Models, Theories, and Conceptual Framework - Essay Example

3.0 Models, Theories and Conceptual Framework 3.1 Ferreira & Otley (2009) PMS Framework Drawing on a previous model developed by Otley’s (1999) PM framework, Ferreira & Otley (2009) formulated a PMS framework as an extension to this model. Initially, Otley (1999) had conceptualised a PM framework that proposes that there are five key areas that need to be taken into account in the process of developing a coherent PMS structure. The first area of Otley’s (1999) model touches on the identification of objectives of the organisation and suitable methods and processes that can be employed to assess the level of achievement of the set organisational objectives. Performance management often begins with goals and objectives that an organisation wants to achieve. This shows that organisational objectives and goals can play a critical role in determining the design of PMS. Organisational objectives influence the methods and processes that will be incorporated in the PMS. In essence, the PMS will be designed in a manner that is complementary to the organisation’s objectives. For instance, in a case where the organisation’s objectives centers on employee development, processes or activities such as training, mentorship or coaching can be incorporated in the PM structure so as to achieve this objective. The second area centers on implementation strategies, plans, performance assessment and measurement processes. These aspects are also influenced by the initial objectives or goals that the organisation wants to achieve (Otley 1999). The third and fourth areas of the model touch on the identification of performance targets and reward systems that the organisation uses. This model does not particularly explain how these aspects influence the PMS. Nevertheless, the fifth area of the model depicts how different types of information flows influence organisational learning and ensures effective performance monitoring within the PMS (Otley 1999). Similar to this model, a study by Bento & Bento (2006) found that information flow can influence the outcomes of PMS. The study established that a two-way information flow could increase the information processing capabilities of PMS. In reference to Otley’s (1999) model, Ferreira & Otley (2009) developed an extended model that introduced seven other key areas that they believe are crucial in PMS. The new areas introduced include; organisational structure, processes for evaluating employees, rewards, systems and networks, information use, change dynamics of the PMS and links between PMS components. As compared to Otley (1999) model, their model is broader and detailed. Similar to Otley’s (1999) model, the first area in Ferreira & Otley (2009) model revolves around organisational objectives. Nonetheless, Ferreira & Otley specifically center on organisational vision and mission. They note that this area accentuates on the processes, networks and mechanisms that are used to convey the objectives and purposes of the organisation to its members. Unlike the Otley’ (1999) model whose second area focuses on implementation strategies, plans, performance assessment and measurement processes, this model focuses on key factors that are key to a organisation’s success. The third area focuses on organisational structure and the impact or influence it has on the design and implementation of PMS. They note that organisation structure influences the accountabilities and responsibilities of organisational participants. It also defines the activities and specific roles that organisational members should pay attention to. These arrangements in turn influence work efficiency, individual motivation, control systems and information flows and can shape the overall effectiveness of the PMS (Ferreira & Otley 2009). The fourth area of this model touches on the plans and strategies that organisations adopts and the processes or activities that are put in place to ensure success. This area further extends to the strategies put in place to communicate these plans to employees and managers in the organisation (Ferreira & Otley 2009).The fifth area encompasses the key performance measures of the organisation. The performance measures put in place are derived from the organisation’s objectives, strategies and plans and success factors. The sixth area is connected to the fifth area, it touches on the level of performance that an organisation requires in order to realise the identified performance measures and how appropriate targets will be set to ensure success (Ferreira & Otley 2009). The seventh component of this model focuses on the processes that the organisation employs to evaluate individuals, groups and the overall performance of the organisation. These processes may be objective, subjective or a mixture of both. This area further extends to determining how informal and formal controls and information are important in the processes of evaluation. The eighth area touches rewards the organisation intends to offer to its employees and managers for achieving their performance targets. These rewards could be financial or non-financial. This area may involve the penalties imposed when managers or employees fail to achieve their targets. The ninth area focuses on the specific information flows, feedbacks, networks and systems that the organisation has put in place to support the operation of its PMS. The tenth area is somewhat connected to the ninth area as it centers on how the organisation makes use of the information it receives from its networks and systems and the various control mechanisms that it has put in place (Ferreira & Otley 2009). The eleventh component of this model focuses on how PMS design is changed depending on the changes in the external environment or the dynamics within the organisation. The measures put in place could change the PMS design in either a proactive or a reactive manner. The final area of this model touches on how coherent or strong the links between the various component of the PMS and the specific ways in which they are used (Ferreira & Otley 2009). Generally, Ferreira & Otley’s model (2009), postulates that there are twelve key areas that should be taken into account when designing the structure of PMS. The way in which these areas are designed and implemented could influence the outcomes of the PMS. For instance, the rewards out in place for rewarding employees and managers for achieving their performance targets may influence their motivation or morale towards the attainment goals or objectives of the PMS. Therefore, these twelve key areas should be given critical consideration in the process of designing PMS since they are likely to influence its outcomes (Ferreira & Otley 2009). Read More