Case Study: Organizational Performance Management of Marks and Spencer

This case study analyzes the organizational performance management of Marks & Spencer, a major British multinational retailer. It examines their performance management system, emphasizing employee performance and productivity, and the methods used to evaluate performance. The study covers risk management strategies, quality management practices, and the importance of customer and stakeholder perspectives in driving profitability and sales. It also delves into financial performance, including turnover, profit, and debt-to-equity ratios, as well as key financial metrics. The analysis highlights the company's approach to communicating performance to stakeholders, risk management, and quality management. The study concludes with recommendations for improvement, focusing on areas such as employee welfare, customer satisfaction, and continuous improvement initiatives. The analysis underscores the importance of maintaining transparency, adapting to market changes, and focusing on customer needs to achieve sustainable organizational success.

CASE STUDY ON ORGANIZATIONAL
PERFORMANCE MANAGEMENT
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Table of Contents
Introduction to the case study organization .........................................................................................3
Organizational Performance Management and Performance Measurement .......................................3
Communicating Performance to Stakeholders ....................................................................................4
Risk Management ................................................................................................................................4
Quality Management and Improvement...............................................................................................5
Financial Performance .........................................................................................................................5
Customer and Client Perspectives .......................................................................................................6
People Perspectives .............................................................................................................................7
Implementation Issues .........................................................................................................................8
Recommendations for Improvement ...................................................................................................8
References..........................................................................................................................................10
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INTRODUCTION TO THE CASE STUDY ORGANIZATION
Performance Management is the technique through which business entity analyzes
performance of the organization with the help of different parameters and standards (Zumitzavan
and Michie, 2015). The present research study has been emphasizing on organizational performance
management aspects of Marks and Spencer which is a major British multinational retailer in the city
of London. Performance aspects of the business entity helps the organization to analyze the areas
where improvements are required. In the present research study, performance management system
of the business entity has been discussed along with the methods that aids in evaluating
performance criteria of the organization. Further, in the study, researcher has discussed risk
management areas and along with that, discussion has also been made on quality management of
Marks and Spencer.
Customers of the business play crucial role in the organization and that assists the
organization to raise the level of profitability and sales. In all the business decisions, Marks and
Spencer ensures that they are engaging all the stakeholders in appropriate manner and this also
retains the interest of all the organizational people (Uluskan, Godfrey and Joines, 2016). After
evaluating performance of the organization, several recommendations have been made so that
overall organizational aspects can be improved. Customers and clients of Marks and Spencer are
satisfied because with the help of organizational standards, the business is delivering prominent
share of profits and revenues to the associated people.
ORGANIZATIONAL PERFORMANCE MANAGEMENT AND PERFORMANCE
MEASUREMENT
Performance Management System of Marks and Spencer is typically emphasized on
employee performance and productivity aspects. Organizational Performance Management is the
process of ensuring that company's resources are being properly used in pursuit of the determined
aims and objectives; however the concept of performance management is commonly applied to
employee development (Shields and et.al., 2015). Organizational Performance aspect includes
different dimensions such as employee performance, resource management aspects, organizational
profitability and success and customer base of the business. While evaluating organizational
performance of Marks and Spencer, the manager always consider long term sustainability, revenue
and profitability facets (Robbins, Judge, Millett and Boyle, 2013).
According to the view points of managers of Marks and Spencer, Performance Management
is a joint process that involves both the supervisor and the employees who perform their job roles
according to organizational aims and objectives. Therefore, performance management is a process
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of directing and supporting employees to work as effectively and efficiently as possible in line with
needs of the organization (Mahmoud, Mahmoud and Ibrahim, 2015). Performance measurement is
the way or technique through which organizational performance standards can be identified and
through which capabilities and productivity of the organization can be identified. For instance- in
order to measure performance, Marks and Spencer allocates resources in optimum manner which
also aids the business entity to minimize the degree of resource wastage.
COMMUNICATING PERFORMANCE TO STAKEHOLDERS
Marks and Spencer adequately communicates with the stakeholders so as to give all the
requisite information to the associated people regarding company's financial performance and
productivity dimensions (Jones and George, 2015). The business believes to maintain transparency
in all the financial statements because stakeholders also invest in business resources and work
practices. Marks and Spencer is committed to improve customer engagement over the next two
years which also helps the business to explore new and innovative for engaging people more in
business prospects. With the help of financial statements and business reports, proper
communication can be developed among the stakeholders regarding organizational performance
aspects (Carneiro-da-Cunha, Hourneaux and Corrêa, 2016).
It is essential for Marks and Spencer to communicate financial aspects with all the
stakeholders because the ratio of dividend is dependent on all such aspects. Performance
development aspects is necessary to communicate with all the associated people because that can
only assist in identifying the areas of improvement. In regards to this, direct as well as indirect
modes of communication are used by the business entities which also aids in keeping evidence of
each aspect of the company (Boxall, Guthrie and Paauwe, 2016). Similarly, Marks and Spencer
includes all the employees in decision making process so that each and every person can present
valuable advice and opinion for company's profitability and success.
RISK MANAGEMENT
It is an apparent fact that organizational dimensions of Marks and Spencer are associated
with risk facets; thus for such purpose, the organization has developed several strategies for risk
management. Loosing the customer base is the basic risk which organization has been experiencing
because of large pool of competitors engaged in the same market place (The 3 Biggest Risks Facing
Marks & Spencer, 2012). There are various business entities that have been working in the same
ground; hence the level of competition augments accordingly. Thus, prior entering into any market
place, Marks and Spencer analyzes the areas where risks might occur. Further, at the time of
introducing new and innovative product, risk of failure generates; however to mitigate such risks,
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Marks and Spencer focuses on developing more creativity in the product aspects. Hence, risk
management aspects of the business clearly emphasizes on all those areas that might hamper
business success and prosperity (Bititci and et.al., 2012). Therefore, from the discussion, it is clear
that risk management aspects could impede financial value of the business. Looking towards this
aspect, Marks and Spencer has raised the concern towards competition and product categories.
QUALITY MANAGEMENT AND IMPROVEMENT
Marks and Spencer is a global multi-channel retailer that produces all sorts of services for
the customer segments. The business entity is committed to deliver quality products and services
and this is the sole reason, client base of the organization is augmenting. Total Quality Management
is the only approach that is adopted by Marks and Spencer for the purpose of mitigating all sorts of
errors and defects from products and services (Alfalla-Luque, and et.al., 2015). Quality
management helps Marks and Spencer to build the standard of services which enhances
sustainability aspects of the organization in competitive market place. Total Quality Management is
considered as a approach which describes long term business prospects and its value in customer
satisfaction. The process can be summarized as a management system for a customer focused
organization that involves all employees in continual improvement (Abdel-Maksoud and et.al.,
2015).
Thus, for quality management and development, Marks and Spencer is accentuating on
customer satisfaction and for that goods and services are delivered with prominent quality. In order
to improve quality dimensions, Marks and Spencer has been focusing on continuous improvement
aspects and for that chief concern of the business is towards protecting organizational standards and
productivity level (Jones and George, 2015). The business has also adopted integrated cultural
system in which all the employees have been focusing on producing quality services. In that realm,
managers of Marks and Spencer have been considering the approach of Kaizen where in several
new changes are introduced in the business entity for betterment. Since, it is a lean manufacturing
tool; therefore it encourages Marks and Spencer to facilitate improvements in quality, technology,
processes and productivity.
FINANCIAL PERFORMANCE
Since, Marks and Spencer Group plc is the holding company and it is also one of the UK's
leading retailers with over 21 million customers visiting the stores everyday. The business is
engaged in selling high quality and valuable goods to the consumers which also enhances financial
performance of the business entity (Marks & Spencer Group PLC, 2016). Turnover as well as profit of
the company has been increasing and this can be seen from the below mentioned table.
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Year Turnover £(M) Profit £(M) Basic Earning per
Share (EPS)
2016 10555 404 24.9
2015 10311 482 29.7
2014 10310 506 32.5
2013 10027 458 29.2
2012 9934 490 34.9
Thus, on the basis of the table, it is clear that turnover of the company has been increasing
from last five years which states that business is growing rapidly. From company's sources, it has
been identified that Marks and Spencer Group plc's current portion of long term debt for quarter
2015 was $ 546 million; however the value of long term in the year 2015 was $2665 (Mahmoud,
Mahmoud and Ibrahim, 2015). A high debt to equity ratio generally demonstrates that business
entity has been aggressive in financing its growth with debt. Further, market share price of Marks
and Spencer is also augmenting which increases the opportunities of expansion and diversification
in other market segments.
Latest share price (p) 355
Price Earning ratio 14.32
Net Gearing (%) 56.46
Gross Gearing (%) 59.38
Debt Ratio 45.96
Assets / Equity Ratio 2.46
Cash / Equity Ratio 7.19
Return on capital employed 7.67
Liquidity of the business is also increasing and that can be seen from the below mentioned
table. All the resources of the business are used for managing current business practices and this
also aids in deriving appropriate return from the capital invested (Carneiro-da-Cunha, Hourneaux
and Corrêa, 2016). Cash reserve ratio of the business is also increasing which enhances success and
sustainability aspects.
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Current Ratio 0.76%
Quick Ratio 0.38%
Liquidity Ratio 0.12%
Cash and Current Assets 15.43%
CUSTOMER AND CLIENT PERSPECTIVES
Customers of Marks and Spencer are satisfied with the services; therefore this improves
existing customer base and as a result, overall success aspects of the company increases.
Apparently, financial performance of the business has been accelerating because of improved
customer base; thus information about customer satisfaction can be derived from such facet (Marks
& Spencer Still Overvalued, say Analysts, 2013). For customer convenience, M&S offers full range
of services to the clients; thus over 40% of the customers prefer to buy products daily from M&S.
The business entity believes that innovation and creativity is required for customer satisfaction;
therefore for such aspects, chief consideration is provided towards development of new products
and services. Besides this, customer's complaints are highly entertained by the business especially
for the purpose of retaining them. Thus, it can be said that concern towards customer services and
convenience has helped Marks and Spencer to enhance profitability and revenue dimensions.
Clients of Marks and Spencer prefer to develop long term deals because the company is
consistently providing proper return on specific investment (Robbins, Judge, Millett and Boyle,
2013). This also increases the ratio of return on capital employed and on assets also. In the year
2015, Marks and Spencer has given 11.20% return on capital invested which further has accelerated
investor's interest in company's investment practices. ROE of the company is augmenting as per the
capital employed by the investors; hence it can be said that the overall profitability aspect of Marks
and Spencer is amending (Shields and et.al., 2015). Clients of M&S invests in business practices;
thus it enhances measure of efficiency; however it is crucial to note that when value of shareholder's
equity goes down, ROE goes up. Return level of the company is increasing; therefor clients of
Marks and Spencer are highly interested in investing in business practices.
PEOPLE PERSPECTIVES
Human resource management of Marks and Spencer have been conducting all their roles and
responsibilities in appropriate manner and this also increases organizational efficiency and
productivity aspects. The employees are directed to consider organizational standards and
parameters so that determined goals and objectives can be achieved within stipulated time period
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(Marks & Spencer upgrades its HCM platform to optimize HR processes and empower its workforce, 2016). For
employee motivation, monetary as well non monetary benefits are provided to the employees which
increases employee morale and as a result, they contribute in growth of business. For employee
welfare, health and safety facilities are there in the business which reduces the opportunities of
accidents and uncertainties. All the employees of Marks and Spencer have been focusing on ethical
and legal practices which directs them to deliver appropriate and quality amenities to the clients.
Human resources of M&S are motivated and encouraged enough which further assists them in
enhancing value of the organization (Zumitzavan and Michie, 2015).
Apart from this, Marks and Spencer also consider social facets and for that business chiefly
consider quality facets. Besides, social factors, M&S is greatly contributing in environmental
protection and development; thus for such aspect, use of plastic and poly bags has been reduced.
The organization has also developed proper environment and culture at the workplace so that
employees conflicts and grievances can be reduced (Uluskan, Godfrey and Joines, 2016). Moreover,
there is also a systematic procedure followed up at Marks and Spencer for resolving all the issues
arising in the realm of human resource management. This is also developing employee morale
level; moreover it generates different opportunities of team work. Strategic leadership is one such
aspect that assists the business entity and the employees to reach towards the aims and objectives.
Thus, from the above discussion, it is evident that Marks and Spencer has been focusing on
employee retention and for that better relationships are developed with all the workforce (Abdel-
Maksoud and et.al., 2015).
IMPLEMENTATION ISSUES
Changes have been implemented in human resource management in which training sessions
are scheduled for the employees so that they can learn different techniques to meet customer's
requirements and demands (Marks and Spencer – Facing the Challenges Ahead, 2016). Further, while
implementing such strategy, employees showed resistance because due to changes in the schedule
and also due to newly developed coaching sessions. Thus, employee resistance is the chief issue
that has been observed in organizational work practices. Marks and Spencer has been focusing on
human resource development; hence training sessions are organized for the same purpose; however
due to lack of support from the employees, challenges occurred in the business entity. Similarly,
while implementing this strategy, it is essential for the managers to derive optimum support and
collaboration from other associated people (Boxall, Guthrie and Paauwe, 2016).
RECOMMENDATIONS FOR IMPROVEMENT
On the basis of entire study, it can be said that performance aspects of Marks and Spencer
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have been improved from past several years. While measuring organizational performance, the
business entity must have to include all those dimensions that has direct impact on organization's
work facets. In order to improve organizational performance, Marks and Spencer should accentuate
on employee performance and their contribution in business growth and success (Alfalla-Luque and
et. al., 2015). Apart from this, employees should be encouraged to attend training sessions because
that assists in enhancing their capability level. It is the duty of HR manager to guide all the
employees regarding the optimistic aspects of training and coaching. There should be proper
communication among the employees so that they can share all the issues with the management
regarding performance measurement criteria.
HR manager of Marks and Spencer should ensure that adequate standards are developed for
evaluating performance of the workforce and there should not be any sort of comparison between
employee's capabilities and competencies (Mahmoud, Mahmoud and Ibrahim, 2015). Thus, in terms
of improvements it can be said that Marks and Spencer should determine measurement standards
and on that basis, employees should get rewards and recognition. The business has to specify
several targets and employees should perform all their responsibilities accordingly within stipulated
time period. Employee commitment can only be achieved when their performance is properly
evaluated and when they get suitable monetary and non-monetary rewards (Robbins, Judge, Millett
and Boyle, 2013). Thus, while measuring performance of the organization, managers of Marks and
Spencer must consider employee contribution in sales, profitability, customer base and other
prosperity dimensions.
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