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All About Business (AAB) is a marketing consultancy business based in Melbourne. AAB specialises in consultancy activities relating principally to creating marketing campaigns and implementing marketing strategies. AAB enjoys a good reputation in these two areas of specialisation. However, competition is strong in the marketing consultancy industry, and many domestic and international consulting firms have now entered it. AAB employs highly qualified and experienced staff, whose time is charged out to clients on an hourly basis. Their clients expect high quality service delivery and around- the-clock availability to consultants, and this includes weekends. Given that rival consultancies may be operating from different time zones, AAB has been reluctant to change their clients’ expectations. AAB has been highly innovative in the last few years, with several of its consulting staff building upon their areas of expertise and knowledge to develop new opportunities in AAB’s consultancy portfolio. These new areas are in social media marketing and brand management. AAB’s three senior partners hold monthly performance meetings. At these meetings, they discuss budget performance and pay particular attention to comparing actual performance versus budgeted performance for revenues and profit. They also review their market share and the feedback they obtain from monthly client surveys. They pay their consultancy staff an annual salary plus individual bonuses based upon a team manager’s assessment of each individual consultant’s performance and achievement of targets throughout the year. Team managers set the targets for the consultancy staff, and it is rare for a consultant to miss out on a bonus. The three partners receive a fixed salary and a bonus based on the overall annual business profits.
Required: Critically evaluate All About Business’s process of performance review and target setting. Recommend an alternate performance management control system that integrates objectives with other elements that are key to an organisation’s successful implementation of strategy. Identify your assumptions, and provide your reasons for the design of your control system. (Note: a comprehensive answer is required.)
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