PERFORMANCE MEASUREMENT AND MANAGEMENT: AN ARTICLE SUMMARY
This research summarizes an article that discussed the role human resource performance measurement as a tool for strategy execution. The article summarized is as follows:
Schneier, Craig E., Shaw, Douglas G., & Beatty, Richard W. (1991). Performance measurement and management: A tool for strategy execution. Human Resource Management, 30(3), 279 301.
The authors contend that, in many large organizations, performance measurement and management systems "are little more than human resource bureaucracies with forms, rules, and review drive systems. In fact, according to the authors, such systems are "paper driven . . . burdens to managers and hence are completed marginally if at all" (p. 279). Typically, managers tend to view such human resource systems as extra work, while employees tend to view such systems as irrelevant. Effective strategy execution, however, according to the authors, requires an effective human resource performance measurement system; one in which managers have confidence and will use effectively.
A part of the problem related to developing a compatibility between management and strategy lies in the issue of corporate control. There two often conflicting views of corporate control. The corporation is owned by its stockholders. The stockholders exercise ultimate control over the corporation through its board of directors. The day to day operational control of the corporation, however, is entrusted to the management team hired by the board of directors.
The theory of the firm is held to be the maximization of profit. Certainly, this theory of the firm expresses the goals of most corporate stockholders. Profitable firms are able to (1) return a part of the profits to the stockholders in the form of dividends, and (2) stimulate the market price of the corporation's common stock. Even when profi...