Theory and Action Research on a new Framework and Approach of Performance Management

Today, the activities relevant to performance management (PM) can be found in every corner of business, and its importance could be described by a famous business motto that whether a company measures its workforce in hundreds or thousands, its success relies solely on performance. Despite its importance as an enabler of successful business, some issues and shortcomings still exist in the performance management research and its implementation, which can be largely categorized into two main challenges.

The first challenge is reflected in the PM dilemma of SMEs. Most existing PM frameworks focus on mechanistic organisations of significant size, yet small and medium enterprises, which comprise 99 percent of business in the UK and 94.15 percent in China, benefit little from the extant PM research. The second PM challenge is combining PM with business and management process innovations. Even for an organisation with simple operating cores, current PM frameworks provide little guidance on how to introduce innovations during performance management system (PMS) building up and management. This issue further causes difficulties in managing performance in complex operating cores, which is exemplified by the challenges of carrying out PM in an R&D unit.

The above challenges are quite typical and should be dealt with in the level of performance management framework. We believe that existing PM frameworks are not built around an organisation's performance generation processes and therefore may not be able to handle many issues effectively, including those outlined above. Thus, the research objectives of this thesis are to develop a PM framework that is built around performance generation and also has mechanisms to address the above issues. Furthermore, we need to develop implemental approaches within the framework that can effectively deal with these challenges in real business cases.

To accomplish the aforementioned research objectives, a comprehensive typological literature review was carried out to analyze the characteristics and features of the existing PM frameworks. Next, based on the literature research, a new PM framework, namely as the performance tree (PT) framework was introduced in Chapter five, which focuses on the performance generation processes of organisations and also contains mechanisms to accommodate different approaches for a wide range of organisations. In addition, two implemental approaches of PT frameworks were developed in the thesis for the sake of solving the pressing PM issues in SMEs and R&D unit.

This research has the following four main contributions:

1. A significant research gap was identified that the existing PM frameworks largely ignored the procedures of performance generation which could lead organisations to be near-sighted, unsustainable, and even experience strategic failure.

2. A new performance management framework, PT framework was developed in this thesis. The PT framework adopts a performance-based perspective to explain performance generation and management processes; also it contains mechanisms to accommodate different approaches for a wide range of organisations seeking to handle the pressing PM issues

3. An implemental approach of PT for classic Chinese manufacturer SMEs was developed in the thesis. Comparing with the existing PM approaches, the new one fully considers the managerial and operational characteristics of SMEs, such as fast-changing organisational chart and high demand for organisational adjustments.

4. An implemental approach of PT for Chinese R&D units under was developed in the thesis. The approach considers both the characteristics of R&D management and the specific PM needs, and hence a PMS in accordance with core operation of R&D units can be developed under its guidance. Meanwhile, a behavioural evidence-based performance measurement system is accommodated in the approach to better measure and evaluate R&D staff's performance.