Performance Management in SME's / Small Organisations

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Performance Management in SME's / Small Organisations
Brendan Quinn, Student (University), Ireland, Member
Most of the theory on PM is based on large organizations. Does anyone have experience of implementing a PM system in a company with less than 50 employees?
I'm conducting research for an undergraduate dissertation on this subject. Any other information on this subject would be appreciated. Thanks.

Implementing Performance Management in Small Companies
Kuiper, Management Consultant, Netherlands, Member
Brendan, Kaplan's Balanced Scorecard also works for small companies. If you don't like the specifics, just adjust the perspectives in the scorecard to really reflect what is important to the company involved. Thereafter, you may define a small set of underlying KPI's and a simple performance tracking system (manual or Excel). And off you go...

Levels of Performance Measurement
Elaine C. Bishop, Business Consultant, United States, Member
Hi Brendan, performance gap measurement is the difference between any objective or goal, and the level of attained achievement. In other words, what is the difference between what was achieved, and what remains to be achieved.
The Balanced Scorecard is more about measuring performance gap as a factor of strategic planning and management. However, performance gap measurement does not necessarily have to begin at the executive level.
For example, a simple method is to measure performance gap -- where ever, whenever it occurs.. Performance gaps can be measured at several different levels: organizational, business, functional, and employee. Additionally, performance gaps can be measured within employee sectors, as a factor of the employee performance evaluation for organizational leaders, organizational managers, and organizational employees.

Brendan Quinn, Student (University), Ireland, Member
I'll look at both of those as I never considered them. Thanks

PM in Small Businesses
Stephan Szugat, Germany, Member
Hi Brendan, keeping performance management simple is king for small businesses.
It would be valuable to include immaterial values into consideration. Immaterial values are the motivation of the employees or the customer satisfaction and a lot more.
In my humble opinion it is very important to compare the business with other businesses to see if performance is good in comparison to other businesses in the same industry.
Just setup some KPI's and see how they evolve. In time small businesses could setup a target value for each KPI. This should keep them going. The target value should be adjusted from time to time.
A few years ago I have been involved in setting up a small KPI-dashboard. It was a summary of the most important KPI's for the business with values month beside month. KPI's included production lead time, on time delivery, illness rate and a lot more. That should be possible without any great investment (time and money) for every small businesses.

PM in a Small Organisation
Nancy Roggen, OD and Professional Development , United States, Member
I'm working on a PM project now and what we're trying is to create the sense of community that often comes from a smaller company. The real focus of performance management is to provide each individual with valuable feedback and coaching that shows them how they are doing relative to overall organization's purpose.
Identifying the right measures are important, but it is the one on one touch and provision of feedback that let's the colleague know what they are doing well and what they could do better using behavioral specific examples and observations.
I'm interested in hearing about your research.

Performance Management in a small organisation
Ceferino Dulay, Jr., Philippines, Member
Hi Nancy, our approach to performance management is similar. But I take a project approach using the annual specific objective of individuals as they relate to organizational objectives. Each so can have 2 components: project objective and learning objective. Approached this way, the activity is directed with a definite result and the superior and individual can work closely and openly.

Perfomance Management (PM) in Small Organisation
Monde More, Student (MBA), South Africa, Member
I have worked in small companies, PM does work and can be very effective. When you align the performance contracts with the BSC, you will not go wrong.
Remember too your organization has to be consistent and be disciplined in conducting PM.

Performance Management in a Small Organization
Ceferino Dulay, Jr., Philippines, Member
PM can be used in any size of organization. I think large companies use formal PM processes because of their size. What is important are the concepts behind PM - clear objectives and approach to achieving end results, identifying required resources, players, timetable, risks and countermeasures, collaborative work, etc.
Which is basically a project management approach and which has already been proven for projects of all sizes and does not have to be complicated. It would be interesting to see what results you will get if you compare the processes used by small and large organizations.
I would think that the concept is the same but the process is more informal in a small organization.

PEM in Small & Medium B2B Organizations
Frederick Hamnett, Business Consultant, Italy, Member
Hi Brendan, we believe there is a lot to develop in this sector. So we are developing an innovative telematics model that will allow small and medium B2B organizations to monitor those critical processes that generate value for their clients.
In the model, any process will be considered for each of its more important activity and each activity will be considered as an (or more) indicators.
So the model will measure the performance of each activity of any considered process by using two dimensions:
1. Indicator's intensity (given from the client)
2. Indicator's importance (always given from the client)
By mean of sending to the clients of telematics questionnaires and their compilation, the model receives by internet the answers and analyses them in real time given a feed-back at level of single client - marketing segment - clients' group - area -... for each process you want to control.
So the organization is able to monitor systematically its market by discovering weak points and to engage by exception dissatisfied clients before to lose them.

Performance Management in SME’s
Anneke Zwart, Student (University), Netherlands, Moderator
In developing managerial practices for advancement in performance management (PM) systems, SME’s must not adopt the same practices as MNE’s or other large organizations; rather they should find methodologies stay in line with the managerial culture of SME’s which is different from that of large enterprises. Ates et al. (2013) mention three key areas of intervention for improvements in PM:
1. Planning: One of the great differences of SME and MNE is the ease to establish a vision and mission statement: SME’s have often problems with the identification of such statements. However, PM systems often start from determining and defining a mission and vision statement of an organization, a top-down approach that implicitly assumes that those statements are well-defined. Although this works perfectly in large organizations, since they have a clear and well-defined mission and vision statement, it will bring about difficulties for SME’s. A bottom up approach in which PM starts by guiding managers to firstly clearly define mission and vision could be a better way for SME’s.
2. Communication is necessary for developing your performance. Therefore, the second area for intervention has to do with both internal and external communication process of SME’s since these are often weak in SME’s. To elaborate, these processes are often characterized by a command and control management style in which short term change is difficult and in which management practices are often distorted. It is therefore necessary to create more empowered and information-based organizations in which managers should be committed to the continuous development of management practices.
3. Planning and communication of internal/external change management: SME’s are characterized by a more internal and short-term focus on planning; no focus on change. If top managers do not care about effective change management, this will certainly affect PM. In this case, it is better for SME’s to adopt a long-term view in which managers should pro actively drive changes rather then waiting until external, factors force the company to change.
Source: Ates, A., Garengo, P., Cocca, P. and U. Bitici. (2013). “The Development of SME Managerial Practice for Effective Performance Management.” Journal of Small Business and Enterprise Development..

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