“If it can’t be measured it can’t be managed”. The goal of performance management is to make sure that the organization’s current activities are geared towards fulfilling its visions and objectives. Measures include quality, no. of defects, employee performance, financial measures. In terms of customers, this would include quality, safety, cost, satisfaction and the process. Performance is the achievement of quantified objectives, measuring performance in comparison with expectations expressed as objectives. This can also help to maintain the values of the organization. The focus is on those that helps employees realize core values such as concerns, quality, people and equal opportunities.
The stakeholders include those affected by companies decisions. Including internal (employees, owners) and external (customers, funders, governmental). Critical to x requirements (CTX) those that impact the customer, where x is the variable. Critical to x areas include quality (CTQ) which might be the height/weight of a product, cost (CTC) e.g. the price, satisfaction (CTS) e.g. complaints/details. Process (CTP) e.g. temp, Safety (CTS) e.g. warning label.
Benchmarking and The Balanced Score Card. These are tools used to improve the process. Best in class company outputs to create benchmarks e.g. 24 hour customer complaints. It is not just financial measures. It offers companies opportunities to convert their business visions, strategies and objectives into quantifiable and identifiable measures. The Balanced Score Card includes customers, internal business processes, learning and growth and Financial.
The Score Card from a customer perspective. How do customers see us? Tailor make customer, create value for the customer, product differentiation. The Internal Business Process: Quality, Lead time, Cost, Product Launches. Growth & Learning: Product R&D, Expand to a new market and customer employee retention and training. Financial: Results of the strategies, quarterly earnings and share prices. Which is the outcome measure/driver.
KPIs (Key Performance Indicators): How well are we moving towards our goals and objectives? Qualitative and quantitative. Tailor-made. Clear-defined measures that are related to common goals and objectives. KPIs should be on the inputs, process and outputs.
Financial measure should be quarterly earnings in 3 month increments. Share prices. Cost of quality (COQ), cost of poor quality (COPQ), return of investment (ROI), net present value (NPV).