Maximising efficiency in tough times

Content Summary

These tips are associated with high-performance businesses focused on maximising efficiency.

Strategic planning

A formal process for strategic planning and encouraging employees to be involved in idea generation is important for success during good times. In tough times, when you're focusing on maximising efficiency, you will be more successful with a less formal planning process that involves fewer employees.

Strategy implementation

Strategy should be implemented and managed using a combination of budgets and performance management systems, such as the Balanced Scorecard. Businesses focusing on maximising efficiency should use their budgets and performance management systems to monitor and manage deviations from targets, and hold staff accountable for achieving those targets.

Information sharing

Businesses should encourage collaboration between all levels of staff. This can be done using performance management systems. These systems may also encourage employees to focus on emerging business opportunities.

Measuring employee performance

Employee performance can be measured using a number of metrics, including quality of products and services, social responsibility, financial performance and customer satisfaction.

Employee compensation

Research indicates performance improves when a part of an employee's compensation is contingent on achieving of targets. Businesses with high performance management systems tend to favour objectively determined compensation based on short-term performance outcomes.

Organisational structure

Mechanisms to improve coordination across an organisation should include task forces, project committees and cross-functional teams. Employee autonomy is also considered important in an effective organisational structure.

For businesses focused on maximising efficiency, the structure should facilitate top-down management. This can be delivered through operating procedures and targets. Flatter management structures generally yield better results.

Management policies and procedures

Employee activities and the risks they take should be limited by a code of conduct and supported by sanctions for any breaches. Businesses should also consider reviewing, guiding and restricting employee action on projects. This can be achieved through frequent reviews conducted before projects begin, so a rigorous process approves allocating resources to new projects.

Human resources

If the values of individual employees are similar to those underpinning the business, then staff will be more likely to act in alignment with those objectives. The business should seek to hire employees with similar values and ensure an ongoing commitment to those values. To achieve this, the business could consider formally codifying and documenting their values, purpose and direction.

*These tips are taken from a collaborative research project between CPA Australia and the University of Technology, Sydney, titled Best Practice in Performance Management authored by David Bedford and Professor Teemu Malmi. At the time of writing this document, the research had yet to be published.