Perf ormance Management
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Transcript of Perf ormance Management
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Performance Management
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The very essence of performance management is to drive improvement in a targeted area and usually performance measures will be identified which monitor progress towards the selected target levels.
Fundamental Performance Management Principles
The Improvement Imperative
CriticalSuccessFactors
CurrentPerformanceStandards
EmergingPerformanceStandards
AvailableResourceMeasures
TargetedPerformance
Improvements
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The heart of effective performance management is an infrastructure of "fit for purpose" performance measures.
The quality criteria which will be used to ensure fitness for purpose of these measures take the form of the "10 Point Test" as recommended by Neely, Adams and Kennerley in their definitive work on performance management "The Performance Prism" published in 2002.
Fundamental Performance Management Principles
The 10 Point Test
Fit for PurposePerformance Measures
TRUTHFOCUS
RELEVANCE
CONSISTENCY
ACCESS
CLARITY
SO WHAT
TIMELINESSCOST
GAMING
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The PMI should be regularly reviewed & judgement formed on the deployment signature of each performance measure reviewed, thus identifying the performance measure categories clearly.
This will assist the understanding of the performance measure mix in the current Performance Management Infrastructure (PMI) and enable strategic judgements to be made on the desired future shape of the performance measure category mix.
Fundamental Performance Management Principles
Regular Analysis of Performance MeasureDeployment Signatures
The Performance Management Infrastructure
analysed by deployment signature
81 28 18 17 11
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The quality criteria discussed previously are designed to ensure that individual performance measures are fit for purpose. However, if the Performance
Management System is to function properly, then performance measures need to be collected and interpreted in coherent groupings.
Fundamental Performance Management Principles
Coherent Groupings of Performance MeasuresPMPPMP
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Fundamental Performance Management Principles
Performance Perspectivesshould be balanced within the PMI
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"So they [Baldwin's Government] go on in strange paradox, decided only to be undecided, resolved to be irresolute, adamant for drift, solid for fluidity, all-powerful to be impotent".
Sir Winston Churchill (1874 - 1965)
Fundamental Performance Management Principles
a Declared StrategicPerformance Management Focus
Focus on Aspirations
Focus on Targets
Focus on Improvements
Focus on Exceptions
“Acting on Facts” published in May 2002, by the Audit Commission, reinforces Churchill’s quotation and gives Stanley Baldwin a few belated clues as to how his team’s performance could have been improved
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The imperative to formulate targets, if performance management is to occur, places significant demands on the Performance Management System.The central issue being - On what basis should targets be set?
"Ah, but a person's reach should exceed their grasp, Or what is heaven for?”
Robert Browning (1812- 1889)
Fundamental Performance Management Principles
Browning wrote more poetry than almost any other English poet, all wonderfully
intense and original and of an uncompromisingly high standard.
a Deliberate & Determined Setting of Targets
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Sometimes less is moreException Reporting is the order of the day
""We now had an accounting department full of people who only stopped cranking out numbers to pick up their pay checks. We had so many damn numbers, inside so many damn folders, that no one was looking at them. But no one would admit it. Everyone just bluffed their way through meetings, pretending to be familiar with every detail". Ricardo Semler, CEO of Semco, in his book "Maverick!"
Fundamental Performance Management Principles
” Maverick” was published in 1994 and is the story of Ricardo Semler and his
extraordinary company.
Staff set their own wages, production levels, purchases and all have access to
the financial books.
It may sound ridiculous, but the staff are happy, production is high and staff
turnover very small.
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Performance Managementis not an Annual Event
Fundamental Performance Management Principles
ACCOUNTABILITY MANAGEMENT
MONTHLYReport
WEEKLYReport
BIANNUALReport
QUARTERLYReport
ANNUALReport
Reporting Frequency & Audience
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""Without tradition, art is a flock of sheep without a shepherd. Without innovation it is a corpse.” Sir Winston Churchill (1874 - 1965)
Fundamental Performance Management Principles
Innovation delivers Step Change
Driving Improvement
Whilst performance management provides an infrastructure which initiates, nurtures and realises improvements the driving force behind the improvement potential of an organisation is dependent on a number of factors which are independent of the performance management infrastructure itself namely: -
· Innovative capacity
· Appetite for change
· Risk Appetite
· Bias for Action
The first three of these factors heavily shape the target setting function that in turn defines the degree of improvement being attempted.The last factor, a bias for action, significantly influences the distance of the improvement horizon and the ability to implement improvement action plans.
Benchmarking, with external bodies and with oneself over time, is a tangible activity which promotes improvements in all four of these factors since it allows access to what others do and how they have made it work.
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Quantitative NOT QualitativeApproach
"When you can measure what you are speaking about, and express it in numbers, you know something about it; but when you cannot measure it, when you cannot express it in numbers your knowledge is of a meagre and unsatisfactory kind." William Thomson (Lord Kelvin)1824-1907
Fundamental Performance Management Principles
Lord Kelvin was one of the founders of modern
physics, probably the greatest applied scientist of
the Victorian era.
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Be choosey about your Performance Measures
"Not everything that can be counted counts, and not everything that counts can be counted."
Albert Einstein 1879-1955
Fundamental Performance Management Principles
Albert Einstein's pithy comment is probably the most popular quotation used in Performance Management today
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Focus on what matters
The Hawthorne EffectMayo discovered that in the main when some activity or performance measure was first measured it improved, just because it was getting some focus.
These studies were conducted at the Hawthorne Works of Western General Electric and therefore this automatic improvement which usually follows the initial measurement of an aspect of performance has been known as the "Hawthorne Effect" ever since.
Fundamental Performance Management Principles
In the late 1920's and early 1930's Elton Mayo conducted a series of now famous studies that examined the human, social,
motivational and emotional factors affecting industrial employees'
performance.
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"Art does not reproduce the visible; rather, it makes visible.”
Paul Klee, Swiss Artist (1879 - 1940)
Fundamental Performance Management Principles
14Making the Facts Visible
is no mean feat
Paul Klee was born in Munchenbuchsee, Switzerland in
1879. He studied art at the Munich Academy of Fine Art (1898-1901) and
later became associated with the Blaue Reiter group. Artists in the group believed that they had a responsibility
to "heal the gaping wound that separates man from his environment”.
Making the Facts Visible
The principle of exception reporting is key, if the important facts are to be made visible in performance management reporting.
According to Audit Commission research a number of approaches to exception reporting have been adopted by Local Authorities, e.g.: -
• Only including performance measures in reports if they are off target by a certain amount
• Producing separate schedules (such as beating targets, close to targets and not achieving targets)
• Using visual differentiators such as traffic lights, smiley faces or stars.
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BVPP’s17% pf LA’s
Had reservation expressedre missing or inaccurate PI’s
CorporateApproach
50% of LA’sFind it difficult to develop one or to set meaningful
targets
PerformanceManagement
Auditor made recommendations
In 60% of LA’s
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Fundamental Performance Management Principles
The State of the Art is Poor
Extracted from “Acting on Facts” published in May 2002 by the Audit Commission.
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ABSENCE of a PERFORMANCE CULTURE
Need an ENLARGED PI BASKET
Poor DATA QUALITY
Collection NOT an end in itself
Need EXCEPTION Reporting
Poor TIMING & PRESENTATION
Fundamental Performance Management Principles
Extracted from “Acting on Facts” published in May 2002 by the Audit
Commission.
Perceived Failings 161616
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use informationthroughout the year
a balancedset of Indicators
a clear audit trailfrom raw data to PI
performance manage projects
17Key Success Factors
Fundamental Performance Management Principles
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TOO AMBITIOUSno connection
withcurrent performance
Demotivating
TOO TIMIDfocused onmonitoringstatus quo
Incremental Change
FOCUS on key prioritiesto Achieve Deep & Durable Change
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Setting Ambitious but Realistic targets is an essential balancing act
Fundamental Performance Management Principles
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19
Fundamental Performance Management Principles
Generatethe RIGHT
Info
DoThe RIGHT
Things
AC
TIO
N F
OC
US T
IMIN
G F
OC
US
PEOPLE FOCUS
COLLECTION FOCUS
Give it tothe RIGHT
People
Atthe RIGHT
Time
Monitoring & Actingupon performance management information 1919
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the Building Blocks ofeffective performance management
Source: - Public Services Productivity Panel compiled from a body of research conducted in 2000.
Fundamental Performance Management Principles
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21the Importance – Performance Matrix
Fundamental Performance Management Principles
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Focus on what is ImportantFocus on what is ImportantThe Important / Performance MatrixThe Important / Performance Matrix
WORKS MANAGEMENT
Complaints Appeals
DE
LIV
ER
Y B
AY
RENEWALS
NEW CLAIMS
RAW MATERIALSSTORE
RAW MATERIALSINSPECTION
RENEWALS
NEW CLAIMS
CUSTOMERS
CU
ST
OM
ER
SNE W CLAIMSPRODUCTION UNIT
RENEWAL CLAIMSPRODUCTION UNIT
CUSTOMERSERVICES
QUALITYCONTROL
TRAINING
RESEARCH &DEVELOPMENT
ENGINEERING& MAINTENANCE
AUTOMATED PRODUCTION& INFORMATION SYSTEM
ACCOUNTING & AUDIT
SALES &MARKETING
LANDLORDSTHE COUNCIL
CENTRAL GOVERNMENT
COMPREHENSIVE PERFORMANCE
ASSESSMENT
BENEFITS FRAUD
INSPECTION
BEST VALUE
INSPECTION
EXTERNAL
AUDIT
1 2 3 4Benefits …?
1 2 3 4The Council …?
Report & Action Plan Reports on Specific Reviews Interim & Final Audit Reports
The BENEFITS Works
RAW MATERIAL DELIVERY SYSTEM
£
£
New Claims Renewals
Further Information
2222
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