Performance Management Essay

FC High Tech Manufacturer (FCH) - Introduction

FC High Tech Manufacturer (FCH) is one of the leading headphone manufacturers in East Asia. The company consists of his three main divisions: Headphone Manufacturing Division, Manufacturing Outsourcing Division, and Enterprise Solutions Division. Despite the company's success over the last decade, it still faces challenges from a lack of productivity diversity and intense market competition from its peers. The recent recession in the economies in which we operate has weakened consumer confidence and ultimately reduced demand for our products. This white paper focuses primarily on the Balanced Scorecard and how it can be instrumental in the enhancement of the performance as the potential difficulties that the company may face upon implementation of the balanced scorecard.

Discussion

Essence of the balanced scorecard in performance management

A balanced score card is a strategic management system that is used in the health organizations to align the business processes to the goals and objectives of the organization, improve internal and external communication and improve the productivity of the organization. A balanced scorecard is characterized by focusing on the characterized agenda of the concerned company, selection of a small data item on the areas of focus and the use of both financial and non-financial data (Martocchio, 2011). The balance score card was proposed by Kaplan and Norton. The balanced scorecard has over the years evolved to one of the most used management frameworks in most of the organizations across the globe. In various organizations, the balanced scorecard collects and analyzes the performance data, and compares actual results with the desired performance. The strategy also aligns the organization to the goals and visions that are set. Finally, the balanced scorecard aims at developing effective measures and standards and establishing both the long-term and short-term targets.

Benefits of implementing the balanced scorecard in FCH

The implementation of the balanced scorecard within the FC High Tech Manufacturer (FCH) will be instrumental in the enhancement of the performance management of the company in various ways. First and foremost, it will be easier for the company to keep track of its revenues across a given period. Under the revenue recognition, it will be easier for the management to identify the division that is yielding more revenue to the company as well as the division that is drugging the company behind in terms of revenue generation (Martocchio, 2011). The increase in the revenues for a firm is dependent on the demand for the products as well as the strategies used by the company to increase the demand for their products. Using a balanced score card, the management team will find it easier to go through the feedback provided by consumers and come up with products that meet their tastes and preferences. In so doing, this can help in enhancing the performance of the company in terms of revenue generation (Kesselman, Wood, & Hagen, 1999).

The initiation of the performance management plan into the organization will be a focal point towards the success of the organization. In most cases, under the balanced scorecard, the employees in the organization will be motivated to conduct their duties in the most effective manner, and this leads to the increase in the productivity of the organization (Martocchio, 2011). The employees are well informed about the roles they have to play in the organization, and due to the good coordination in the company, a good working relationship is enforced. With the coordination of the employees, as a part of the benefits of the balanced scorecard, the company will enjoy an increase in its performance compared to its rivals in East Asia.

The use of the balanced scorecard can also be instrumental in cutting down the costs of production for the FC High Tech Manufacturer. Costs of production are a key determinant on whether a company will benefit in terms of an increase in its net profits or will face challenges of reduced profitability levels. The management will have to embrace a balanced scorecard in the determination of the factors that contribute to the increase in the company's costs of production (Kesselman, Wood, & Hagen, 1999). The management will then come up with measures that will be instrumental in cutting down the costs (Managementstudyguide.com, 2015). The measures include cutting down on the utility bills, focusing on market segmentation as a strategy to reduce the costs that the company incurs in marketing its products. Finally, the management can also approve the inventory purchase from those suppliers that sell their stock at an affordable price. The high stock purchase price may also contribute to the reduction in the profitability of the company due to the high costs incurred (Kesselman, Wood, & Hagen, 1999).

Implementation of the balanced scorecard in FCH and the potential difficulties

A successful implementation plan for the balanced scorecard in the FCH Company is dependent on various factors. First and foremost, the managers of the organization have to ensure that there is effective communication (Baker, Jensen & Murphy,1988). Effective communication leads to appropriate delegation of duties. On the other hand, the employees have to provide feedback on the tasks that they are assigned. The managers of the organization need to engage the members of the company in a persistent coaching to ensure that their skills are sharpened (McKeown, Kerry, and Olynyk, 2017). The employees also have to be engaged in the decision-making process to ensure that they feel like a part of the organization.

In the quest for the implementation of the balanced scorecard within the FCH, the management will have to set up goals and objectives on how the system will be vital in the enhancement of the company's performance management. It is vital for the organization to ensure that it sets up both the short-term and long-term objectives (Managementstudyguide.com, 2015). The essence of the goals and objectives is to ensure that the FCH organization increases its productive levels and cuts down on the costs of production that it incurs from time to time. The next step entails evaluating the environment of the FCH organization, and this is usually followed by setting up quantitative targets. The assessment of the company's environment makes it easier for the management team to come up with measures that give the company a competitive edge over its rivals in the market (Bain.com, 2015). The organization also needs to aim in context with the divisional plan and this it has already done through its four operative divisions. Finally, upon the implementation of the balanced scorecard, it will be necessary for the management to ensure that it conducts a performance analysis followed the choice of the strategy. This will focus on ensuring that all the four divisions of the FCH Corporation are streamlined towards increasing their productivity.

There are various potential difficulties, however, that the company will experience upon its implementation of the balanced scorecard. One of these difficulties is the incompatibility of the set systems to the company's operations. The lack of compatibility of the balanced scorecard to the operational systems of the FC High Tech Manufacturer (FCH) will make it hard for the company to increase its performance management. Clearly, this implies that the organization will go back to the old systems that have yielded the companies lower than expected productivity.

The method may also come along with various technical flaws, and this means that it will be difficult for the company to achieve its set objectives of ensuring that it enhances its performance management. In the event of technical flaws, it will be difficult for the company to cut down on the expenses that reduce the overall profitability of the firm (McKeown, Kerry, and Olynyk, 2017). The firm will also find it hard to meet the consumer demand for its products.

Conclusion

Based on the above argument, it is clear that the implementation of the balanced scorecard will be vital in enhancing the productivity and performance of the company. Performance management includes the activities that ensure that goals in the organization are continuously met. In the quest for an improvement in productivity, organizations have to ensure that their employees derive satisfaction from their tasks. In so doing, this leads to increase the productivity of the companies. It should, however, be noted that implementation of the balanced scorecard may be faced with challenges of incompatibility and failure to meet the set objectives. All in all, with the various operational divisions within the FCH Corporation, the use of the balanced scorecard will be vital in ensuring that the company increases its productivity and that it enjoys a competitive advantage over the rival firms in the market.

References

Bain.com,. (2015). Management Tools - Balanced Scorecard - Bain & Company. Retrieved 22 November 2015, from http://www.bain.com/publications/articles/management-tools-balanced-scorecard.aspx

Kesselman, G., Wood, M., & Hagen, E. (1999). Relationships between performance and satisfaction under contingent and  noncontingent reward systems. Journal of Applied Psychology, 59(3), 374-376.

Managementstudyguide.com,. (2015). Steps in Strategy Formulation Process. Retrieved 22 November 2015, from http://www.managementstudyguide.com/strategy-formulation-process.htm

Martocchio, J.J. (2011). Strategic compensation:  A human resource management Approach (6th ed.). Upper Saddle River, New Jersey: Prentice Hall.

McKeown, W., Kerry, M., and Olynyk, M. (2017). Financial planning. Milton, Qld.: John Wiley and Sons Australia, Ltd.