Page 252 - DCOM506_DMGT502_STRATEGIC_MANAGEMENT

Strategic Management

Notes investments. Training involves employees acquiring knowledge and skills that they will be
able to use on the job.
There are two key factors to develop successful training programmes in organisations. The first
is planning and strategising the training. This involves four distinct steps:
1. Needs assessment
2. The establishment of objectives and measures

3. Delivery of the training
4. Evaluation
The second key factor is to ensure that desired results are achieved or accomplished. Training
needs are to be integrated with performance management systems and compensation.
13.4.4 Performance Management

An organisation’s long-term success in meeting its strategic objectives rests on managing
employee performance and ensuring that performance measures are consistent with the strategic
needs. One purpose of performance management systems is to facilitate employee development.
A second purpose is to determine appropriate rewards and compensation, which must be clearly
linked to achievement of strategic goals.

13.4.5 Compensation and Rewards

Organisations face a number of key strategic issues in setting their compensation and reward
policies and programmes. These include:
1. Compensation relative to the market
2. Balance between fixed and variable compensation
3. Appropriate mix of financial and non financial compensation
4. Developing an overall cost-effective compensation programme that results in high
performance.
In addition to these strategic issues, the fast pace of change and the need for organisations to
respond in order to remain competitive create challenges for all HR programmes, but particularly
for compensation. Organisations should revaluate their compensation programmes within the
context of their corporate strategy and specific HR strategy to ensure that they are consistent
with the necessary performance measures required by the organisation. Overly rigid
compensation systems inhibit the flexibility needed by the company’s competitive strategies.
HR strategy must encourage creativity to meet strategic objectives. Therefore, compensation
systems must ensure that behaviours that help achieve strategic objectives are appropriately
rewarded.

13.4.6 Industrial Relations

Industrial relations is a key strategic issue for organisations because the nature of the relationship
between employees can have a significant impact on morale, motivation and productivity.
Consequently, how organisations manage the day- to- day aspects of the employment relationship
can be a key variable affecting their ability to achieve strategic objectives.

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