Strategic Performance Management-ESPM Model

Employee quality-oriented strategic performance management: ESPM model

Abstract In the era of information economy, performance management must reflect strategic characteristics, and employee quality is the fundamental prerequisite to ensure the realization of corporate strategies. , needs to be reflected in the performance management process and results. Based on the analysis of the key performance indicator method and the balanced scorecard method, we build an employee quality-oriented strategic performance management system - the ESPM model. It starts with the career maturity of employees and is based on the identification of employee development potential. BSC is A strategic performance management system with cyclic development based on oriented KPI performance evaluation as the method and performance improvement as the purpose. Keywords: employee quality, strategic performance management, ESPM model

1. Introduction

Performance management system plays an important role in the internal control system of the enterprise and is the three pillars of the modern company control system ( Decentralized decision-making, performance management, compensation policy) one. On the one hand, the performance management system is the basis of the salary policy; on the other hand, the performance management and salary policy can restrain the disadvantages of decentralized decision-making and reduce implementation costs. Obtaining steadily improving business performance is the cornerstone of sustainable corporate development, and performance management is the key to modern corporate control systems. Traditional performance management is based on accounting standards and focuses on financial indicators. This system is profit-oriented and based on the evaluation of the current status of the company. It can neither reflect the contribution of non-financial indicators and intangible assets to the company, nor can it evaluate the company. The future development potential cannot fully meet the requirements of the enterprise's strategic development, the long-term interests of the enterprise are not fully reflected in management and control, and strategic improvements cannot be achieved in the overall operation of the enterprise. With the advent of the information age, the core value of enterprises and the acquisition of competitive advantages are no longer reflected in tangible assets. The basic source of enterprise value changes from tangible resources to intangible resources, which comes from human capital, corporate culture, information technology, and internal operating processes. The development and management of intangible assets such as quality and customer relations, all of which are determined by the quality of employees. Employee quality is one of the decisive factors in whether the corporate strategy can be realized. This requires that the performance management system must not only reflect the strategic nature, but also It reflects the orientation of employee quality and emphasizes employee ability, potential identification and development training. Enterprise managers should stand at the height of strategic management and make overall plans for the enterprise's development goals and ways to achieve them based on the consideration of the company's long-term survival and sustainable and stable development. Strategic management is the management of the formation and implementation process of corporate strategies, including the four links of corporate internal and external environment analysis, strategy formulation, strategy implementation, evaluation and monitoring. Performance management is the most important component of the evaluation and monitoring process. Therefore, performance management is a strategic management system. As an important part of human resource management, performance management should become the delivery system of corporate strategy. Through scientific and reasonable performance evaluation, corporate strategic ideas, goals, and core values ??are passed on to employees layer by layer, turning them into conscious behaviors of employees. And can continuously improve the quality of employees so that their behavior is conducive to the realization of corporate goals. 2. Strategic performance management theory and method There are two main strategic performance management systems applied in practice: key performance indicator method and balanced scorecard method. 1. The core concept of KPI (Key Performance Index) is to set standard values ??related to enterprise processes, define a series of indicators that have prompts, warnings and monitoring functions for enterprise development and operation, and then put the actual Compare and evaluate the actual values ??of relevant indicators in the business process with the set standard values, analyze the reasons, and find out solutions and approaches, so as to make corresponding adjustments and optimizations to the company's processes to improve future actual performance. The indicator value reaches a level that satisfies the enterprise. KPI points out that the setting of enterprise performance indicators must be linked to the enterprise's strategy. The meaning of "Key" refers to the most important goal to be achieved or the most important problem to be solved strategically at a certain stage.

In response to the fact that the company had just introduced Toyota's management system and the moral quality of its employees was low, JAC placed the core of performance management on the evaluation of employees' ethics and behavior and other indicators in the initial stage (2-3 years), and quickly improved the employees' moral quality. Quality, now, as corporate goals change, quality-related indicators have been placed in an important position. Every enterprise will encounter major problems that restrict its growth at a certain period. Solving these problems is the key to strategic significance at this stage. The performance management system must design key indicators for solving these problems. 2. Balanced Scorecard Method In 1992, Robert Kaplan and David Norton published "The Balanced Scorecard—A New Method for Performance Measurement and Driving" in the "Harvard Business Review" and proposed the BSC (Balanced Score) Card) method. BSC not only emphasizes the close relationship between performance management and corporate strategy, but also proposes a specific indicator framework system, including: (1) learning and growth; (2) internal management; (3) customer value; (4) finance. Learning and growth pay attention to the improvement of employee quality, long-term vitality and sustainable development of enterprises, which is the basis for improving the quality and ability of internal strategic management of enterprises; enterprises create greater value for customers through the improvement of their own management capabilities; customer satisfaction leads to the good performance of enterprises financial benefits. A scientific BSC is not only a collection of important performance indicators and important strategic driving elements, but also a series of causally linked goals and methods, reflecting the integration of corporate strategic goals and short-term performance goals (Figure 1). BSC not only has strong operability, but also reflects the compatibility between enterprise development and current conditions through the description of the internal relationships among these four aspects. In performance management, financial indicators are result indicators, while non-financial indicators are the driving indicators that determine result indicators. BSC not only emphasizes that the determination of indicators must include financial and non-financial indicators, but also emphasizes the management of non-financial indicators. BSC faces many difficulties that make it encounter setbacks in practice. First, it is difficult to create and quantify indicators. It is relatively easy to set up and quantify financial indicators, but other indicators require the company's management to carefully prepare them based on the company's strategy, operating business, and external environment. Second, determining causation is complex. BSC requires identifying the relationship between outcomes and drivers, which in most cases is not obvious or easy to quantify. Finally, implementation is expensive. BSC requires enterprises to consider the implementation of strategic goals from four aspects: finance, customer value, internal management, learning and growth, and develop detailed and clear goals and indicator systems for each aspect. This requires the participation of all employees so that each department and each person has a balanced scorecard suitable for them, for which the enterprise has to pay a higher cost. 3. Employee quality-oriented strategic performance management system - ESPM model Strategic performance management requires full consideration of the impact of intangible resources such as the quality of the company's personnel, knowledge and skills on the sustainable development of the company. The development history of enterprises in our country is relatively short. Due to the lack of cultural foundation and professional skills, a team of high-quality employees has not yet been established, and the team of professional managers who have accepted the baptism of the true market economy is not yet mature. From this perspective, the quality of employees, which plays a decisive role in corporate development strategies, is at a low level in most companies and cannot guarantee the sustainable development of the company. In order to cater to the needs of the development of strategic performance management and the needs of sustainable growth of Chinese enterprises, it is of practical significance to establish an employee quality-oriented strategic performance management system. This article attempts to construct a set of employee quality-oriented strategies that start with employee career maturity evaluation, are based on the identification of employee development potential, use BSC-oriented KPI performance evaluation as the method, and achieve cyclic development with the purpose of performance improvement. Performance management system, as shown in Figure 2. (1) Enterprise human resources environment. The basis for the implementation of the ESPM model is the appropriate human resource management environment of the enterprise, including corporate culture, human resource management ideas, basic human resource management systems, etc. The human resource management idea that values ??employee quality (including abilities, skills and development) is ESPM basis for implementation.

At the same time, this model is necessarily based on the basic premise that all employees of the enterprise participate in performance management. The implementation process of performance management is no longer just the responsibility of the human resources department, but the responsibility of all enterprise personnel (including employees and managers). The role of human resource management Responsibilities are transferred down to everyone in the enterprise, and corporate strategy is transformed into the conscious behavior of corporate employees, realizing the strategic guidance of human resource management (including performance management). (2) Analysis of employee career maturity. Employee career maturity is the specific and current ability of employees to engage in a certain job. It is the realistic basis for achieving high performance and the beginning of the performance management cycle. Chinese enterprises have not experienced the baptism of early industrial civilization, and their employees' professional qualities and professional skills have not been honed and cultivated over a long period of time, and they lack professional awareness, professional skills and professional spirit. In our country's enterprises, the roles of managers are misplaced. The general manager does the manager's business, the manager does the employees' business, and the employees think about the general manager's business. The same mistake has been made countless times within the company, but the successful experience has not been disseminated; The reason why a job is repeated many times, there is no correct way to do it, and there is a lack of standardization is due to the low professional maturity of employees. Employee career maturity is the level of skills and knowledge required for employees to meet their needs and create high performance in specific positions. It is a visible behavioral manifestation. Professional employees are employees who understand the company's goals, clarify their responsibilities, and are able to voluntarily devote themselves to work, constantly improve work methods, and improve performance. A big difference between Chinese companies and foreign companies is the low career maturity of employees, which has directly restricted the development of the company. The professional maturity of employees is reflected in professional qualities, professional skills and professional behavioral norms. Abstract In the era of information economy, performance management must reflect strategic characteristics, and employee quality is the fundamental prerequisite for ensuring the realization of corporate strategies and needs to be reflected in the performance management process and results. Based on the analysis of the key performance indicator method and the balanced scorecard method, we build an employee quality-oriented strategic performance management system - the ESPM model. It starts with the career maturity of employees and is based on the identification of employee development potential. BSC is A strategic performance management system with cyclic development based on oriented KPI performance evaluation as the method and performance improvement as the purpose. Keywords employee quality strategic performance management ESPM model 1. Introduction The performance management system plays an important role in the internal control system of the enterprise and is one of the three pillars of the modern company control system (decentralized decision-making, performance management, and salary policy). On the one hand, the performance management system is the basis of the salary policy; on the other hand, the performance management and salary policy can restrain the disadvantages of decentralized decision-making and reduce implementation costs. Obtaining steadily improving business performance is the cornerstone of sustainable corporate development, and performance management is the key to modern corporate control systems. Traditional performance management is based on accounting standards and focuses on financial indicators. This system is profit-oriented and based on the evaluation of the current status of the company. It can neither reflect the contribution of non-financial indicators and intangible assets to the company, nor evaluate the company. The future development potential cannot fully meet the requirements of the enterprise's strategic development, the long-term interests of the enterprise are not fully reflected in management and control, and strategic improvements cannot be achieved in the overall operation of the enterprise. With the advent of the information age, the core value of enterprises and the acquisition of competitive advantages are no longer reflected in tangible assets. The basic source of enterprise value changes from tangible resources to intangible resources, which comes from human capital, corporate culture, information technology, and internal operating processes. The development and management of intangible assets such as quality and customer relations, all of which are determined by the quality of employees. Employee quality is one of the decisive factors in whether the corporate strategy can be realized. This requires that the performance management system must not only reflect the strategic nature, but also It reflects employee quality orientation and emphasizes employee ability, potential identification and development training. Enterprise managers should stand at the height of strategic management and make overall plans for the enterprise's development goals and ways to achieve them based on the consideration of the company's long-term survival and sustainable and stable development. Strategic management is the management of the formation and implementation process of corporate strategies, including the four links of corporate internal and external environment analysis, strategy formulation, strategy implementation, evaluation and monitoring.

Performance management is the most important component of the evaluation and monitoring process. Therefore, performance management is a strategic management system. As an important part of human resource management, performance management should become the delivery system of corporate strategy. Through scientific and reasonable performance evaluation, corporate strategic ideas, goals, and core values ??are passed on to employees layer by layer, turning them into conscious behaviors of employees. And can continuously improve the quality of employees so that their behavior is conducive to the realization of corporate goals. 2. Strategic performance management theory and method There are two main strategic performance management systems applied in practice: key performance indicator method and balanced scorecard method. 1. The core concept of KPI (Key Performance Index) is to set standard values ??related to enterprise processes, define a series of indicators that have prompts, warnings and monitoring functions for enterprise development and operation, and then put the actual Compare and evaluate the actual values ??of relevant indicators in the business process with the set standard values, analyze the reasons, and find out solutions and approaches, so as to make corresponding adjustments and optimizations to the company's processes to improve future actual performance. The indicator value reaches a level that satisfies the enterprise. KPI points out that the setting of enterprise performance indicators must be linked to the enterprise's strategy. The meaning of "Key" refers to the most important goal to be achieved or the most important problem to be solved strategically at a certain stage. In response to the fact that the company had just introduced Toyota's management system and the moral quality of its employees was low, JAC placed the core of performance management on the evaluation of employees' ethics and behavior and other indicators in the initial stage (2-3 years), and quickly improved the employees' moral quality. Quality, now, as corporate goals change, quality-related indicators have been placed in an important position. Every enterprise will encounter major problems that restrict its growth at a certain period. Solving these problems is the key to strategic significance at this stage. The performance management system must design key indicators for solving these problems. 2. Balanced Scorecard Method In 1992, Robert Kaplan and David Norton published "The Balanced Scorecard—A New Method for Performance Measurement and Driving" in the "Harvard Business Review" and proposed the BSC (Balanced Score) Card) method. BSC not only emphasizes the close relationship between performance management and corporate strategy, but also proposes a specific indicator framework system, including: (1) learning and growth; (2) internal management; (3) customer value; (4) finance. Learning and growth pay attention to the improvement of employee quality, long-term vitality and sustainable development of enterprises, which is the basis for improving the quality and ability of internal strategic management of enterprises; enterprises create greater value for customers through the improvement of their own management capabilities; customer satisfaction leads to the good performance of enterprises financial benefits. A scientific BSC is not only a collection of important performance indicators and important strategic driving elements, but also a series of causally linked goals and methods, reflecting the integration of corporate strategic goals and short-term performance goals (Figure 1). BSC not only has strong operability, but also reflects the compatibility between enterprise development and current conditions through the description of the internal relationships among these four aspects. In performance management, financial indicators are result indicators, while non-financial indicators are the driving indicators that determine result indicators. BSC not only emphasizes that the determination of indicators must include financial and non-financial indicators, but also emphasizes the management of non-financial indicators. BSC faces many difficulties that make it encounter setbacks in practice. First, it is difficult to create and quantify indicators. It is relatively easy to set up and quantify financial indicators, but other indicators require the company's management to carefully prepare them based on the company's strategy, operating business, and external environment. Second, determining causation is complex. BSC requires identifying the relationship between outcomes and drivers, which in most cases is not obvious or easy to quantify. Finally, implementation is expensive. BSC requires enterprises to consider the implementation of strategic goals from four aspects: finance, customer value, internal management, learning and growth, and develop detailed and clear goals and indicator systems for each aspect. This requires the participation of all employees so that each department and each person has a balanced scorecard suitable for them, for which the enterprise has to pay a higher cost.

3. Employee quality-oriented strategic performance management system - ESPM model Strategic performance management requires full consideration of the impact of intangible resources such as the quality of the company's personnel, knowledge and skills on the sustainable development of the company. The development history of enterprises in our country is relatively short. Due to the lack of cultural foundation and professional skills, a team of high-quality employees has not yet been established, and the team of professional managers who have accepted the baptism of the true market economy is not yet mature. From this perspective, the quality of employees, which plays a decisive role in corporate development strategies, is at a low level in most companies and cannot guarantee the sustainable development of the company. In order to cater to the needs of the development of strategic performance management and the needs of sustainable growth of Chinese enterprises, it is of practical significance to establish an employee quality-oriented strategic performance management system. This article attempts to construct a set of employee quality-oriented strategies that start with employee career maturity evaluation, are based on the identification of employee development potential, use BSC-oriented KPI performance evaluation as the method, and achieve cyclic development with the purpose of performance improvement. Performance management system, as shown in Figure 2. (1) Enterprise human resources environment. The basis for the implementation of the ESPM model is the appropriate human resource management environment of the enterprise, including corporate culture, human resource management ideas, basic human resource management systems, etc. The human resource management idea that values ??employee quality (including abilities, skills and development) is ESPM basis for implementation. At the same time, this model is necessarily based on the basic premise that all employees of the enterprise participate in performance management. The implementation process of performance management is no longer just the responsibility of the human resources department, but the responsibility of all enterprise personnel (including employees and managers). The role of human resource management Responsibilities are transferred down to everyone in the enterprise, and corporate strategy is transformed into the conscious behavior of corporate employees, realizing the strategic guidance of human resource management (including performance management). (2) Analysis of employee career maturity. Employee career maturity is the specific and current ability of employees to engage in a certain job. It is the realistic basis for achieving high performance and the beginning of the performance management cycle. Chinese enterprises have not experienced the baptism of early industrial civilization, and their employees' professional qualities and professional skills have not been honed and cultivated over a long period of time, and they lack professional awareness, professional skills and professional spirit. In our country's enterprises, the roles of managers are misplaced. The general manager does the manager's business, the manager does the employees' business, and the employees think about the general manager's business. The same mistake has been made countless times within the company, but the successful experience has not been disseminated; The reason why a job is repeated many times, there is no correct way to do it, and there is a lack of standardization is due to the low professional maturity of employees. Employee career maturity is the level of skills and knowledge required for employees to meet their needs and create high performance in specific positions. It is a visible behavioral manifestation. Professional employees are employees who understand the company's goals, clarify their responsibilities, and are able to voluntarily devote themselves to work, constantly improve work methods, and improve performance. A big difference between Chinese companies and foreign companies is the low career maturity of employees, which has directly restricted the development of companies. Employees' professional maturity is reflected in professional qualities, professional skills and professional behavioral norms. For performance management, in view of the current level of human resources in Chinese enterprises, it is necessary to set corresponding professional standards within the enterprise for employees at different levels and different occupational categories, establish corresponding professional behavior modules, and clearly describe the requirements of different modules professional behaviors, and formulate key performance indicators accordingly, guide employees to cultivate their own professional behaviors in accordance with the requirements of modular behaviors and personal development paths, and gradually improve their professional maturity level. Job analysis and job responsibility descriptions are basic tasks for establishing employee professional standards. Before benchmarking and comparative design, scientific job analysis and job descriptions need to be conducted for the corresponding job categories. The process of establishing employee professional standards is shown in Figure 3. (3) Identification of employee potential. Employee career maturity reflects an employee's current ability to perform a certain job, while employee potential creates the possibility for high performance and sustainable corporate development. Employee potential refers to potential comprehensive qualities such as knowledge level and work ability that are hidden in employees and have not yet been fully recognized or discovered.

From an individual employee's perspective, employee potential determines the employee's development direction and is also a determining factor in whether an employee can create high performance; from an enterprise's perspective, employee potential identification is a forward-looking assessment and is the key to realizing corporate development strategies and core competencies. The basis for employee matching, job analysis, job setting, personnel recruitment and training, etc. all need to be based on employee potential. Employee potential identification can enable a company's employees to present a reasonable distribution state, and even determine the future development of the company. In the process of corporate performance management, employee potential identification needs to be based on the professional behavior modules required for the position, and should be improved based on the key indicators of the corresponding modules. Employee potential includes the potential that can lead to high individual performance and the potential that ensures high team performance. Different positions require employees with different knowledge, abilities, and personalities. The matching of job responsibilities and personal abilities is the basis for high performance. Enterprises need to scientifically analyze the characteristics of employees required for specific positions based on the characteristics of the positions they set up. For example, the capabilities required by R&D personnel and customer service personnel are obviously different. R&D personnel need to have innovative spirit, team spirit, be willing to share knowledge and experience, and have a strong need for achievement; while customer service personnel need to have high affinity. , have good communication skills. In practice, the identification of employees' individual potential and team potential can be summarized into corresponding quality models, with the help of tools such as personality and needs scales, career orientation surveys, and management style surveys. Philips' employee potential identification considers four aspects: thinking ability, work efficiency, social skills and work ability, while Lenovo Group evaluates employee potential by providing instructors for new employees. (4) Strategic KPI performance evaluation system based on BSC. The strategic KPI performance evaluation system based on BSC has the following characteristics: First, it is oriented toward the organization's strategic goals, breaking through the limitations of the traditional KPI system that is oriented toward the organization's annual financial goals. Second, organically combine the organizational strategy with department responsibilities, provide the organizational management with the performance of each department in a timely and accurate manner, and each department evaluates the actual performance of its employees, which can urge employees, departments and the organization as a whole to be consistent, and promote the organization Move forward. Third, it is closely integrated with the enterprise's comprehensive budget. The organizational comprehensive budget is the benchmark for formulating a strategic KPI system, making the organizational strategy, resource allocation, business and action plans an organic whole. Fourth, include metrics that measure the organization's key processes. By measuring horizontal processes involving multiple departments that are closely linked to strategy, we can better solve the assessment problem of assessment indicators related to multiple departments, thereby promoting collaboration and cooperation between departments. The strategic KPI system based on BSC is a composite hierarchical structure. In the vertical direction, it is roughly divided into three levels: organizational level, department level and position level. The specific number of levels is related to the organizational structure. At each level, KPIs are divided into different levels according to the degree of summary of the content. The top level of the strategic KPI system is the organization's strategic KPI system, which corresponds to the entire organization and is the decomposition of the organization's strategy; the second level is the different departments in the organization, each department corresponds to a strategic KPI system, and finally It is a position, and it is "one position, one table", that is, one strategic KPI system for one position. Set corresponding KPIs according to the different quality and potential requirements of employees at different levels and positions. (5) Performance improvement and enhancement. Performance management is a process of gradual improvement. This improvement is not just improvement after a round of performance evaluation (essentially backward feedback), but continuous improvement during a round of performance management (a kind of process feedback). practical significance. Performance improvement must combine improvements during the process with improvements after performance evaluation to more effectively improve performance levels. At present, the improvement after performance evaluation is relatively mature and will not be repeated here. In practice, some companies have gradually placed the improvement of this round of performance in an important position during the performance management cycle, which has practical significance for improving corporate performance levels. Some companies have launched a mid-term report system to achieve process feedback through mid-term reports and turn performance appraisal into a management process. The mid-term work report has several functions. First, employees provide and share experiences and lessons with each other.

The debriefer summarizes and extracts the main lessons and achievements in daily work, and communicates them, so that knowledge and experience can be generated endogenously, allowing everyone to share knowledge and experience, improving the quality of employees, and realizing it in the next work. Performance improvement. Second, analyze the objective environment and the situation of competitors, identify problems and propose performance improvement plans, turning performance into a dynamic adjustment process. Third, seek support in the process of improving performance and turn the entire enterprise into a support service system. The practice of these companies on the mid-term work report system has proved that this is a successful attempt, and the current work report may not only happen once. This method turns the assessment of key performance indicators into a dynamic process, turning the performance assessment process into a learning process and an effective means of employee self-development, which not only effectively achieves employee knowledge accumulation and quality improvement , and makes performance management more practical. (6) Form a cyclical performance management process. The ultimate goal of performance management is to turn the entire performance system into a management cycle. ESPM is based on employees' current career maturity level, from the formulation of plans and goals to performance communication, helping employees formulate action plans, constantly evaluating and developing employee potential, and forming a strategic performance evaluation system based on BSC to integrate different levels , the key requirements for employee quality and potential in different positions are placed in the performance appraisal system, and it can realize two improvement plans during the performance management process and after the evaluation results appear, strategically improve employee quality, and ultimately form a reasonable and smooth corporate strategy The performance management cycle continuously promotes the quality and performance level of enterprise employees to a higher level. 3. Conclusion Strategic enterprise performance management system is a need for the development of modern enterprises. It can more effectively mobilize intangible resources such as enterprise personnel, knowledge, and skills to achieve long-term survival and stable development of enterprises. The ESPM performance management system is based on the emphasis on intangible factors such as employee quality. It starts from employees, the fundamental source of performance, and extends the starting point of performance management to the identification and assessment of employees' existing abilities and potentials. By improving employees' career (the combination of knowledge and skills) to improve the overall performance of the enterprise, which is a manifestation of infusing strategic management thinking into the performance management process (the quality of employees is the foundation for realizing corporate strategy). The purpose of ESPM is to achieve the continuous improvement of employee quality and corporate performance, and to make performance management a cyclic process of continuous improvement.

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Employee quality-oriented Strategic performance management: ESPM model Xia Yamin and Zhai Yunkai