Professional Documents
Culture Documents
Facilitator
Adrian Brudan Organizational Performance Solutions Manager, Acumen Integrat Editor IndicatoridePerformanta.ro E-mail: adrian.brudan@acumenintegrat.ro
Aurel Brudan Measuring and learning with Key Performance Indicators, Melbourne, 19-20 January 2012 The KPI Institute Pty Ltd 2012
Performance Management is integral for the organization to achieve its goals. Need to understand where we are against organization objectives.
Necessary but really annoying to do. Performance management or PPDP as it's well known here is not done at regular intervals. Last time we had one done in our team was 12 months ago.
A waste of time. It seems that just doing a good job and concentrating on doing a good job is not enough for management to give you a CPI increase, you have to prove to them that you will jump thru hoops to make them happy. If you are good at sucking up to management then you will receive good reviews, if you have no interest in progressing, but want to just be recognised for doing an excellent job, you are over looked.
Performance Management is like driving on a journey to a destination. The more information and feedback together with the most appropriate vehicle will get me and my colleagues to the destination in a faster, safer and fuel efficient manner. PMS is like a household, if all is done well it looks great and thigs are running well
Provision of a service without agreed performance management parameters is like navigating a ship without a radar. The ship may never reach its destination, may arrive late or damaged, because the pilot cannot effectively navigate it. Working on a sunny day - it can be frustrating while you're doing it but the rewards for getting finished are there if you make an effort.
Note: unedited comments from staff members
undigested via the latest MBA trend; story, meaning and intent instantly forgotten by everyone as soon as the show ends. Then do it all again next year.
Performance Mgt is like visiting a dentist - hopefully once a year and
everything goes back to the way it was before the diet began.
On performance management
When talking about Performance Management, what words come to your mind?
. Are all identified as tools used together, part of the Performance Management System.
Mapping the linkages and understanding them together are part of the redevelopment of the Performance Architecture, to make it clearer
Plenty of tools already in use. No silver bullet solution needed. Better structure, alignment, integration and use of what is already in place seems to be the answer to improve performance management practices.
Individual Level Individual performance plans Performance evaluations Performance conversations Personal Level Personal performance plans Performance reviews
System integration
Organisational Strategy
Outcomes
Balanced Scorecard is a strategic planning and management system, widely used in environments such as business, government and non-profit organizations worldwide, in order to align business activities to the organizations vision and mission, to improve internal and external communication, as well as to monitor organizational performance against strategic objectives. (The Balanced Scorecard Institute, 2010)
Balanced Scorecard means several things. The first meaning, given when it was first promoted in the beginning of the 90s, was that of an approach to generate a performance report, by grouping performance indicators into perspectives. The mostly used were: Financial, Customer, Internal Processes and Learning & Growth. Gradually, this management tool evolved into the base of a performance management system which uses performance plans at a strategic, operational and individual level as the basis for communication, monitorization and improvement of organizational performance. (eab group,
2010)
The best theoretical contribution in 1997 offered by The American Accounting Association (Norreklit, 2003).
Balanced Scorecard is the most successful tool used in the area of performance management.
In 2002, Balanced Scorecard was already being used by half of the first 1000 global companies. (Calabro, 2001).
Dashboard a management tool introduced in 1930 in France, by French engineers (Mohsen Souissi, 2008) and described as a dashboard, used by managers to guide organizations to their destination. (Bessire & Backer, 2005).
The Plan-Do-Check-Act Process (PDCA), which is the base of practical use of the Balanced Scorecard concept was introduced by Edward Deming in 1950.
Each manager, from the CEO to the production master or chief accountant, needs clearly set objectives. These objectives should establish which is the performance that the employees department needs to reach. (Peter Drucker, 1954)
Initially, Balanced Scorecard was the result of a research project carried out for a year, between 1990-1991, to determine the aspects which were measured and monitored by 12 successful companies in the USA. The study was carried out by Nolan Norton consultancy company, led by Dr. David Norton. Robert Kaplan was later brought on board, to offer more credibility and an economic dimension to the study.
Current state
Environmental Scan
Portfolio of Initiatives
Performance Scorecard
Performance Report
KPI Description KPI Trend Analysis
Initiative Description
The financial perspective. How do we satisfy the financial expectations of our stakeholders? The customer perspective. How do customers see us?
The internal business perspective. What must we excel at? The innovation and learning perspective. Can we continue to improve and create value for our services?
Strategic / organizational performance management At strategic level, performance management deals with the achievement of the overall organizational objectives. Practitioners refer to it as corporate, business or enterprise performance management, this being the highest and most complete level of usage of performance management principles in organizations. Operational / departmental performance management Performance management at operational level is in the realm of operational management, as it serves is the achievement of operational objectives. Although aligned with corporate strategy, it has a functional focus, using tools such as dashboards and scorecards. HR Dashboards are used to collect and analyze human resources management indicators that guide the management decisions of HR departments. Similar tools in other functional areas are Marketing Scorecards, Portfolio Dashboards and Supplier Scorecards.
Individual performance management The traditional level at which performance management is used in organizations is the individual level, looking at the performance of individuals in an organizational context.
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Interest in strategy as an area of management study followed the diffusion of strategic planning (longrange planning) among large companies. The first strategy formulation frameworks appeared (Ansoff)
Eccles publishes the Performance Measurement Manifesto in Harvard Business Review. In this article, he predicts a performance measurement revolution will take place in the next five years.
1920
1951
1946
1960s
1991
1980s
1954
The term "management by objectives" was first popularized by Peter Drucker in his book 'The Practice of Management'.
1992-2007
Concept of a Corporation the first book to treat a business corporation as a political and social institution. Authored by Peter Drucker, it is based based on his observations of management practices of General Motors (1943) and launched the idea of selfgoverning plant community.
By the 1980s empirical research in strategic planning systems focused upon just two areas: the impact of strategic planning on firm performance and the role of strategic planning in strategic decision making
The Balanced Scorecard emerges as a multifaceted concept that can be used for measuring performance and executing strategy.
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1920s
1960s
1970s
1990s
1980s
A constant stream of new developments in production and processing techniques such as flexible manufacturing systems, just-in-time production, materials requirements planning, enterprise requirements planning, supply chain management and total quality assurance
1990s-200x
Taylors ideas were advanced by many others including Frank and Lillian Gilbreth, who developed the concept of time and motion studies, which required the measurement of every single movement undertaken by a worker in the course of their work.
The General Motors system of performance measures, the development of which culminated in the 1970s included several nonfinancial indicators, and can been seen as the fore-runner of the balanced scorecard approach.
The rise of Business Intelligence software products had a profound impact on how companies manage their operational performance. Enterprise Resource Planning software (SAP, Oracle, etc.), combined with Business Intelligence software (Business Objects, Hyperion, Cognos,etc.) enabled companies to reach
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1540-1560, a procedure to formally rate members of the Jesuit Society was established by Ignatius Loyola. In 1648, it is reported that the () Evening Post evaluated legislators by using a rating scale based upon personal qualities.
Antiquity
Prior to World War II, performance appraisal systems tended to exclude top management, generally used graphic-rating scales. By the early 1950s, 61% of organizations regularly used performance appraisals, compared with only 15% immediately after World War II.
Innovative use is now being made in some organizations of a selfappraisal system, especially for managers and higher-level professionals
16-17th century
1950s
1990s
221-265
The emperors of the Wei Dynasty (221-265AD) rated the performance of the official family members. Chinese philosopher Sin Yu who reportedly criticised a rater employed by the Wei Dynasty:the Imperial Rater of Nine Grade seldom rates men according to their merits, but always according to his likes and dislikes
1800-1817
Performance appraisals in industry were most likely initiated by Robert Owen in the early 1800s. Owen monitored performance at his cotton mills in through the use of "silent monitors. The monitors were coloured cubes of wood with different colours painted on each visible side. They were displayed above the workstation of each employee. At dayend. The colour of the visible side of the cube was associated with a rating to indicate performance. At the end of the day, the block was turned so that a particular color, representing a grade (rating) of the employees performance, was facing the aisle for everyone to see. White indicated excellent yellow indicated good, blue was used to indicate indifferent while black indicate bad. Anecdotal evidence indicates that this practice had a facilitating influence on subsequent behavior.
1970s-1980s
In the 1970s in and the 1980s/1990s in it was government legislation concerning such things as equal opportunity, civil rights, etc. which compelled organizations to adopt some sort of system.
1990s-200x
The introduction and growth of strategic performance management systems such as the Balanced Scorecard that cut across organisational levels, linking strategic, operational and individual performance
management in organizations.
Goals should be challenging, but attainable. Goals should be specific rather than vague. Employees should be involved in the process of setting their own goals. Goals should be measurable in terms of being clearly understood by employees: quantity, quality, time, and cost.
1. Directive function. They direct attention and effort toward goalrelevant activities and away from goal irrelevant activities. 2. Energizing function. High goals lead to greater effort than low goals. 3. Impact on persistence. When participants are allowed to control the time they spend on a task, hard goals prolong effort. 4. Affect action indirectly by leading to the arousal, discovery, and/or use of task-relevant knowledge and strategies .
Decision-making Measurement
Change
Motivation
KPIs as pheromones
Pharaoh's ants use three types of pheromones: An attractive, short-lived pheromone that allows trails to new food sources to be laid down whilst old trails to depleted foods sources evaporate; An attractive longer lasting pheromone that allows reestablishment of old trails; and A repellent pheromone that acts as a 'no entry' signal for ants.
http://royalsociety.org/Go-to-the-ant-and-be-wise/
http://www.sciencebuddies.org/science-fair-projects/project_ideas/Zoo_p016.shtml