Integrated Performance Management: A Guide to Strategy Implementation

Citation

Richardson, I. (2006), "Integrated Performance Management: A Guide to Strategy Implementation", Journal of Management Development, Vol. 25 No. 3, pp. 295-296. https://doi.org/10.1108/02621710610648204

Why do so many organizations have difficulty delivering sustained performance? In Integrated Performance Management: A Guide to Strategy Implementation, edited by Kurt Verweire and Lutgart van den Berghe, this question provides the catalyst for an examination of performance management which concludes that what are required are not new performance measures or measurement systems; but more integrated approaches to the challenge of performance management. This assertion is based upon work conducted by the editors, and a team from the Vlerick Leuven Gent Management School, in collaboration with Electrabel, Belgium's largest utility company. The latter had invited the school to provide academic foundations for a multi‐disciplinary management model deployed within their business and, despite initial academic reservations concerning the scope and nature of the challenge, the Electrabel case is used as the foundation for the development of an integrated performance management framework. The argument for the commercial implementation of an integrated performance management strategy, and the subsequent presentation of a framework for achieving it, are presented within this book.

Central to the argument for an integrated approach to performance management is the belief that, despite the hype surrounding the subject and the plethora of tools and frameworks available, current attempts to tackle the issue are fragmented and focus only upon specific aspects of the overall performance management challenge. This, the editors contend, has led not only to confusion on the part of practitioners; but performance management strategies that lack cohesion and organizational alignment. This collection of contributions from both academics and practitioners involved in the Electrabel case, seeks to address the problem by presenting a broader and more comprehensive performance management framework.

The book is broken down into three constituent parts. The first part deals with “traditional” performance management frameworks and academic contributions are presented from the fields of corporate finance, management control, operations management, and risk management. The authors argue that existing performance measurement and management models are largely the product of “functional” thinking and occur at all levels of the organization. Existing models reflect the priorities of the departmental function and, while some organizations have focused efforts on strategic alignment in the area of performance management – crucial to long‐term operational performance – functional management systems have not been developed in a holistic manner with the remainder of the organization in mind.

The second part of the book develops a more integrated performance management framework which views strategy as the product of interplay between decisions made, and actions taken, in the areas of organizational direction and goal setting, operations, support activities, evaluation and control, and systems and structures that create commitment and motivation. In addition to contributions that explore each of the core building blocks of the framework, there is further analysis of the components of organizational behaviour that form an integral part of the discussion relating to commitment and motivation. In summary, it is argued that integrated performance management requires that all components of the framework receive the attention of management; only by integrating these efforts and activities can the organization create a sustainable performance management model.

The third part of the book introduces a concept that the authors consider new to the discussion of performance management; that of “maturity alignment”. They argue that significant attention has been paid to “strategic alignment” in management literature; but that this is insufficient to ensure the long‐term success of performance management models. Drawing on the work of Larry Greiner, a more sophisticated argument is developed that introduces consideration of organizational maturity into the discussion of performance management. It suggests that the characteristics of the framework will be different for businesses at varying stages of maturity. Misalignment, caused by a poorly specified maturity stage, can lead to major problems for performance management initiatives. Establishing the maturity level of the business is, therefore, essential before making decisions related to performance measurement. Furthermore, determining the optimal maturity level for the organization is very important; it is determined by the extent to which the organization can monitor and control the risks created by its most crucial stakeholders. Finally, the relationship between maturity and organizational performance is explored with the authors suggesting that only high maturity organizations are able to combine the extreme needs of sustainability and flexibility.

Although a well structured and easy‐to‐understand book, Integrated Performance Management: A Guide to Strategy Implementation is at times repetitive and, ultimately, lacks a detailed description of exactly how an organization should attempt to integrate its activities in this area. Having stated at the outset that the purpose of the exercise was to present a framework with guidelines and practical recommendations for putting the whole organization on the right track, the authors subsequently state that they do not pretend to have created a fully integrated approach to performance management. The conclusion that the framework is a useful device for understanding new opportunities for further research is rather unsatisfying, given the forcefulness with which the case for an integrated approach has already been made.

For anyone unfamiliar with performance management and measurement, this book will provide a useful account of approaches developed in the various functional domains of business and does, undoubtedly, provide a mechanism for understanding such efforts within the context of an organization wide approach. However, and despite the academic/practitioner collaboration, the authors have not succeeded in demonstrating evidence that such a model will lead to sustained growth and performance. This doesn't mean that it will not, but the case made in the book would be greatly enhanced were it in a position to state with greater conviction that such a link positively exists.