IntroductionPerformance management has been proven to be quite important and pivotal in an organization’s operations and decision making processes. It is practiced through putting measures into place with the main objective of achieving both long term and short term goals. A tactical approach to performance management confines it to a particular time frame and assists in achieving short term goals. The strategic aspect is more interactive and it used to forecast achievement of objectives on a longer term basis (Budworth and Mann 2011). An Analysis of the Strategic and Transactional/ Tactical Aspects of Performance ManagementA strategic approach to performance management places its focus to the broader issues affecting the company in order for it to operate effectively in its current environment.
Various factors are considered and the general direction the company will take in order to achieve its long-term objectives is determined. A tactical approach to performance management on the other hand concentrates on the various activities that are conducted in the company in order to achieve its short-term goals. Companies usually use either one or a mix of the two aspects in its performance management.
This section of the report explores the differences and similarities between the two (Cowan 2008). A manager who is tactical in managing individual or team performance uses a command structure. He or she ensures that the company’s day to day operations are conducted as required regardless of contingencies. Short term objectives such as monthly or quarterly targets are monitored and measures are put into place to deliberate how they can optimally be met. The manager ensures the organization’s short term transactional obligations are met, such as paying employee’s salaries.
This approach to performance management does not cater for improvement and future performance planning. As explained above, a strategic approach to performance management concentrates on issues that influence the achievement of long-term objectives of an organization. Rapid changes are taking place in the business world and companies are finding it really difficult to keep up and sustain a desired level of performance. Increased use of the internet and management information system, technological developments, changing demographic and developments in management thinking and planning and control are some of the issues that are mounting pressure in both profit and nonprofit organizations.
Therefore, methods and processes have been developed in order to ultimately achieve a desired level of performance in an organization. A strategic performance management process incorporates both managers and the individuals or teams that they manage as acting partners. This process is aimed at being flexible and continuous over a long period of time. The various sub-processes that make up the entire strategic management process include target setting, strategic development of objectives, performance measurement, forecasting, performance compensation and performance review. At the first stage, objectives are developed strategically and this provides the company with clear goals that they target to achieve.
It also creates a platform for action plans that will assist in the achieving of these objectives and how performance can be measured. Key value factors are thoroughly considered and the managers analyze how they can best incorporate them in order to gain a competitive edge. However, this stage focuses on calculating future financial results that may be unrealistic because it does not put into consideration environmental changes that might take place in the future.