Performance management strategies: a competitive advantage for high technology firms: a study in the Okanagan Valley Region of British Columbia, Canada

Abstract

High technology firms are important to economic growth. A key factor in survival and growth of these firms is the attraction and retention of qualified workers. This exploratory research compares how high technology firms use performance management strategies to gain a competitive advantage and, at the same time, investigates the role of human capital. The eight high technology firms selected for study are located in the Okanagan Valley region of British Columbia Canada and each was pre-qualified as a small or medium-sized enterprise - two with 10 to 19 employees, four with 20 to 49, and two with 50 to 200. For this research, eight high technology case studies were constructed from interviews with the firms' managers. Single and multiple case analyses examined performance management processes from the perspectives of: integration with business strategy, application to business performance, use by managers and supervisors, and linkage with human resource and reward practices. The findings indicated that these firms have a well-developed understanding of performance management but opportunities for executing strategies with this process are weaker. As well, those firms with human resource managers have a distinct employee focus, whereas those without emphasise firm performance. The results also indicate that all firms view superior technology and customer service as their common differentiating qualities; nevertheless, human capital was endorsed as either a competitive advantage or an integral component. Regardless, performance management has potential for greater role in the crafting and executing of strategy than these firms employ. Further, although culture and change are high priorities to these firms, none are capitalising fully on the cultural and change elements inherent in performance management processes. The conclusions for managers are threefold; a) to develop and implement formal strategic plans, b) to integrate performance management and human resource practices, and c) to build a human capital pool that sustains their firm's competitive advantage. From a theoretical perspective, the implications are twofold: a) performance management is a bridge for executing strategic planning and realising a competitive advantage and b) principal value of human capital is in its capability to sustain a firm's competitive advantage. The findings and their implications offer high technology managers and future researchers a useful framework for growth and research respectively.