/service to be offered (does what?)
 Primary markets or customer groups to be served (to whom?)
 Unique benefits and advantages of products/services (with what benefits?)
 Technology to be used in production or delivery
 Fundamental concern for survival through growth and profitability
Mission statements typically also include information on the organization’s values
and beliefs (which can be added for extra credit), including:
• Managerial philosophy of the organization
• Public image sought by the organization
• Self-concept of business adopted by employees and stockholders
In sum, a mission statement defines why the organization exists, the scope of its
activities, the customers served, and the products and services offered. Mission
statements also include specific information such as the technology used in
production or delivery, and the unique benefits or advantages of the
organization’s products and services. Finally, a mission statement can include a
statement of values and beliefs, such as the organization’s managerial philosophy.
The mission statement for HIMCO in the case study meets most of the
requirements of a complete mission statement, since it does not describe the
technology used to provide services. (However, technology is not a major aspect
of the insurance industry and probably would be left out of a mission statement.)
 Basic product/service to be offered (does what?) comprehensive and
inexpensive Auto and Home insurance packages
 Primary markets or customer groups to be served (to whom?) families of
this state
preferred auto and homeowner rates--the best rates and the best
insurance policies
 Technology to be used in production or delivery (this issue is missing--
computers, telephones, software, Internet, databases?)
 Fundamental concern for survival through growth and profitability--make
certain that we are the leader in providing comprehensive and affordable
insurance
 Statement of values and beliefs such as the organization’s managerial
philosophy. Protection of our clients’ assets is our primary concern.
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2. A sample response follows:
(Respondents are free to invent appropriate answers as long as they include at
least the first five key features in their mission statements.)
HIMCO serves the families of this state by making sure that their assets are
protected. We offer comprehensive and inexpensive Auto and Home insurance
packages, including preferred auto and homeowner rates. Using the Internet, our
comprehensive database, and the benefits of our membership in the primary
industry organizations, we continuously search for the best rates and the best
insurance policies to make certain that we are the leader in providing
comprehensive and affordable insurance to the families of this state. Protection
of our clients’ assets is our primary concern.
3. Sample mission statement for the clerical unit at HIMCO: (Another would be fine
as long as it aligns with the company mission statement and contains the
components (or key features) of a mission statement)
The clerical unit at HIMCO supports the HIMCO mission of protecting the assets
of our customers and their families by providing excellent customer service. As
the first representatives of the company that many clients contact, we provide
caring and competent greetings and direction to the appropriate personnel in the
company. Using computers and the latest electronic technology, we provide
word processing and filing support to the rest of the company, so that all
documents represent the high quality of service provided by the company and
information can be recovered at a moment’s notice. We provide this support
efficiently and effectively, so that our company can remain in the leadership
position, continuing to protect our clients’ assets.
The clerical unit mission statement provides the following key features by
answering the questions shown in parentheses:
 Basic product/service to be offered (does what?) providing excellent
customer service, greetings and direction, word processing and
paperwork filing support
 Primary markets or customer groups to be served (to whom?) clients and
the rest of the company
We provide this support efficiently and effectively
 Technology to be used in production or delivery computers and other
electronic technology
 Fundamental concern for survival through growth and profitability so that
our company can remain in the leadership position
 Statement of values and beliefs such as the organization’s managerial
philosophy. The clerical unit at HIMCO supports the HIMCO mission of
protecting the assets of our customers and their families by providing
excellent customer service . . . continuing to protect our clients’ assets.
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Chapter 3
Case Study: Whole Foods Market 1
Whole Foods Market, a publicly traded company, is in the process of developing a new
strategic plan for the 5 years from 2007-2012.
The industry faces different challenges from those experienced during the past 25 years.
Originally, Whole Foods Market was among the pioneers who introduced a supermarket
format into the natural foods industry in the United States. During the past 25 years, this
company grew through mergers and acquisitions of local and regional family-run natural
foods retailers, expanding to the United Kingdom in 2004 with the purchase of Fresh and
Wild. (In 2007, the company announced it was in the process of acquiring Wild Oats
Market in the United States as soon as concerns regarding possible monopolies could be
resolved.) Most of these companies emphasized stringent quality standards, sustainable
agriculture, local community involvement, and development of an empowered and
passionate staff. Although there are shared cultures, many of the original company
loyalties remain.
In 1992, Whole Foods Market became a publicly traded stock on the New York Stock
Exchange. (It had a two for one stock split in 2001.) In 1999, WholeFoods.com went
online as an e-commerce site which has merged with other Internet properties to become
Gaiam.com in 2005. The corporate Web site has continued to provide information on the
company and its mission emphasis of “Whole Foods, Whole People, Whole Planet.”
Meanwhile, the world economy appears to be expanding, although some political
situations may be less stable. For example, increased security in the United States may
interfere with worldwide shipments of food. The Internet continues to offer both
opportunities and challenges to e-commerce. One Web site now provides encouragement
to Whole Foods Market employees who are attempting to form a union.
You have been hired as a performance management consultant by the Board of Directors
to assist them in developing the strategic plan for the next 5 years.
1. In this context, explain the factors the Board of Directors will need to consider in
developing a strategic plan.
(Suggested points: 10, .3[3.1], .7[3.4])
2. Provide a detailed discussion of what the organization will need to do to create a
strategic plan for the next 5 years.
(Suggested points: 10, .4[3.4], .3[3. 10], .3[3.12])
3. Critically evaluate how the strategic plan will relate to individual performance.
(Suggested points: 10, .3[3.13], .4[3.14], .3[3.15])
4. How can management enhance organizational support for the performance
management plan through this strategic planning process?
1
Some information for this case study was taken from the following two Web sites:
http://www.wholefoods.com/ and http://www.wholeworkersunite.org/
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(Suggested points: 10, .5[3.3], .5[3.16])
Answers:
1. In this context, explain that because the Board of Directors hired me as a
performance management consultant, they are expecting me to bring my expertise
in performance management to the drawing board. Not only will I need to help
them develop a strategic plan, I will need to help them craft a plan that connects
the strategic plans of each department, division, and unit in the company,
impacting every employee’s performance plan from top management to stockers
in the individual stores.
The factors involved in developing such a strategic plan include:
• The conduct of an environmental analysis (i.e., the identification of the
internal and external parameters of the environment in which the
organization operates). The environment has changed substantially,
internally and externally–and further change can be expected. It will be
important to conduct a gap analysis to analyze external opportunities and
threats in economic, political, social, technological, and market trends. In
addition, the gap analysis will analyze strengths and weaknesses of the
company’s internal environment, such as the organizational structure and
culture, politics, processes, and size.
• The creation of an organizational mission (i.e., statement of what the
organization is all about). In the case of Whole Foods Markets, which has
been in business for over 25 years, a mission statement exists; however, it
will be important to re-examine it to ensure that it provides direction for
the future.
• The creation of an organizational vision (i.e., statement of where Whole
Foods Market intends to be in the long term, say about 10 years).
• Setting goals (i.e., what Whole Foods Market intends to achieve in the
short term, say 1-3 years).
• Developing strategies to fulfill the mission and vision and achieve the
goals of Whole Foods Market.
2. As discussed above, the organization will need to do an environmental analysis,
create or redefine its mission statement, create a vision, and develop goals and
strategies to move the organization forward. This is a somewhat circular process,
where information is developed in one area that contributes to another, which
comes back to assist with the earlier process. It is important to get employees
from throughout the organization involved in developing the strategic plan in
order to develop ownership and to ensure that the plan is actually implemented
throughout the organization.
• To begin with, the Board of Whole Foods Market needs to conduct a gap
analysis to determine where the company can exercise leverage, where the
company is constrained, where it is vulnerable, and where it may have
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Chapter 3
problems. An example would be if the company encounters negative
publicity in its potential responses to union building (a vulnerability and
potential problem if customers see the company in a negative light). When
the gap analysis is complete, the Board will have information to use in re-
developing its mission statement and developing a vision for the next 5-10
years.
• In creation of the mission statement, the Board of Whole Foods Market will
need to include answers to the following questions:
1. Why does the organization exist? This answer may have changed over
the years and may need editing.
2.What is the scope of the organization’s activities? The organization now
is located in several countries and on the Internet. It is important to re-
examine where Whole Foods Markets wants to go. . . and where it
does not intend to compete.
3. Who are the customers served? The customers have changed over the
past 25 years; they may have different educations, incomes, interests,
cultural concerns, etc.
4. What are the products or services offered? These have changed over
the past 25 years; the mission statement needs to reflect those changes.
. . and any changes that are planned.
More specific and detailed information will be needed if this mission statement is
to be used by the various units within Whole Foods Market to create their own
mission statements. Even more detailed information will be needed if both the
organization and unit mission statements will be used as input for individual job
descriptions and for managing individual and team performance. In general,
thorough mission statements include the following components:
 Basic product/service to be offered (does what?)
 Primary markets or customer groups to be served (to whom?)
 Unique benefits and advantages of products/services (with what
benefits?)
 Technology to be used in production or delivery
 Fundamental concern for survival through growth and profitability
Also, mission statements typically include information on the organization’s
values and beliefs, including the following items, which may not need much
change from the original mission statement:
Managerial philosophy of the organization
Public image sought by the organization
Self-concept of business adopted by employees and stockholders
• As Whole Foods Market develops its vision for the next 5-10 years, it will state
future aspirations, focus attention on what is important, and provide a context for
evaluating the opportunities and threats identified in the gap analysis. This vision
statement should be brief, verifiable, focused, understandable, inspiring, current,
bound by a timeline, and a stretch for the company. . . reachable with effort.
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• When the mission statement and vision have been developed, Whole Foods
Market will need to set goals which formalize the planned achievements for the
next 5 years. These goals should provide a basis for performance measurement
by giving employees a source of motivation and tangible targets to strive for. In
addition, they will give management the basis for good decisions in allocation of
resources. Such goals should cascade throughout the organization, based on the
strategic plan developed.
• Finally, strategies must be developed to provide procedures and plans to meet the
goals. One strategy would be to examine job descriptions to ensure that every job
is organized to work toward the goals of the units, which are organized to work
toward the goals of the divisions, which are organized to work toward the goals of
the company. Issues to be addressed by such strategies include: growth, survival,
turnaround, stability, innovation, and leadership. (Note: It is important to
remember that Whole Foods Market’s mission statement, vision statement, goals,
and strategies must clearly align with--and be congruent with--every unit’s
mission statement, vision statement, goals, and strategies.
3. Provided that the Board accepts my recommendation to involve all employees in
the development of the organization’s strategic plan, the mission, vision, goals,
and strategies of Whole Foods Market (the organization) will align with each
unit’s mission, vision, goals, and strategies. Each unit will develop job
descriptions with tasks and required knowledge, skills, and abilities (KSAs) that
are congruent with the unit’s strategic plan and thus the overall strategic plan.
Thus, each employee will have a job description that is based on the needs of the
organizational strategic plan. Individual and team performance will be evaluated
according to results, behaviors, and the developmental plan that has been
developed for the specific job description, which is based on the organization’s
strategic plan.
4. The Board needs to involve managers at every level in the development of the
strategic plan (its mission, vision, goals, and strategies) to ensure that the plan
cascades into every part of the organization. Eventually, each unit will need to
ensure that job descriptions and individual performance plans are synchronized
with the strategic plan. Thus, the Board of Directors initially needs to consider
the fact that a strategic plan, in order to be useful, must help the company to craft
its identity and lead to profitable action on the part of all employees.
At each level, employees need to understand “what’s in it for me?” Top
management will be responsible for helping to carry out the vision it was involved
in developing. At all levels, it is important that employees be involved in and
participate in the development of the organizational vision and goals, so that each
level has employees who were directly involved and are now committed to
encouraging their peers to help the organization achieve its vision and goals.
When the strategic plan is directly connected to the performance management
plan, employees will understand how the performance management plan is a
useful tool to help the organization meet its vision and goals. Since they were
53

Chapter 3
directly involved in the development of the strategic plan, they will have a
personal investment in using the performance management plan to help achieve
their vision and goals.
54

Performance Management - Herman Augnis

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