Strategic Performance Management Report: Aussie Healthy Foods Company

This report provides an in-depth analysis of strategic performance management, focusing on the case of Aussie Healthy Foods. The essay begins by introducing the concept of strategic performance management and its importance, highlighting how it is used to assess the overall performance of a company. It then provides background information on Aussie Healthy Foods, including its products and the recent restructuring of its performance management system. The report defines performance management and explores the benefits of implementing a robust performance management system within an organization. It delves into various theories of performance management, including the expectancy theory, goal-setting theory, control theory, and justice theory. The essay examines the problems encountered by Aussie Healthy Foods in relation to these theories, such as the negative impact of the control theory and time wastage. Finally, the report offers recommendations for improving the company's performance management system, including creating an action plan and clearly defining goals and objectives. The report concludes by emphasizing the importance of an effective performance management system for an organization's operations and the building of a strong relationship between employees and employers.

Managing Strategic Performance 1
MANAGING STRATEGIC PERFORMANCE
By
Course
Professor
Institution
City and State
Date

Managing Strategic Performance 2
Performance Management
Introduction
This essay focusses on strategic performance management basing on Aussie Healthy
Foods Company. It provides a highlight of the importance and impact of the performance
strategies used to assess the overall performance of this firm (Mone and London 2018). There
has been an attempt made with aim of understanding and evaluating the effectiveness attained
by performance plan which encompasses motivation of employees as well as ensuring that
their operations remain in context to the firm’s strategic objective. Aussie Healthy Foods
Company deals with the manufacture of breakfast cereals, sandwich spreads, breakfast
beverages, and meat and dairy alternatives.
Information about the company
Aussie Healthy Foods is a company which is located in Australia with its
headquarters being in Melbourne in Australia. The Chief Executive Officer (CEO) of the
Aussie Healthy Foods is Ms Carter who has been in that position for the last ten years.
According to Ms Carter, the company has been performing relatively better for the last ten
years which she has been the Chief Executive Officer. The Aussie Healthy Foods deals with
products such as breakfast beverages, breakfast cereals, dairy and meat options and finally
sandwich spread since the year 1980. In the year 2016, the Aussie Healthy Foods made a
decision to reconstruct its performance management system with an aim of improving its
performance. Before the Essie Healthy Foods had decided to re-build its performance
management system, the employees were being asked by the Company management to set
their own performance objectives every year in January. Aussie Healthy Foods was
established for the purposes of supplying dietary goods throughout the country (Kerzner
2017). Dietary foods promote a healthy life, minimizes the risk of chronic sicknesses such as

Managing Strategic Performance 3
cardiovascular disorder, type 2 diabetes and other forms of cancers and finally, it reduces the
danger diet-related disorders such as obesity, high blood pressure and high levels of
cholesterol. Therefore, due to the demand for healthy foods by the general public in
Australia, the company is able to make more profits and to compete effectively in the market
with its competitors.
Definition of Managing Strategic Performance
Performance management is a fixation of an organization’s objectives in regard to the
skills of its employees, the agreed measures, development plan, competency, delivery of
skills and results. Managers work hand in hand with their employees in the process of
monitoring, reviewing, and planning the contribution of an employee to the company as well
as objectives of their work. Performance management stresses on development, learning and
improvement so as to meet the organization’s desired goals by ensuring a labour force that is
productive. This process was established six decades due to a dire need to justify payments
made to employees in organizations and developing their knowledge and skills (Kearney
2018). Some of the employees happened to be receiving more pay in comparison to their
contribution to the company in that their payments outmatched their labour productivity. On
the other hand, some employees were unfairly compensated.
Importance of performance management
Performance Management is the process of determining and evaluating the real results
and comparing similar with scheduled outcomes. Performance management stresses on the
necessity for continuous improvisation through maintenance of a strong communication
network among the managerial personnel and the junior employees (DeNisi and Smith 2014).
The system of performance management within an organization connects the employees’
code of conduct and the firm’s set objectives through outlining the performance in the setting

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of those objectives. Performance management systems involve the process of monitoring by
the firm’s management on the attainment of the company’s goals by the junior employees. To
ensure an effective monitoring, immediate response on matters regarding the achievement of
the company’s goal is required by both the managers and the workers. Individuals’ within the
organization should ensure that the give responses regarding matters necessary for the
company’s attainment of its goals in advance and also incorrectly as the information is one of
the necessities on performance improvement within the organization.
Theories of performance management
The various theories of performance management include; the expectancy, goal
setting, control and justice theories of performance management. The expectancy theory was
projected in the year 1964 by Victor Vroom (Cardy and Leonard 2014). Expectancy theory of
performance management is grounded on the hypothesis which people adjust their code of
conduct within the organization in relation to the anticipated fulfilment of valued set
objectives. The theory of expectancy lies beneath the notion that performance is subjective to
the expectations regarding future occurrences.
Goal setting theory was projected in the year 1968 by Edwin Locke (Podgórski 2015).
Goal setting theory proposes that goals established by an individual worker play a significant
part in one’s motivation for an improved performance as workers tend to follow goals which
they themselves have set. In case the set goals within the company are not met, goal
modification or performance improvement may be undertaken to ensure that the goals are
met in the long run.
Control Theory of Performance Management. This theory emphasizes on the control
mechanism which is supposed to be adopted at all levels of a firm. An organisation can
decide on the form of control to use in attaining desired results. These forms include

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organizational structure, behavioural controls and performance measurement mechanisms.
Control theory holds different control system types. Behavioural Control entails monitoring
and evaluating an employee’s actions by the employer on a regular basis in accordance with
an organization’s standards and issuance of reward where necessary. Output Control involves
control of an employee’s performance through sanctions or rewards after its evaluation in
regard to the organization’s standards. On the other hand, Input Control system tends to take
control of selection as well as the training process required for fulfilment by an employee. It
is upon the organization to select the system which it deems suitable based on the norms,
structure, administrative information and policies it upholds thereof.
Justice Theory of Performance Management. This theory focuses on the extent in the
assessment of employees’ perceptions in accordance to a company’s performance
management system (Daniels et al 2011). These performances are influential to behaviour
and attitudes of employees which can either pose a positive or negative impact on their
performance as well as the company at large. There exists a positive correlation between job
satisfaction and organizational justice in that a better employee perception of the company
would yield to a higher level of satisfaction of the corresponding employee. An organization
has to ensure that organizational justice is practised with an expected yield of loyalty and
confidence amongst employees.
Problems Encountered in Relation to Theories
Aussie Healthy Foods Company adopted Control Theory by choosing to monitor the
behaviour of its employees. Employees developed a negative feeling in return towards the
company’s mode of assessment as they viewed it to be coercive. The aspect of justice in an
organization postulated by Justice Theory seemed to be violated where employees lost their
previous job satisfaction with their perception of their organization changing. This led to poor

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performance on the part of the company’s production level registering an increase of 160% in
its production costs, despite other companies who had adopted the same system registering a
reduction in their production costs.
Time wastage is one of the problems at Aussie Healthy Foods on their redesigning of
the performance system of management (Buckingham and Goodall 2015). Redesigning of the
performance management system facilitated to regular check-in by the managerial personnel
than they were before the system redesigning for the purposes of discussions on employees
performance. Constant check-in contributed to poor performance within the Aussie Healthy
Foods as employees not satisfied. According to the theory of goal setting, individuals would
work to their capabilities to ensure better performance if they set their own goals to drive
them without constant check-ins by the management.
Wastage of resources is another problem at Aussie Healthy Foods on their
performance system restructuring. The resources such as capital and time that are a necessary
factor in improving the performance of the organization are being misused instead of being
directed towards the business goals achievement. In our scenario, we are told that the
management spent a lot of time in holding discussions with the employees regarding their
performance. Also, the new system leads to Aussie Healthy Foods to incurring extra costs
which exceeded the original cost by 60%.
Recommendations
Creation of an action plan
The organisation ought to decide on changes which are relevant to its operation and
adopt necessary measures as evaluated. Moving from the present situation to the desired one
should adopt a plan developed by the evaluating committee (Tarí et al., 2017). The addressed
changes may be important or not, but what matters is the initiation of the company into

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current technology so as to maintain its competitiveness in the market for its goods and
services.
Definition of Goals
Goals and objectives that direct the company should be clearly stated and consistent
all along (Halligan et al., 2015). In the case of restructuring the organization’s performance
management system, the adopted criteria should be in context to the goals and objectives to
avoid change of the organization’s production course. Failure to adhere to stipulated goals
would be detrimental to the organization as the efficiency of resources would not be met.
Conclusion
An effective Performance Management System is a predetermining force to an
organization’s operations and performance (Shields et al., 2015). A strong bond is built
between the employee and employer where both focus on playing the roles allocated to them
from the organization and maximizing the welfare of one another in the process. Many
people tend to oppose performance management as it exposes their labour productivity to the
management. It should be noted that a poor performance management system may be quite
adverse to the employees as well as the organization’s operations.

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References
Buckingham, M. and Goodall, A., 2015. Reinventing performance management. Harvard
Business Review, 93(4), pp.40-50.
Cardy, R. and Leonard, B., 2014. Performance Management: Concepts, Skills and Exercises:
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firm-level performance: A review, a proposed model, and new directions for future
research. The Academy of Management Annals, 8(1), pp.127-179.
Kearney, R., 2018. Public sector performance: management, motivation, and measurement.
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