AbstractManagers are key drivers to the success of an organisation and a reliable performance measurement and reward system is necessary to evaluate the performance of each of the managers. The appropriate performance measures and rewards are motivational tools that will guide them towards the goals of the organisation. These may lead them to be more innovative and satisfied managers who are valuable to their organisations. They may also inspire the other employees in the organisation to work harder (Anthony et al 2014).
The volatile, uncertain, complex and ambiguous (VUCA) environment contributes to the difficulty in setting suitable performance measures and rewards to evaluate and reward managers effectively. The system must influence the managers’ behaviour as it is strongly connected to successful business outcomes such as innovation, productivity, and profitability (Roe 2019) and enable managers ‘to seize opportunities and react quickly’ (Bourne 2021, p. 7314) to changes in the VUCA environment.
This research examined the performance measures and rewards used to evaluate and reward line managers in Singapore. The mixed method approach was adopted with in-depth interviews which provided rich insights to the system and supported by the online cross-sectional questionnaire survey that was used to measure and examine the performance measurement and rewards systems of line managers working in Singapore.
The research found half of the Singapore line managers surveyed were neither satisfied nor dissatisfied with the performance measurement and reward system, 36% were satisfied, 3% very satisfied and 10% dissatisfied. 47% of those surveyed were found with performance measures that remained unchanged even though the operating landscape had changed. When
changes were made to the performance measures to adapt to changes in the operating environment, the line managers surveyed were 10.6% more satisfied with the performance measurement system.
The performance measures that found to be more likely to be effective to motivate managers were profits, process improvements, projects on time and on budget, revenue, return on investment and economic value added are more likely to be effective to motivate managers, while performance measures: efficiency, market share, meeting budgets, new customers acquired, new ideas, new products and costs are less likely to be effective to motivate the managers. It was found that there were few performance measures and rewards for creativity, innovation and for taking on risks in the organisations surveyed.
The main contribution from this research is the ‘Adaptive Key Performance Measurement Model’ (AKPM) to improve the performance measurement system in the challenging and changing environment. The model includes the ‘Adaptive Key Performance Indicators’ (AKPIs) that include the ‘Adaptive Budget’ and other AKPIs that measure creativity, innovation, risk taking and adaptability to changes. The objective is to make the performance measurement system more relevant and effective so that managers are motivated to perform better to meet the challenges in the VUCA environment.
The research concluded with evidence that not enough had been done to keep the performance measurement and reward systems up to date to motivate managers to meet the challenges and changes in the volatile, uncertain, complex and ambiguous (VUCA) environment. It requires the AKPM model, a proactive model to motivate managers to take on new opportunities together with the risks, innovate and adapt to the VUCA environment. The performance measurement system is recommended to be named the ‘Strategic Adaptive Performance Measurement System’ (SAPMS).
|Date of Award||Apr 2023|
|Supervisor||Chris Aulich (Supervisor) & Doug Davies (Supervisor)|