Concept of Career Planning; Career is viewed as a bunch or collection of jobs or positions. Generally, it describes an applicable career path within the structure of the organization. It shows the principal personnel development paths within the organization. The etymology of the term derived from the Latin word career, which means race. All the jobs, that are held together during one’s working life, constitute the career. It is also viewed as the sequence of positions held by an individual during his employment life. Edwin B. Flippo defined a career, as a sequence of separate but related work activities that provide continuity, order, and meaning in a person’s life.
The Concept of Career Planning: Definition, Objectives, Process, and Benefits.
A career may be viewed as the amalgamation of the changes in values, attitudes, and motivation an individual embraces, as he or she grows older. This constitutes a subjective element of the concept “career”.
Concept And Meaning Of Career planning:
Career planning is a process by which one selects career goals and the path to those goals. It involves a clear selection of career goals and career paths.
Career goals: Career goals are the desired future positions an employee strives to reach as a part of the career.
Career path: Career path is the sequential pattern of jobs during a career. It can cover 30 years or more until the retirement of the employee. It takes a long-term perspective of the job.
Career planning is a continuous process. HRM should facilitate it by providing career education, information, and counseling to employees for career planning purposes.
Career education: Career education increased employee awareness about career planning through a variety of educational techniques, such as:
Workshops and seminars about career planning
Memoranda and position papers about career planning
Speeches about career planning
Career information: Career information provides information to employees about career planning. Such information can be available through Human Resource Information System. HR specialists can advise about career goals and alternative career paths.
“A sequence of jobs that constitute what a person does for a living.”
According to Schermerborn, Hunt, and Osborn,
“Career planning is a process of systematically matching career goals and individual capabilities with opportunities for their fulfillment.”
Career planning is the process of enhancing an employee’s future value.
A career plan is an individual’s choice of occupation, organization and career path.
Career planning encourages individuals to explore and gather information, which enables them to synthesize, gain competencies, make decisions, set goals and take action. It is a crucial phase of human resource development that helps the employees in making the strategy for work-life balance. New Roles of Human Resource Management in Business Development.
Features of Career Planning and Career Development:
It is an ongoing process.
It helps individuals develop the skills required to fulfill different career roles.
Strengthens work-related activities in the organization.
Defines the life, career, abilities, and interests of the employees.
It can also give professional directions, as they relate to career goals.
Objectives of Career Planning:
The major objectives of career planning are as follows:
To identify the positive characteristics of the employees.
Develop awareness about each employee’s uniqueness.
To respect the feelings of other employees.
Attract talented employees to the organization.
To train employees towards team-building skills.
To create healthy ways of dealing with conflicts, emotions, and stress.
Benefits of Career Planning:
Career planning ensures a constant supply of promotable employees.
It helps in improving the loyalty of employees.
Career planning encourages an employee’s growth and development.
Discourages the negative attitude of superiors who interest in suppressing the growth of the subordinates.
It ensures that senior management knows about the caliber and capacity of the employees who can move upwards.
It can always create a team of employees prepared enough to meet any contingency.
Career planning reduces labor turnover.
Every organization prepares succession planning towards which career planning is the first step.
Career planning is the process by which one selects career goals and the path to these goals. The major focus of career planning is on assisting the employees to achieve a better match between personal goals and the opportunities that are realistically available in the organization. Career programs should not concentrate only on career growth opportunities. Practically speaking, there may not be enough high-level positions to make upward mobility a reality for a large number of employees. Hence, career-planning efforts need to pinpoint and highlight those areas that offer psychological success instead of vertical growth.
Career planning is not an event or end in itself, but a continuous process of developing human resources for achieving optimum results. It must, however, note that individual and organizational careers are not separate and distinct. A person who is not able to translate his career plan into action within the organization may probably quit the job if he has a choice.
What is the Concept of Career Planning? Image form Online.
A Performance Management System (PMS) is a structured approach designed to enhance organizational performance by aligning employee goals with company objectives, fostering continuous feedback, and promoting accountability. Discover its types, stages, key components, benefits, and challenges to implement an effective PMS that drives growth and employee satisfaction.
What are the Performance Management Systems?
A Performance Management System (PMS) is a strategic framework designed to enhance organizational performance by managing employee productivity. It aligns individual goals with company objectives, encourages continuous feedback, fosters employee development, and establishes accountability, ultimately driving growth and satisfaction within the organization.
Definition
A Performance Management System (PMS) is a systematic and strategic approach aimed at improving organizational performance through effectively managing employee performance.
This expansive framework provides structure and methodology by which organizations can align their objectives with employee goals, ensuring that everyone is working towards a common purpose.
PMS not only focuses on evaluating employee productivity but also encompasses continuous development and support to achieve optimal performance.
Purpose
The primary purpose of a performance management system is multifaceted. It serves to ensure that the activities of employees and teams are aligned with the strategic objectives of the organization. By promoting consistency in performance expectations, PMS helps to enhance communication between managers and employees.
This alignment encourages employee growth and development, ultimately leading to improved job satisfaction and motivation. additionally, a well-structured PMS fosters a culture of accountability, where individuals take ownership of their roles and contributions to the organization’s success, while also providing a clear avenue for feedback and performance correction.
Types
Traditional Performance Management: This type often centers around annual reviews, where managers assess employee performance based on preset criteria or past performance. These reviews may be infrequent and retrospective, offering limited opportunities for timely feedback and adjustment.
Continuous Performance Management: In contrast to the traditional model, continuous performance management emphasizes ongoing feedback, frequent check-ins, and real-time discussions regarding performance. This approach allows for immediate identification of areas needing improvement and fosters a proactive performance culture.
360-Degree Feedback: This comprehensive type of PMS involves collecting performance feedback from multiple sources, including peers, direct reports, managers, and sometimes even customers. This holistic view provides a broader perspective on the employee’s performance and behaviors, encouraging a more rounded approach to development.
Management by Objectives (MBO): This method consists of setting specific, quantifiable objectives for employees to achieve within a designated timeframe. Progress towards these objectives is typically monitored through regular meetings, allowing for adjustments as needed and ensuring employees stay on track toward achieving their goals.
Stages
Planning: The first stage involves setting clear performance expectations and establishing measurable goals. This stage is critical because it lays the foundation for what is expected and helps employees understand their contributions to the overall business strategy.
Monitoring: In this stage, performance is regularly observed and assessed against the established goals. Continuous monitoring aids in identifying trends and addressing any issues proactively, rather than waiting until a formal review.
Reviewing: This stage includes formal evaluations where both managers and employees discuss performance outcomes. These discussions should be constructive and aimed at identifying successes, areas for improvement, and potential development opportunities.
Developing: The final stage focuses on personal and professional growth. Based on feedback and review discussions, development plans are created, highlighting training needs or resources that can help employees enhance their skills or overcome challenges.
Implementation
Implementing a Performance Management System requires careful planning and execution. Key steps can include:
Defining Clear Objectives: Establishing performance metrics that are closely aligned with the broader business goals ensures that all employees are focused on contributing to the organization’s success.
Training and Development: Equipping managers and employees with the skills needed to engage in effective performance management is vital. Training programs should cover communication techniques, feedback methods, and how to set SMART (Specific, Measurable, Achievable, Relevant, Time-bound) goals.
Communication: Establishing transparent communication channels is essential for discussing performance expectations. Employees should feel comfortable approaching their managers with questions or concerns regarding their performance.
Technology Integration: Utilizing software tools for performance tracking and evaluation can streamline the process and make it easier to collect data, conduct assessments, and monitor progress over time.
Components
A functional Performance Management System typically includes several key components:
Performance Appraisals: Regular assessments enable managers to evaluate employee performance formally. These should be constructive and objective to ensure fairness and accuracy in evaluations.
Feedback Mechanisms: Structured feedback processes encourage managers to provide timely and specific feedback to employees. This can include both positive reinforcement and constructive criticism aimed at fostering improvement.
Development Programs: Initiatives aimed at skill enhancement are integral to a PMS. These programs can include mentorship opportunities, training sessions, and professional development workshops tailored to employee needs.
Benefits
A well-implemented performance management system offers numerous benefits:
Enhanced Clarity: By providing clear performance expectations, employees can better understand their responsibilities and how their work fits into the organization’s goals.
Improved Employee Engagement: Involving employees in their performance discussions boosts their commitment to their roles, fostering a more motivated workforce.
Increased Accountability: With defined performance metrics, employees are more likely to take responsibility for their contributions, enhancing overall organizational accountability.
Data-Driven Decisions: An effective PMS enables the collection and analysis of performance data, facilitating informed decision-making regarding promotions, training needs, and strategic adjustments.
Disadvantages
Despite the advantages, there are also notable disadvantages in implementing a performance management system:
Time-Consuming: Managing and maintaining an effective PMS can require significant time and resources, potentially diverting attention from other critical operational tasks.
Possible Bias: Evaluation processes may inadvertently introduce bias, whether from personal relationships, subjective evaluations, or unclear performance criteria, leading to perceived or real unfairness.
Stressful for Employees: Formal evaluations can create anxiety, making employees feel under pressure during review periods. This stress may negatively impact performance rather than enhance it.
Resistance to Change: Employees may resist new systems or methods, particularly if they are accustomed to traditional evaluation processes. This reluctance can hinder the successful implementation of a PMS, making buy-in from all levels of the organization crucial.
Frequently Asked Questions (FAQs)
1. What is a Performance Management System (PMS)?
A Performance Management System (PMS) is a structured approach that organizations use to improve employee performance and align individual goals with the overall objectives of the company. It encompasses goal setting, monitoring, feedback, and development.
2. Why is Performance Management important?
Performance management is crucial because it helps ensure that employees are meeting organizational goals, encourages communication, fosters accountability, and supports employee development, which can lead to increased job satisfaction and productivity.
3. What are the different types of Performance Management Systems?
Traditional Performance Management: Focuses on annual reviews based on preset criteria and past performance.
Continuous Performance Management: Emphasizes ongoing feedback and real-time performance discussions.
360-Degree Feedback: Collects input from multiple sources, providing a comprehensive view of an employee’s performance.
Management by Objectives (MBO): Involves setting specific, measurable objectives for employees.
4. What are the stages of Performance Management?
Planning: Setting clear expectations and measurable goals.
Monitoring: Regularly assessing performance against goals.
Reviewing: Conducting formal evaluations and discussions about performance.
Developing: Creating development plans based on feedback and reviews.
5. What are the key components of a Performance Management System?
Goal Setting: Establishing clear objectives for employees.
Performance Appraisals: Regular evaluations of employee performance.
Feedback Mechanisms: Structured processes for providing timely feedback.
Development Programs: Opportunities for skill enhancement and professional growth.
6. What are the benefits of implementing a PMS?
Enhanced Clarity: Clear expectations help employees understand their roles.
Improved Employee Engagement: Involving employees in performance discussions motivates them.
Increased Accountability: Defined metrics encourage responsibility for contributions.
Data-Driven Decisions: Enables informed choices regarding promotions and training needs.
7. What are the disadvantages of Performance Management Systems?
Time-Consuming: Maintaining an effective PMS can require significant resources.
Possible Bias: Evaluations may introduce subjective bias leading to perceived unfairness.
Stressful for Employees: Formal reviews can create anxiety and pressure.
Resistance to Change: Employees may resist new systems, impacting implementation success.
8. How can organizations successfully implement a PMS?
Organizations can ensure successful implementation by defining clear objectives, providing training, maintaining transparent communication, and integrating technology for performance tracking.
First, understand what is KMS (Knowledge Management Systems)? after Learn Costs and Benefits in KMS: KMS is a method for the improvement of business process performance. A knowledge management system is most often used in business in applications such as information systems, business administration, computer science, public policy and general management. Common company departments for knowledge management systems include human resources, business strategy, and information technology.
Knowledge Management Systems (KMS) like any other information systems have its benefits as well as costs, weighing the benefits in the relationship with the costs will probably provide a basis for deciding whether to invest in it or not. What is Market-Based Management?
Costs of KMS
Although knowledge management system is beneficial and important to the organization, it also involves some cost. These costs vary quite a bit, depending on the size of the organization, the current level of infrastructure and the scope of knowledge management initiative. Also, the cost depends on whether or not there is an existing infrastructure.
According to Marks, the first step in determining the return on investment for a knowledge management project is to determine the costs. On the surface, this may seem deceptively simple, but there are costs involved in a knowledge management project that may not be readily obvious to the manager who is not experienced in estimating such projects. Costs here include, but are not limited to the costs of hardware, software, and training.
1. Software: Obviously, the project will incur the cost of whatever software is chosen to be used. This can range from free, to nearly free, to several thousand dollars for an enterprise-wide knowledge management (KM) system. In addition, any technical infrastructure for the software that is needed will also have to be counted in the costs. The cost of software depends on whether the organization wants to use the bare-bones knowledge management systems, which may use e-mail, Web servers, corporate intranets, newsgroups, shared file systems, or centralized databases and other software the company likely already has and uses, or can obtain for little or no cost. Or wishes to institute a level of knowledge integration and manage knowledge transfer which will involve investment in a commercially available product designed specifically for the tasks that the company wishes to be able to accomplish with the knowledge management project.
2. Hardware: This involves the costs of infrastructure that will be needed to support the system. There might also be the need for internet and network connections. Any upgrades to the company’s network that will be needed in order to handle increased traffic attributable to the knowledge management system might also need to be considered. Using current systems and equipment will lead to heavier loads than in the past, and this will need to be considered too.
3. Labour: It involves the cost that will need to be considered is the cost of employing a member of the IT staff to install the KM hardware and software on all needed servers and client machines as well as configuring the application to meet the need of the business. There will also be the need for maintenance. Knowledge will need to be input into the system in order for it to be useful, the costs for doing this might be heavy early on, but will steady out in the future, and will be based on the use of the system. The cost of training should also be considered as a labor cost due to the time sacrificed for it.
Other, not so obvious costs that will be incurred include employee training, incentives to entice employees to use the KM system, and the labor costs of employees choosing to use the knowledge management system instead of working on other aspects of the job. Most of these labor costs will become benefits fairly readily, but they are an investment made by the company and must be counted in the costs of the knowledge management project in order to accurately measure or predict the cost of the project.
Implementation costs are usually moderate to acquire the hardware, develop internal software or license software from 3rdparty suppliers, and to train employees to utilize the system effectively. However, the potential savings and increased efficiencies are enormous. The payback period for most companies is estimated to be six months or less. The payback period will decrease as the size of the organization increases, and with the number of global locations that the company operates. McDonald and Shand ‘reported that a typical consultant-assisted knowledge management system costs between $1.5 million to develop’.
Benefits of KMS
Before any organization can invest their funds in anything, there must have been some expected or anticipated benefits or returns, there is need to highlight the benefits and cost of knowledge management systems. This system just like any other information systems is meant to add value to the organization, but knowledge management system, deal particularly with the intellectual asset of the organization. Although the major reason why most organizations invest in Knowledge Management Systems (KMS) is to gain competitive advantage, other derivable benefits are:
1. Efficiency and Problem Solving: Knowledge management systems when done right will help in ensuring faster response time to key issues, make service delivery faster and also enhance problem-solving. This is because when best practices are well codified, stored, and made available, and when methods for problem-solving can be maintained, and made available instantaneously, employees won’t have to spend time looking for answers. Problem-solving will be eased as it will be possible to solve problems anytime and anywhere which will make the organization more productive, efficient and effective. Due to the nature of this organization, (consulting firm), the application of knowledge management systems will help in carrying out the needed services efficiently. For example, expert and dependable advice will be given to clients based on the availability of experiences and knowledge for comparison and justification.
2. Better Decision Making: Knowledge management systems will help in making better decisions. When knowledge and experiences are pooled together, there is an avenue for critical considerations and judgment before decisions will be made. This is particularly important when there is need to compare and contrast before arriving at a decision or conclusion. The availability of needed idea, information and knowledge will help in making sure that the right decision is taken after the critical and intense examination which will also make the decision more concrete, justifiable and dependable. This will make this firm able to make necessary decisions on the needed improvements that will make our services more competitive and acceptable (preferable to a client).
3. Quality Service Delivery: One benefit that will be obtained will be the increased quality of services after using the KM systems. An employee who uses the knowledge management system may be able to obtain knowledge that will reduce the number of defective services that employees deliver or will increase the effectiveness and quality of the services being delivered. Higher quality services mean fewer dissatisfied clients, which mean fewer complaints from clients. Fewer complaints improve the company’s revenues and profit and are a benefit that can be attributed to a knowledge management system. If a company can notice a decrease in clients’ dissatisfaction since the knowledge management system was launched, at least a significant portion of this increase can be attributed to the KM system and marked as a benefit for it. This means that this organization will be able to come up with better and more competitive services due to the possibility of sharing valuable organizational information, knowledge, intelligence, and experiences among employees. This serves as a good way of avoiding or reducing redundancy and client satisfaction will be secured due to the improvements that will be introduced.
4. Reduced Cost: Cost reduction is also a benefit that can be realized through the use of a knowledge management system. ‘Cost reduction represents approximately one-quarter of benefits from KM projects’. Besides labour costs, knowledge management systems may also yield savings in material costs. This can be as simple as savings on paper that were previously needed to disseminate memoranda that are now being replaced with entries in the knowledge management program, but the true benefit of cost reduction through knowledge management is realized when employees discover and share methods for reducing costs on final products. Management will likely notice these savings but will need to speak with employees to understand that the source of the savings is indeed from the knowledge management system. This means that this organization will be able to reduce the cost of inviting or seeking professionals, due to the availability of needed knowledge and experiences.
5. Speed and Service Delivery: Knowledge management systems help in compressing time and space for efficiency, reducing time wastage, which means the increase in workers’ productivity. Employees who use the knowledge management system will be able to work faster, because they will find information on the knowledge management environment that will allow them to avoid repeating the work of others, such as a snippet of computer code, or allow them to forgo extensive research that would ordinarily be needed to address a situation, or simply enlighten them to practices others have found that allow the job to be done more quickly. The only way to measure this labor cost savings will be through interviews with the employee. The employee’s estimate and confidence in it will be calculated as a benefit for the knowledge management system. This means that clients will be attended to as fast as possible, which will give the firm an advantage, especially by reducing delay.
6. Reduced Training Time: An investment in these systems will help to reduce training time for new employees. Due to the availability of the needed knowledge and experiences, employees will be able to constantly apply them which will improve their ability. This training time for employees will be reduced as a result of the knowledge they are able to acquire. This means that employees are being trained indirectly through the application of knowledge management systems which reduces direct pieces of training. This will lead to a kind of strategic movement through well-coordinated efforts among peers. Thus the organisation will be able save time and money.
7. Retention of Intellectual Properties: Knowledge management system helps in retaining intellectual properties after the employee leaves if such knowledge is codified. This is because when knowledge is codified, it is added to the organisation’s knowledge repository (a collection of internal and external knowledge), thus when knowledge is captured from an employee, such knowledge will remain even after he/she leaves. This means that it will be possible for the organisation to have a large knowledge base of several knowledge and experiences as a result of the historic knowledge contribution process. This will also help in building employees to become professionals as a result of the availability of previous experiences and knowledge for acquisition.
8. Increased Revenue and Development of New Business Ventures: Knowledge Management Systems helps in providing the personal capacity for revenue generation. It allows employees to work together and share ideas about certain plans especially in a global firm. Due to the cross-pollination of ideas among employees, there is a possibility that new business ventures will be developed and this will lead to an increase in revenue for the organisation. Due to the availability of ideas and experiences, this organisation will be able to manage the available knowledge for productivity and profitability.
9. Sharing Business Resources over Long Distances: Through the use of knowledge management systems, the sharing of business resources is made possible. This is because when ideas and knowledge are pooled together, a knowledge-base is created from which each employee can access required information over long distances. If used effectively, these systems will be able to foster the company’s culture across geographic boundaries. All employees will become part of an overall network, each with simple access to the intellectual capital of every member within the network. As a result employees will be able to perform better and jobs would be done faster. This is very important for a global consultation firm like this where relevant information is needed for service delivery. There will be no need to depend solely on the headquarters before needed information are gotten.
What are the Benefits of Strategic Management? Strategic management essentially means the implementation and formulation of various strategies to achieve the goals of the company. This is the detailed initiative that is taken by the top management; these strategic decisions are taken based on available resources; they also take into consideration the effects of the external and internal environment on their decisions.
Here explains read and learn; Benefits of Strategic Management with its advantages and disadvantages:
There are many benefits of strategic management and they include identification, prioritization, and exploration of opportunities. For instance, newer products, newer markets, and newer forays into business lines are only possible if firms indulge in strategic planning. Next, strategic management allows firms to take an objective view of the activities being done by it; and, do a cost-benefit analysis as to whether the firm is profitable.
Just to differentiate, by this, we do not mean the financial benefits alone (which would be discussed below); but, also the assessment of profitability that has to do with evaluating whether the business is strategically aligned to its goals and priorities.
The key point to note here is that strategic management allows a firm to orient itself to its market and consumers; and, ensure that it is actualizing the right strategy.
1] Financial Benefits;
It has been shown in many studies that firms that engage in strategic management are more profitable; and, successful than those that do not have the benefit of strategic planning and strategic management.
When firms engage in forwarding looking planning and careful evaluation of their priorities, they have control over the future; which is necessary for the fast-changing business landscape of the 21st century.
It has been estimated that more than 100,000 businesses fail in the US every year and most of these failures are to do with a lack of strategic focus and strategic direction. Further, high performing firms tend to make more informed decisions; because they have considered both the short-term and long-term consequences and hence, have oriented their strategies accordingly. In contrast, firms that do not engage themselves in meaningful strategic planning are often bogged down by internal problems and lack of focus that leads to failure.
2] Non-Financial Benefits:
The section above discussed some of the tangible benefits of strategic management. Apart from these benefits, firms that engage in strategic management are more aware of external threats; an improved understanding of competitor strengths and weaknesses and increased employee productivity. They also have a lesser resistance to change and a clear understanding of the link between performance and rewards.
The key aspect of strategic management is that the problem solving and problem preventing capabilities of the firms enhance through strategic management. Strategic management is essential as it helps firms to rationalize change and actualize change; and, communicate the need to change better to their employees. Finally, strategic management helps in bringing order and discipline to the activities of the firm in both internal processes and external activities.
3] Closing Thoughts;
In recent years, virtually all firms have realized the importance of strategic management. However, the key difference between those who succeed and those who fail is how strategic management is done and strategic planning is carried out makes the difference between success and failure. Of course, there are still firms that do not engage in strategic planning or where the planners do not receive support from management. As well as, These firms ought to realize the benefits of strategic management and ensure their longer-term viability and success in the marketplace.
The Advantages of Strategic Management;
The following advantages below are;
1] Discharges Board Responsibility;
The first reason that most organizations state for having a strategic management process is that it discharges the responsibility of the Board of Directors.
2] Forces An Objective Assessment;
Strategic management provides a discipline that enables the board; and, senior management to take a step back from the day-to-day business to think about the future of the organization. Without this discipline, the organization can become solely consumed with working through the next issue or problem without consideration of the larger picture.
3] Provides a Framework For Decision-Making;
The strategy provides a framework within which all staff can make day-to-day operational decisions; and, understand that those decisions are all moving the organization in a single direction. It is not possible (nor realistic or appropriate) for the board to know all the decisions the executive director will have to make, nor is it possible (nor realistic or practical) for the executive director to know all the decisions the staff will make.
The strategy provides a vision of the future, confirms the purpose and values of an organization, sets objectives, clarifies threats and opportunities, determines methods to leverage strengths, and mitigate weaknesses (at a minimum). As such, it sets a framework and clear boundaries within which decisions can be made. Also, the cumulative effect of these decisions (which can add up to thousands over the year) can have a significant impact on the success of the organization. Providing a framework within which the executive director and staff can make these decisions helps them better focus their efforts on those things that will best support the organization’s success.
4] Supports Understanding & Buy-In;
Allowing the board and staff participation in the strategic discussion enables them to better understand the direction; why that direction was chosen, and the associated benefits. For some people simply knowing is enough; for many people, to gain their full support requires them to understand.
5] Enables Measurement of Progress;
A strategic management process forces an organization to set objectives and measures of success. Also, the set of measures of success requires that the organization first determine; what is critical to its ongoing success and then force the establishment of objectives and keeps; these critical measures in front of the board and senior management.
6] Provides an Organizational Perspective;
Addressing operational issues rarely looks at the whole organization and the interrelatedness of its varying components. Strategic management takes an organizational perspective and looks at all the components and the interrelationship between those components to develop a strategy that is optimal for the whole organization and not a single component.
The Disadvantages of Strategic Management;
The following disadvantages below are;
1] The Future Doesn’t Unfold As Anticipated;
One of the major criticisms of strategic management is that it requires the organization to anticipate the future environment to develop plans, and as we all know, predicting the future is not an easy undertaking. The belief is that if the future does not unfold as anticipated then it may invalidate the strategy taken. Recent research conducted in the private sector has demonstrated that organizations that use the planning process achieve better performance than those organizations that don’t plan; regardless of whether they achieved their intended objective. Also, there are a variety of approaches to strategic planning that are not as dependent upon the prediction of the future.
2] It Can Be Expensive;
There is no doubt that in the not-for-profit sector there are many organizations that cannot afford to hire an external consultant to help them develop their strategy. As well as, Today many volunteers can help smaller organizations; and, also funding agencies that will support the cost of hiring external consultants in developing a strategy. Regardless, it is important to ensure that the implementation of a strategic management process is consistent with the needs of the organization; and, that appropriate controls are implemented to allow the cost/benefit discussion to be undertaken, before the implementation of a strategic management process.
3] Long Term Benefit vs. Immediate Results;
Strategic management processes design to provide an organization with long-term benefits. If you are looking at the strategic management process to address an immediate crisis within your organization, it won’t. It always makes sense to address the immediate crises before allocating resources (time, money, people, opportunity, cost) to the strategic management process.
4] Impedes Flexibility;
When you undertake a strategic management process; it will result in the organization saying “no” to some of the opportunities that may be available. This inability to choose all of the opportunities presented to an organization is sometimes frustrating. Also, some organizations develop a strategic management process that becomes excessively formal. Processes that become this “established” lack innovation and creativity and can stifle the ability of the organization to develop creative strategies. In this scenario, the strategic management process has become the very tool that now inhibits the organization’s ability to change and adapt.
A third way that flexibility can be impeded is through a well-executed alignment and integration of the strategy within the organization. An organization that is well-aligned with its strategy has addressed its structure, board, staffing, and performance and reward systems. This alignment ensures that the whole organization is pulling in the right direction, but can inhibit the organization’s adaptability. Again, there are a variety of newer approaches to strategy development used in the private sector (they haven’t been widely accepted in the not-for-profit sector yet); that build strategy and address the issues of organizational adaptability.
Control is any process that guides activity towards some predetermined goals. Process of Controlling along with Benefits and Exception of Management. Thus control can apply in any field such as price control, distribution control, pollution control, etc. However, control as an element of management process can define as the process of analyzing whether actions are taking as plan and taking corrective actions to make these to conform to planning.
Here are explain; What is the Process of Controlling?
Controlling as a management function involves the following steps;
Establishment of standards:
Standards are the plans or the targets which have to achieve in the course of business function. They can also call the criterions for judging the performance. Standards generally are classifying into two:
Measurable or tangible: Those standards which can measure and express are called as measurable standards. They can be in the form of cost, output, expenditure, time, profit, etc.
Non-measurable or intangible: There are standards which cannot measure monetarily. For example; performance of a manager, deviation of workers, their attitudes towards a concern. These are called as intangible standards.
Controlling becomes easy through an establishment of these standards because controlling is exercised based on these standards; you will be reading Process of Controlling.
Measurement of performance:
The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as they can express in units, cost, money terms, etc. Quantitative measurement becomes difficult when the performance of the manager has to measure. The performance of a manager cannot measure in quantities.
It can measure only by;
An attitude of the workers,
Their morale to work,
The development in the attitudes regarding the physical environment, and
Their communication with the superiors.
It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports; keep reading Process of Controlling.
Comparison of actual and standard performance:
Comparison of actual performance with the planned targets is very important. The deviation can define as the gap between actual performance and the planned targets. The manager has to find out two things here- the extent of deviation and cause of the deviation. An extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance.
The managers have to exercise control by exception. He has to find out those deviations which are critical and important for the business. Minor deviations have to ignore. Major deviations like the replacement of machinery, an appointment of workers, quality of raw material, the rate of profits, etc. should look upon consciously.
Therefore it is said,
“If a manager controls everything, he ends up controlling nothing.”
For example, if stationery charges increase by a minor 5 to 10%, it can call as a minor deviation. On the other hand, if monthly production decreases continuously, it’s called the major deviation.
Once the deviation is identifying, a manager has to think about the various cause which has led to a deviation.
The causes can be;
Erroneous planning,
Co-ordination loosens,
Implementation of plans is defective, and
Supervision and communication are ineffective, etc.
Taking remedial actions:
Once the causes and extent of deviation are known, the manager has to detect those errors and take remedial measures for it. There are two alternatives here;
Taking corrective measures for deviations which have occurred; and
After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow-up is an important step because it is only through taking corrective measures, a manager can exercise control.
An exception of Management and Controlling:
One of the most important ways of tailoring controls for efficiency and effectiveness is to make sure that they are designed to point out exception. In other words, by concentrating on exceptions from planned performance, controls based on the time-honored exception principles allow managers to detect those places: where their attention’s require and should give.
This implies the use of management by exception particularly in controlling aspect. Management by exception is a system of identification and communication that signals to the manager when his attention’s need. From this point of view, management by exception can use in other management processes also though its primary focus revolves around controlling.
Their ingredients:
Management by exception has six basic ingredients:
Measurement assign values to past and present performances. This is necessary because, without a measurement of some kind, it would be impossible to identify an exception.
Projection analyses those measurements that are meaningful to organizational, objectives and extends them into future expectations.
Selection involves the criteria which management will use to follow progress towards organizational objectives.
Observation stage of management by exception involves the measurement of current performance so that managers are aware of the current state of affairs in the organization.
Comparison stage makes a comparison of actual and planned performance and identifies the exceptions that require attention and reports the variances to management.
Decision-making prescribes the action that must take in order to bring performance back into control or to adjust expectations to reflect changing conditions or to exploit the opportunity.
Thus it can observe that management by exception is inseparable from other management essentials in many ways. However, the major difference lies in the fact that the superior’s attention’s draw only in the case of exceptional differences between planned performance and actual performance. In other cases, the subordinate manager takes decisions. However, what is-exceptional requires the completion of the whole process.
Process of Controlling along with Benefits and Exception of Management. #Pixabay.
What is Benefits or Management by exception?
There are various areas where percepts of management by exception are using such as statistical control of product quality, economic order quantities and order points for control of inventories and supplies, break-even points for determining operating, levels, trends in ratios of indirect to direct labour used in apportioning overhead, attitude surveys for gauging employee morale, etc.
Important Points:
The use of management by exception is prevalent because of the following factors:
Management by exception saves executives’ time because they apply themselves to fewer important problems. Other details of the problems are left to subordinates.
It concentrates executives’ efforts on major problems. Instead of spreading managerial attention across all sorts of problems, it is placing selectively where and when they need. Thus it ensures better utilization’ of managerial talents.
It facilitates better delegation of authority, increases the span of management and consequently provides better opportunities for self-motivated personnel in the organization. It lessens the frequency of decisions at the higher levels of management, which can concentrate on strategic management rather than engaging themselves in operational management.
Management by exception makes better use of knowledge of trends, history; and available business data. It forces managers to review past history and to study related business data because these are the foundations upon which standards are deriving and from which exception’s note.
It identifies crises and critical problems and thus avoids uninformed, impulsive pushing of the panic button. They help in the identification of crises because the moment any exceptional deviation occurs, the attention of higher-level manager’s draw. In this way, it also alerts management to opportunities as well as difficulties.
Management by exception provides qualitative and quantitative yardsticks for judging situations and people. Thus it helps in performance appraisal by providing more objective criteria and provides better motivation to people in the organization.
