Strategic performance management
With the rapid changes occurring in the business world due to tough global competition, product proliferation, customer relations, the preferences and working of organizations has also changed and enhanced. However the success and permanence of organizations relies the way the organizations perform. This could be further explained as the way organizations carry out their strategies and achieve its objectives to be effective.
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For this purpose it is necessary that are noses are pointed in the same direction, means as every employee contributes to the organization through his/ her activities towards the attainment of objectives f the organization. However it is the responsibility of the manger to keep a proper tract about the performance of the employees through performance measurement as the performance and success of the organization heavily relies on the performance of its people. As Bititci., et al (1997) said: “The need for an integrated set of performance measures which supports rather than contradicts business objectives is clearly established”. Similarlyteams are the most important force within an organization to derive it, enhance the performance and achieve the strategic objectives f the organization. A team may be a functional team, project team or a team of managers; it is believed people get most done when they are working together in an effective way. However if the team or the members of the team are not working accurately or in an effective manner this may hinder the performance and productivity of the company. The current report aims at measuring the performance and strategic objectives of Tesco.
1.Putting performance targets to achieve Strategic objectives of Tesco:
The most obvious strategic objectives of any organization are directed towards the maximizing and generating higher profits and returns for the owners, others are aimed at customers and society at large (Dess., et al 2005). However the setting of strategic objectives is a challenging task for an organization as the failure and success of the organizations depends a lot on the objectives the organization is setting. Strategic objectives are set for a longer time. Tesco is one of the famous and UK based supermarket. The company was founded way back in 1919 and its founder was Jack Cohen. The company is using mix tools for performance management. Tesco is using score card methodology which has been tailored and named as “Steering Wheel”. However the steering wheel is extension of Kaplan and Norton (1996) and contains the element of community at its heart (Talking Tesco, 2009). However the company has developed the steering wheel on the basis of cooperate strategy and is employed by the executives of the company to achieve the core objective of the company. The wheel comprises of four different dimensions and each dimension underpins its own set of objectives. However Tesco measure its objectives by different coding colors such as green, amber and red. The green color depicts that the objectives of the company by its employees are met, amber depicts the tasks that needs attention and red color depicts failure of the task or objective by the employees. For instance it could be explained as the target set for waste in one of the store was set at 5% of the revenue generated by the store, however if the percentage is below 4 it is depicted as green color on the steering wheel, and above 5 percent the wheel shows red color.However this does not have a visionary purpose. Witcher., et al (2008) argued to this and said the purpose of Tesco in doing so is not to achieve a new position but it aims at measuring the values which are in line with the purpose or objectives of the company. However the main aim of having steering wheel is enable and relate the personal objective of the employees with the values of the business in order to provide the staff to stabilize the vales efficiently in managing the daily work. The wheel consists of the four Kaplan and Norton perspectives with an addition of community perspective added in 2006 (Tesco, 2008). The wheel helps Tesco to achieve all its objectives by the way of performance targets.
Source: Tesco .com
1.1 The link between team performance and strategic objectives of Tesco:
The colors on the steering wheels reveals the performance of the any of the store of Tesco, however if the wheel shows green color it means the team performance is in accordance to the objectives of the company and more the company is successful in attaining the objectives set by it through the performance of its employees in form of teams on the contrary the red color on the wheel reveals the team has failed to perform in order to achieve the objectives of the company. The more green the wheel will be the more objectives set by the company will be achieved. However this principle is employed at strategic level of the company (Tesco, 2009).
1.2 Objectives of the organization:
The strategic objectives of the company are:
As being one of the leading retail store in Britain, consisting of 519 stores in England, Scotland and Wales. However there are 105 stores in France and 44 in Hungary. As being a global operator Tesco aims at providing best value of product for the money they pay at competitive price.
Tesco aims to meet the needs of its customers by taking into account the demands and preferences of its customer and moreover by considering the views of customers regarding any innovative product and more over enhances the quality of the product by keeping the choices and changing preferences of the customers.
Tesco aims at improving its services and store facilities in order to provide the shareholders with better returns by maximizing the profits of the company.
Tesco aims at employing latest technology develop the skills of its employees by the way of implement sound management strategies and by the way of training and development program.
Moreover Tesco aims at providing its employees with equal opportunities and provide them with rewards in order to build long term relationship.
Furthermore Tesco aims at adhering to strict price and quality of products standard in order to participate and formulate national food industry policies on the issues of nutrition, health, hygiene and this also includes the safety of animals, supporting well being and protecting the environment (Tesco, 2010).
1.3 Requirements for Workforce to achieve objective of Tesco:
In order to meet the objectives of the company, Tesco employs classical hierarchical management for their stores however keeping in mind the size of the store the hierarchy is dived into six segments such as:
Front end (check outs),
Produce and fresh,
Each section consist of operational staff who is under the supervision of team leader, who has to report to the sectional manager , and the sectional manager is entitled to report to store manger. This store manager has to provide a detailed report to area manger. However the employees are trained to enhance their skills as the company is undertaking new markets such as finance and property and for this the need for capability and expertise is increasing.
1.4 Tools and techniques available to set team performance targets:
The team performance targets are achieved by the website of Tesco or by the Witcher., et al (2008). However the performance of operational staff on the wheel’s objectives is measured quarterly and a summary report is presented to 2000 managers to cascade the staff. As the steering wheel is customer based and undertakes performance based approach and moreover it allows to measure performance on daily basis that is used for long term strategic objectives. However the performance targets of employees are reviewed at a regular basis. It is imperative to make sure the objectives remain suitable and vigorous measures of performance I the company. However the purpose, vision and the steering wheel go hand in hand and complement each other in managing the corporate performance. This requires the understanding of Tesco ‘purpose’ statement when employing ‘Steering Wheel’. Tesco’s core objective is to create value for customers to earn their lifetime loyalty.
1.5 Processes that deliver outcomes based on organizational goals and aims:
The company has employed balanced score card methodology to measure the operations as the card has been modified as per the needs of the department and the performances are measured during team meetings and the waste is argued at strategic level.
1.6 Appropriate methods for evaluating performance:
The methods adopted by Tesco to evaluate the performance of the staff includes a PDP personal development planning folder , as it contains the detail of performance appraisals, needs of any training, training that is given, and the departmental performance data. However the colors of the steering wheel helps measure the performance of all the departments.
1.7 Review capacity and capability of current workforce:
Using the current work force Tesco has become the largest retailer and employer in UK private sector. Despite the tough construction laws imposed, Tesco is still expanding by leaps and bounds. The UK market has enough labor to cater for the recruitment at UK level. However, for international operations, the capability to recruit from UK diminishes; the recruitment is carried out at local countries. With the current workforce of 280,000 people in UK alone Tesco is more than capable to sustain itself against any future expansion plans.
2. Agreeing team performance targets to meet strategic objectives:
This section highlights the team performance targets in order to meet the strategic gains at store level.
2.1 Performance targets required within teams against current performance:
In order to measure the current performance of the team against performance targets Tesco has employed an internal communication channel called team 5 which the staff has to sign once in a week which undertakes whether the performance target has been achieved or not. Moreover the local stores are required to engage in community and find out about shopping references. The staff is required to be polite, helpful and cordial to the customers. Each store has set seasonal, weekly and occasional targets which are compared with the year on year targets.
2.2 The skills, knowledge and experience required to undertake current organizational activities:
At operational level not much high skills are required but going above the hierarchy of management the enhanced skills are required. For instance the sectionalmanagers need to have the abilities of management, project orientation and awareness of financial matters. The PDP folder helps to access the training needs for the staff, due to rapid technological changes Tesco has invested in training of XML, Macros and other systems such as self help check outs monitoring and online reporting. This allows the staff to mange their own profile online. However this requires efficient communication among the staff and proper training.
2.3 Systems for collecting and assessing information on the overall performance:
Tesco utilizes digital ways to collect and assess information. However it has engaged with the community by the way of leaflets, and surveys but it engages through CSR (corporate social responsibly) at strategic level. Tesco needs to invest in greener and fair products. The data stored at front end allows analyze and compare sales for the overall performance. Moreover the loyalty club cards enable Tesco to understand the buying and shopping patterns of the customers and to allocate new target markets.
3. Motivating team performance to achieve organizational objectives:
In order to achieve the objectives of the company Tesco employs motivational techniques such as rewards, employee of the month, appreciation and encouragement to motivate its employees and get the best out of their performance.
3.1 Context of delegation, mentoring and coaching to achieve organizational objectives:
At Tesco mentoring is provided to the employees during the graduate training program and moreover a mentor is provided for a year. Moreover coaching is provided to the operational staff during the training. At grass root level delegation is not much involved but operational teams do the job which they are required to perform with few job rotations.
3.2 Monitor activities to improve team performance:
In order to improve the team performance of the staff f Tesco needs to adopt a top to bottom approach as communication is very vital for implementing the strategy in any organization. Moreover if the top management does not have communication with the lower staff it gets difficult to assess and monitor strategic objectives and processes going on in the company (Mabey 2002). For this Tesco needs to develop various channels to have a smooth flow of communication to transfer information and to have a better check on the performance of the employees. The higher management needs to keep a healthy relation with the employees to assess them accurately against PDP folder. Moreover identification of the work objectives, key dates and support materials should be provided by the management and also at their daily and weekly staff meetings so that staff can measure their contribution to the steering wheel. Moreover the steering wheel should be monitored strictly against the performance of the employees as it enables the company to strengthen its objectives and attain competitive advantage through workforce efficient performance (Prahalad and Hamel, 1990).
3.3 Monitoring team performance:
On the basis of balance score card methodology Witcher., et al (2008) proposed an strategic model for the company. However it incorporates the regular strategic controls of the company and enables it to monitor them as follows:
Source: Witcher et al, 2008
3.4 Evaluation of team performance against agreed objectives:
At Tesco the team performance is evaluated by the way of feedbacks, team briefings and by implementing Deming’s PDC approach. However the areas which are improving are shown by color code that is communicated by team 5 exercise among the staff (Deming, 1986).
4. Contribution of influence and persuasion to team dynamics:
With evolution of different management theories, the modern business uses a mix of these theories in order to get the maximum benefit. However for the purpose of employee motivation extrinsic or monetary rewards has been a great motivational factor to enhance the performance of the employees. These motivational factors re discussed in this section (Tesco 2010). .
4.1 Methodologies to gain commitment to action:
At Tesco the top management is employing a combination of Taylorism and Maslow theory of need as it enables to enrich the job satisfaction of the employees by involving the staff in the process of decision making and allowing the staff to become a part of the organization. Further the company also provides extrinsic rewards in the shape of bonuses, pay increments in order to motivate the employees. However it has been proven techniques of gaining highly motivated staff with high commitments to the organization. However there are more than 260,000 employees working in Tesco and in order to motivate them and encourage they are asked to participate in staff question time sessions which provides the upper management an insight of the valuable opinions of the staff about the working conditions going on in the stores (Talking Tesco, 2009). Moreover this exercise is focused at just not taking feed back of the employees but also asks to provide useful suggestions from employees in order to enhance the services of the company and quality of the products delivered. Some of the other ways of building healthy relationships among staff members is by communicating through channels exercised between Usdaw (Union of Shop, Distributive and Allied Workers) and Tesco. This partnership is of great importance for both the companies as it provides the biggest trade union agreement which observes the biggest staff forums in private sector. The meeting in held three times a year and exchanges important feed backs from both the sides. Moreover the training and development held during the meeting provides the staff to enrich their skills and experience by working with Usdaw. According to Tesco’s website (2009) the company made an investment of over 2,000 new management and 4,500 team Leader roles to continue to provide their ‘Every Little Helps’ to their customers. Moreover the company tends to motivate its employees through profit sharing and ownership sharing through subsidized share schemes for employees such as ‘Save as You Earn’ and ‘Buy as You Earn’. In addition to the above Tesco pays double amount to employees for their contribution which enable the company to retain and regard highly performing and loyal employees.
4.2 Impact of individual dynamic on securing commitment to action:
The impact of ex-chief executive on the maintaining and securing the commitment of its staff is magnificent. For any strategic action has to be channeled through effective top level management. The Tesco’s former boss earned the industry along with the respect of its employees by achieving many rewards and taking the company to the success of highest level. Mr. Terry Leahy joined the company way back in 1979 and implemented many strategic moves in the company such as introducing and devising the club card (loyalty card) scheme. He was a figure who captured every employee’s imagination as he originated from the humble beginnings within the Tesco. He started working with Tesco as marketing executives and rose to high ranks. He earned a great respect in the Britain Business industry. He was selected as ‘Business Leader of the Year’ in 2003 (Manchester, 2009). In the famous newspaper guardian he was declared the most influential non-elected person in Britain in 2007.he is considered as a visionary leader among his fellow colleagues which could be evident by the performance management methodologies implemented by him in the company (Tesco, 2009b). One of the most significant decisions ever made by Terry has been the introduction of loyalty card and loyalty schemes. Before this, Tesco used to trail behind Sainsbury and Marks and Spencer (Tesco, 2009).However since 1997, under the leadership of Mr. Leahy Tesco has expanded into non food, telecoms, and financials and remains the leading supermarket in UK. These efforts were duly recognized by CMI (Chartered Management Institute), which awarded gold medal for the futurist and pragmatic leadership of Sir Terry Leahy. Jo Causon, director, marketing and corporate affair sat the Chartered Management Institute says: “The pace of change and the drive to build global brands has had a major impact on the nature of management and leadership. Sir Terry Leahy’s vision and determination to maintain high service levels for customers the world over is indicative of his energy for business and a real commitment to deliver effective results.” (CIM, 2009)
From the above it could be concluded that team performance plays a major role in attaining the strategic objectives of the company and in order to enhance the performance of the employees the company should motivate the employees by intrinsic and extrinsic rewards moreover their should be a proper system of check and balance o monitoring of the staff whether the staff is performing according to the objectives of the company. Apart from this a motivational pragmatic and enthusiastic leader or mentor is required who takes the team along with it to meet the strategic objectives of the company.
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