Performance Management Techniques

  • Created by: Sophie
  • Created on: 09-05-19 11:43


There are many ways to monitor performance, and this can lead to improvments to the working environment, training systems and other aspects to achieving and improving target goals. 

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Service Level Agreement

A service level agreement is an efficient way to monitor what work is being carried out and to what standard. It can outline the way in which work should be carried out and give details on how. 

It comes in the form of a document that is agreed by both parties. The document can involve objectives for tasks, available of equipment and staff, hours of contract, reliability of service and others.

These standards can then be compared to in-house targets to measure the efficiency of the targets.

This is an easy way to monitor whether targets are being met and to what standard. The standard can be agreed in the SLA so customers know what service to expect. This is a benefit as they can be tailored to suit the needs of the organisation.

However, an issue with SLAs is a standard isn't always clear and can be subective, to avoid this standards need to be clearly defined to avoid grey areas.

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Critical Success Factors and Key Performance Indic

Critical Success Factors are key elements to an organisations success. Some examples may be effective KPIs, quality control or effective processors. This can be used as a baseline to which targets should be set, and these can be developed and cascaded down into the busniess. 

There should be a few Key Performance Indicators for each target. KPIs are a tool for driving continuous improvement. This might measure reaction times, first time fixing or monitoring adherence to a plan, training or energy saving. These measures can be compared to set targets. A good KPI report will have detailed information on how to reach a busniess aim, It is a simple tracking method - what are other standards in the region? Who owns the KPI? What does it include?

A risk to be managed with KPIs is measuring too many components, this can cause the organisation to lose the key targets. It is one of the biggest causes of leadership waste which reduces effeciency in the organisation. A problem can be linking a KPI to several goals. For example: mean time between fixing (MTBF) might be sub 30 mins 100% of times for changing a light bulb but only 20% of times for replacing a broken window. The KPI must be specfic to the equipment to work well.

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Balance Score Cards

Balance score cards (BSC) display factors that may affect reaching a key goal, and how these can be managed in order to achieve that goal. A BSC may include factors that affect it, how these can be managed, how this will be monitored and how these will be measured. A scorecard may also outline a long term plan for success which is beneficial as it encourages development. 

A popular acornym for management is SQCDP: service, quality, cost, delivery and people. So an example would be 'People' may be improved through efficient training, that may directly or indirectly link to the goal. 

A benefit of scorecards is they are generally on one page, and are clear, specific and easy to understand. They also assist in bridging the gap between long term and short term goals. 

Unfortunately however, there is a lot of cost involved in implementing BSC. Training is required, which takes time, money and there is a risk that employees will not take a BSC seriously. 

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Benchmarking is comparing ratings of competitotrs in the field to establish the best methods for success. Benchmarking can consider cost, quality and time in order to stive for improvement. 

For example a SHU may compare figures of outsourcing different facilities to see which if any are the most cost effective way to run the institution.

An advantage of benchmarking is it creates competetion in the industry which strives improvement in companies.

It also encourages busnisses to work outside their comfort zones and creates change in the way they do things to compete.

A disavantage to benchmarking is the cirumstances in which the ratings are achieved aren't explained, so it is an inadequate way to measure overall effectives. 

Additionally, it may cause stagnation in the indusry as once an organisation is at the height of the system, they may stop improving. Generally however there are always areas of improvement in organisations. 

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Performance Rated Pay

Performance rated pay is the concept of paying someone based on the quality of their work. It is a plan for improvement based on pay. 

It links salary progression to performance which encourages the service provider to achieve targets. This can be measured by a performance report that sets targets for an individual or team.

It also assists in retaining talented employees as they are aware they are rewarded for their work.

A disadvantage is performance is subjective and some jobs are harder to rate than other jobs. For example, administration roles often do not have set goals. 

It also doesn't encourage a good working culture in the organisation which in turn stagnates trust. 

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Continuous Improvement

Conintuous improvement is the concept of striving continusouly to reach goals. It is an organisation-wide process of innovation. 

Straetgic goals should be communicated where monitoring these drives improvement. 

It encourages service providers to consider how they are going to improve. 

A disadvntage of continuous improvement is it is unsettling to work in a continuously changing working environment and so investment will need to be made for training. 

An advantage is it encrouages feedback and constructive critisism from staff, and this can be used to improve the working environment of the workforce which in turn will imrpove productivity and work to meet long term goals. As a result, staff can feel part of the improvments, which encourages performance. 

Feedback needs to be carefully considered to ensure it would imprve business goals. 

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It is important to consider what management technique would work best for what organisation, and bare in mind that too many performance management techniques may prove detrimental to a busniess. 

For example, if having a strong working culture is key to the function of the organisation, then continuous improvement and balance score cards may be the preferred way to manage. 

Each performance management technique will have downsides and it is deciding which will be least detrimental to the busniess. 

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