Strategy and Employee Part2

ACCA P5 Advance Performance Management



Employees are key resource of an organisation. Organising this resource input flexibility into the system to operate with different mixture of machine, money and other resources. It is possible simply by managing (monitoring and controlling) employees. This starts with identifying the nature of employees.
McGregor - Theory X & Y is good model to understand employees’ behaviour and attitude. This theory categories employees into two group X and Y. Category X consist of employees (individually or in group) who need tight monitoring and control (i.e. are lazy, motivated by money and selfish). Employees who are self-motivated, responsible and creative who does not requires full time close observation are classed as category Y. Knowing the behaviour of individual and group it will be easier for management to formulate strategy to control them.
Managing Employees:

Ø  Team formation – employees organised together to perform specified task. The team dissolves once the objective is achieved. If not it proceed with another task.

Ø  Group formation – two or more employees with common ideologies organised together where any employees can join and leave the platform at any time.

Ø  Leader – directs and control activities of members/participants

Today employees are seen as intellectual capital. Intellectual capital represents knowledge which can be used to create value. Employees are warehouse of skill, experience, education, knowledge, relation and inherent aptitude which generates wealth to organisation.

Ø  Knowledge workers: Knowledge workers are prime assets of organisation. Mostly, service sector organisation hold high proportion of knowledge workers. E.g. doctors, engineer, teacher, accountants. Success of such organisations depends upon knowledge and performance of employees. Unlike in products their experience, knowledge and reputation cannot be duplicated. Therefore they are termed as intellectual capital.

Ø  Appraisal of employees: Appraisal sets performance objectives, acts as motivator, sets rewards, identifies gaps and sets target.

Ø  Vroom expectancy theory state motivation to achieve a goal i.e. FORCE relies on employees’ realization on the value of goal (the strength of individual desire for an outcome) i.e. VALENCE and their distance to achieve the goal (the probability that they will achieve that outcome) i.e. EXPECTANCY. Simplifies as FORCE = VALENCE * EXPECTANCY

Acquisition, retention, development and dismissal of employee: Check article “Human resource management and the appraisal system”


Employees and ethics: Ethics is inherent to every individual’s conduct. But, the degree of application of ethical norm depends upon understanding, behaviour and attitude of employee. So, appraisal system should evaluate ethical issues in employees’ conduct.

MStrategic importance of employee:

Ø  Different models like SWOT can be used in strategic positioning of human resource

Ø  Different strategies choices regarding HRM are considered at second step

Ø  Finally, the best suit strategy is implementation

Within suitability, acceptability and feasibility HR relates to feasibility of a project.

ACCA Article: Strategy and people


ACCA Article: Human resource management and the appraisal system