"Managing Strategic PerformanceIntroductionPerformance management in simple words is measuring the whether the performance of theemployees have reached the desired or the expected level of the organization. Performancemanagement process also ensures that the individual goals of the employees are in alogn with theorganization goals, as the performance of the employees must help the organization to attain itsmission, which makes Strategic performance management indispensable. CompanyLuxcars Australia has its headquarters in Brisbane, Australia. Luxcars has manufactured sportscars since 1968. After nearly 47 years, Luxcars attempts to redesign its performancemanagement system.IssuesThe new performance management system and the issues arising as an effect of the attempt hasbeen analyzed ad possible solutions have been discussed in detail in this analysis report. Aftercarefully analyzing the case study the following issues have been identified;? The first and foremost reason for unhappiness employee is resistance to Change, theemployees have been very comfortable with the old performance management systemand introduction of the new performance system.? The old performance management system was conducted early once but the newperformance management system was happening every quarter. ? The cost of new performance management is also not very favorable from theorganization perspective. ? Performance management system must be designed to fulfill the needs of theorganization and must imply with organization strategic objectives. In this case itsunclear whether the new performance management was designed taking the nature of joband organization business segment into consideration. Analysis Old Performance Management SystemIn the old performance management system method, the employees set their goals every year.The in mid of the year their performance is reviewed based on their goals set at the beginning ofthe year. Final assessments after the performance review and a performance score for theemployees are released by the end of the year. Pros:? Employees have their freedom to set their goals. ? Mid-year review provides six months’ time to the employees to work towards theirachieving their goal? The final score for the review is released only once and at the end of the year it is givento the employees.Cons:? The old performance management system of Luxcars is very old performancemanagement method? This process seems to very long and only once the performance score is given, the shortterm performance of the employees can ? This performance system doesn’t clearly state whether the organization goals are takeninto consideration or not. New Performance Management SystemIn the new performance management system the performance review happened every quarter. Pros:? Appraisal is conducted every three months which is good, because short term goals of theorganizations can be analyzed. ? Managers and employees insights are collected from all plants at the same time. Cons:? The feedback comments of Employee about the new performance management systemshowed that they weren’t satisfied with the system. ? Performance review every three months once is Time consuming? Appraisal seems to be happening all around the year. Not providing time to employees towork on the feedback from the review. ? The Luxcars have mentioned that the current performance management system is costingthem a lot nearly 160% when compared the old performance management system.Recommendations:With regard to Luxcars performance management system, the management wanted to get rid ofthe old performance management system which they have following for decades to brin in a newsystem and they have attempted to follow another organization’s way, “This initiative wasdesigned to adopt a new trend in performance management, following companies like Seek, thatis said to be moving towards informal, ongoing reviews over traditional annual appraisals.”Performance management system must be very specific to the needs of the organization. Thesector of the organization, nature of business, work flow and many other factors have to be takeninto consideration before recommending a performance management system. Failing to do thishas been the root cause for receiving negative comments during the Luxcar feedback survey forthe new performance management system. The next major setback of the current performance management system is the regular interval ofthe performance review. My suggestion would be change the quarterly review to half yearlyreview which would provide time to employees to work on their reviews and enhance their skillsand competence to achieve their individual goals and the organization goal.Group Performance: Most often organizations fail to recognize the team performance as a whole.The Group success must be acknowledged and the performance of the individual as a team mustalso be reviewed for effective performance management. Performance management activity includes Performance appraisal and Performance Feedback;In luxcars, in the old performance management system, the performance appraisal method usedwas, “Appraisal by immediate line manager (LM) or downward appraisal”. In the downward appraisal method, the manager and employee meets in person to discuss theperformance of the employee. Examinations frequently adjust a scope of goal and subjectiveassessment criteria. Regularly, the director takes after a predefined assessment arrangement andscores the representative in various occupation related execution territories. This score mayincorporate numerical appraisals or subjective contribution by the manager. Having analyzed about the setbacks and the Luxcar can attempt to redesign their performancemanagement system taking the Balance Score Card method into consideration. Balance Scorecard method covers all the major perspective of the organization;1. Financial Perspective2. Customer Perspective3. Internal Operation Perspective4. Learning PerspectiveThe Balanced Scorecard mechanism attempts to translate an organization’s vision and strategyinto a set of objectives and performance measures. It takes all the four important aspects of thebusiness into account, it considers both short term and long term goals of the organization, henceI strongly believe that this mechanism would serve as the blueprint in designing the newperformance management system of Luxcar. Thought I would like to suggest Luxcar to use a 360 degree appraisal. The method is very timeconsuming and costly. As Luxcar is looking for an informal and cost effective appraisal method,I would suggest Luxcar the Downward appraisal method and Self-appraisal method. By usingthis method the manager can review both the performance based on their individual objectivesand organization objective. And as already pointed out, the current performance managementsystem reviewing employees performance every three months is time consuming, hence theinterval of the review can be reduced. Performance review can be done every six months once,which would satisfy the needs of all. The Balance Score card can help the management indesigning the appraisal form by taking all four important aspects of business into consideration.Let’s check whether the following features of the performance management system is present inthe suggested performance management system;This new performance management system would be strategic as it would be designed takingBalance Score card method into consideration. This method can be integrated. This method is acontinuous process. This suggested method is Specific to the organisation. This method isdefinitely Flexible and as the method suggested is downward appraisal, this method is certainlyOwned and delivered by line managers Performance management must ensure using various interventions so that the individual or groupdelivers maximum output under the circumstances given. Taking into consideration andfollowing the above mentioned steps would aid Luxcar in managing the performance ofemployees in the most effective manner. The process must be monitored and evaluated time totime to enhance the effectiveness of the system. Well planned and executed performancemanagement system would ensures smooth transitioning from old performance managementsystem to new performance management system in Luxcars."