Performance Metrics by yaofenji

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									Measuring Effectiveness

“What gets measured gets done”

Introduction
“How’s it going?”

It’s a simple enough question. Chances are, if you don’t have a performance monitoring
system in place, it’s a question you would be hard pressed to answer related to your fleet
maintenance operations.

If you aren’t measuring performance, how do you know if you or your vendor are doing a
good job? Where are you now, where do you want to be, and how are you going to get
there? More importantly, how do you illustrate to senior management that maintenance is
being done efficiently and effectively?

Managers often have a tendency to focus on strictly financial performance. While
important, it is only a part of the picture. Equally important are questions such as are you
performing the services the client requires? What types of repairs are you spending most
of your time and money on? The list of possible performance metrics in maintenance
operations is vast. This chapter will outline how to measure effectiveness in fleet
maintenance operations, including benchmarking, performance metrics and best
practices.


Effective Management Practices


In today’s world, maintenance operations are under pressure to show results, cut costs,
and support the mission of the organization. This is a logical expectation from a business
standpoint. The ability to be successful lies within the practices and systems that make
up the maintenance function. It is not just what you do; it is how well you do it.
Following are what can be defined as objectives of an effective maintenance operation:

      Support operations by keeping vehicles and equipment in good operating
       condition
      Keeping maintenance facilities in a safe and functional state
      Perform quality work
      Anticipate and prepare for future work
      Strive for continued improvement, by evaluating performance, taking corrective
       action and measuring progress

In order to have an effective maintenance operation, you must first have policies and
expectations that serve to guide maintenance staff in supporting maintenance activities.
Policies must be deployed, communicated and monitored. One of the more common
hindrances to continued improvement in effectiveness and efficiency in maintenance
operations is resource issues. Benchmarking and performance measuring are tools that
can be used to help identify and address resource issues. These topics will be dealt with
in more detail further on in this chapter.

Poor planning, improperly trained staff, unclear goals and objectives, lack of leadership,
poor record keeping, and lack of resources can cause maintenance operations to take
longer, cost more, and reduce quality of work. The result is a maintenance operation
that is poorly positioned to compete effectively. Solid maintenance practices supports a
strong maintenance system geared toward proactive activities involving the total
organization. Improving those practices requires patience, management commitment and
dedication, as well as the willingness to make it happen through well-conceived plans
and actions.

Measuring these practices is important to see how well they perform. However, the
ultimate indicator is how well maintenance enables the rest of the organization to meet
its goals and objectives

Information Management Systems




Maintenance personnel are presented with more difficult challenges today than at any
previous point. The biggest obstacle of all confronting maintenance professionals is
being forced to do more with fewer resources. Maintenance departments must deliver
superior services, comply with regulatory requirements and provide detailed financial
accountability all within the confines of limited and/or reduced budgets. In order to meet
these challenges, maintenance managers must arm themselves with economical
computerized maintenance management systems. This involves having a Fleet
Information Management System (FIMS) that is capable, well supported, and fairly easy
to use.

All maintenance professionals will agree that to get the job done right you must have the
correct tools. The same is true when selecting a FIMS. There are hundreds of FIMS
systems available on the market. However, many have been left behind as technology
advances in leaps and bounds. Gone are the days of mainframe and mini-computer
computerized maintenance management systems. Today, there exists a new generation
of powerful, PC based FIMS solutions. These maintenance software solutions take
advantage of the extensive capabilities of Microsoft Windows™ and include an
abundance of functions to deliver compliance, service and productivity enhancements
finely tuned to meet the needs of today's maintenance operations.

Modules should be consistent with industry standards. These areas include: equipment
data management, work-order control, preventive maintenance, inventory control,
documentation control, system security, ease of use, reports, user configuration and
metrics. When evaluating maintenance management systems, careful examination of
these factors during the evaluation process will help ensure ongoing FIMS success.

Success is also dependent upon maximizing the usage of the FIMS capabilities.
Although most organizations have an FIMS, poor utilization is quite common.

Almost all fleets get some form of work performed by outside service providers,
whether it’s full maintenance services or just specialty work such as engine rebuilding or
body repair. Your FIMS should have a means of alerting you when work is covered by
warranty and when costs deviate from contract rates.

The cornerstone to being able to measure effectiveness is information – meaning data.
Having accurate and complete data is absolutely critical to effective performance
measurement. Following are just some of the key elements your FIMS should be able to
capture in order to allow you to measure maintenance operation effectiveness:

Asset Tracking

      Vehicle assignments
      Attachment/component associations
      Depreciation
      Replacement cycle

Labor Collection

      Performance measurement
      Real time monitoring
      Bar code support
      Payroll interfacing

Outsource Tracking

      Warranty management
      Consistent pricing
      Repetitive repair history

Parts Management

      Stock levels
      Reorder support
      Monitor prices
      Inventory tracking
      Bar code support
      Warranty tracking
      Accounts payable interface


Maintenance Scheduling

      Meter triggering: hours, miles/kilometers, fuel, time
      Standard jobs: labor, parts list

Fuel Management

      Fuel use tracking
      Exception reporting
      Custom interface


Exception Reporting

Exception reporting is a means to leverage computing power to help with the task of
monitoring data accuracy as well as operational performance. Here are some key steps to
establishing effective exception reporting and then dealing with problems once they are
noted.

First, you need to decide what is important enough to track. You and your staff have a
limited amount of time to generate and review reports, so you need to prioritize what to
check, how often to check it, and who should do the checking. Establishing the
importance of something to be monitored should involve assessing its relevance to
obtaining organizational goals and objectives. Does it impact how your customers or
executives perceive the fleet organization’s performance? Does it affect
recommendations or decisions you must make? Bottom line, what is the risk of
something going wrong and the impact if you don’t catch it early?
Once you decide what to measure and report on, you need to establish exception
reporting thresholds. The primary difference between an ―exception report‖ and standard
informational reports is that only data outside the norm is shown, or at least clearly
highlighted for easy identification. For example, you don’t want to spend hours looking
at a listing of thousands of valid fuel transactions; you want to see the few with
substantially lower than average MPG values that indicate that there is a technician
problem with the vehicle or that there is potential theft occurring. In order for the
computer to make this selection for you, you must first tell it what criterion makes the
data ―exceptional.‖




Many FIMS have built-in features or add-on products, like Carolina Software’s ―The
Value Indicators‖, which allow fleet managers to customize what components are
monitored. Every fleet leader or customer can have their own version, tracking what they
find significant. This product displays in your web browser every morning, or on
demand. Products that provide easily identifiable graphical indicators take very little
time to review. The thresholds for each indicator are typically customizable so you
decide what is ―green,‖ ―yellow,‖ or ―red.‖ When a problem is indicated, the details
causing it are only a click away to aid in quickly investigating and resolving it. These
types of reports are indispensible for on-going performance tracking.
More detailed information FIMS’s, including descriptions and how to select one, can be
found in NAFA’s Fleet Information Management Guide.



Internal Service Agreements
If you want to better manage your client’s expectations, a service level agreement (SLA)
may be worth considering. An SLA is a negotiated agreement designed to create a
common understanding about services, priorities and responsibilities. By providing a
shared understanding of needs and priorities, SLA’s can serve as a great
communications tool, and a conflict prevention tool. To be continuously effective an
SLA must be a living document. Reviews should be completed on a predetermined
frequency to assess adequacy and negotiate adjustments. Done properly, SLA’s are an
objective basis for gauging maintenance operations effectiveness. It will help ensure
that both parties use the same criteria to evaluate service quality.
Service elements

To be effective, a service level agreement must incorporate two sets of elements: service
elements and management elements. The service elements clarify services by
communicating such things as:

      Maintenance services to be provided

      Service Standards, such as time frames,

      Responsibilities of both parties

      Costing details, including escalation factors

Management elements

The management elements focus on such things as:

      How maintenance service effectiveness will be tracked

      Communication (how effectiveness will be reported)

      Conflict resolution

      Review/revision procedures

For an SLA to be successful, customers must be part of the process! Creating an
effective SLA requires time spent information gathering, analysing, documenting, and
negotiating.

Key steps in establishing a maintenance services SLA are:

      Data gathering (highly dependent upon the effectiveness of computerized
       maintenance management software)
      Consensus between parties
      Outline responsibilities of both parties
      Draft, implement and manage the agreement

The main reason organizations enter into service level agreements is to improve the
effectiveness and efficiency of service delivery.
There are benefits for both customers and service providers.

Benefits of a Service Level Agreement:
      Sets clear performance expectations of the customer and service provider.
      Clarifies the roles and responsibilities of both parties.
      Focuses attention on customer’s priority needs.
      Encourages a service quality culture, and continuous improvement.
      Provides a mechanism for both parties to plan for the future.
      Puts purchasing power into the hands of the customer.
      Provides a useful tool for the customer to monitor performance.
      Service providers are in a better position to plan their delivery function.
      Can provide greater certainty of income for service providers.

Examples of Service Attributes and Customer Expectations

                 Attribute                                   Expectation
Availability                                  Suitable Hours
Responsiveness                                Prompt Attention
Timeliness                                    Speedy Processing
Reliability                                   Accuracy Billing
Equity                                        Consistent Decisions

Defining Service Levels

A service level is an agreed measure which might include one of the following elements
to describe the performance of a service delivery:

      Quantity
      Quantity
      Timeliness
      Cost

Service levels are similar to standards, but this term is usually used for organization-wide
performance.




Examples of Service Levels

         Attribute                   Service Level                  Expectation
Availability                  Suitable Hours                 Open 8:00 – 6:00
                                                             weekdays
Responsiveness                Prompt Attention               Same day service
Timeliness                    Speedy Processing              Work orders or invoice
                                                             mailed/emailed in 24 hrs
Reliability                   Accuracy Billing               99.5% accuracy
Equity                        Consistent Decisions           No complaints about unfair
                                                             treatment
Before defining your service levels, both parties need to describe all the services to be
provided and define current performance. You can then measure improvements against
this baseline. In all cases, the SLA should indicate the minimum level of performance.

Establishing Performance Indicators

Having decided on appropriate service levels, the next step is to agree on how these will
be measured. Performance metrics will be discussed in further detail later in this chapter,
however, following are just a few examples of performance indicators you could have in
a maintenance SLA:

• Number of vehicles serviced during a specified period
• Dollar amount of vehicle parts replaced during the period
• Average down time for vehicles in shop during the period
• Average productive time of direct labor
• Customer satisfaction results

Followings is another example of how you can define performance in an SLA:



Action                         Response Parameters                                   Goal

Reported service faults will   Visual checks relating to vehicle serviceability      95%
be actioned promptly           specified in the owner’s handbook will be made at
                               the beginning of every working day

                               All other service matters affecting serviceability   100%
                               reported by users through vehicle logs will be acted
                               on before the vehicle is next made available for use
                               if the matter relates to the roadworthiness of the
                               vehicle
Fleet vehicles will be         Fleet vehicles requiring service will be booked in    100%
regularly serviced in          for the same within 24 hours of the service
accordance with the            becoming due or within 24 hours of the return of
manufacturers requirements     the vehicle to Fleet Management after use

Once your SLA is in place, it can be an extremely effective tool to measure maintenance
operations performance.

A sample template of a SLA is attached as appendix:

Parts Inventory Systems
Creating an efficient system of counting and maintaining a parts inventory has long been
an onerous task for maintenance managers. The old methods of cataloguing by part or
item numbers have all but disappeared and have been replaced by computer software
programs to track stock-keeping units (SKUs).

Inventory management is critical to maintain a stocking service for quick turnaround to
help ensure total customer satisfaction. The "fill rate" of an item on a managed inventory
list must be maintained to avoid shortages of frequently used items. Even when utilizing
an inventory management system, occasional shortages will still occur.

To be successful in today's fast-paced, highly-competitive environment, you need to have
the necessary parts in stock or have reliable suppliers to meet demands at a moment's
notice. Either way, you must have a practical, efficient method for managing inventory in
order to stay competitive and satisfy customers.

Facilities in larger cities tend to have more options for inventory stocking. Since there are
often numerous parts suppliers nearby, there is less of a need to stock certain parts.
However, stocking inventory can sometimes yield the benefit of bulk discounts.

Failure to consider the practical issues of performance measurement related to parts
inventory systems can undermine an organizations performance. There is a natural
tendency in most organizations to reduce inventory to the lowest levels possible. Drastic
actions to drive inventory down are often motivated by popular philosophies that characterize
inventory as a liability rather than as asset. They are striving to reduce inventory levels in an
effort to reduce costs and be "leaner". Granted, with just-in-time delivery (JIT) for many
parts, stocked items can indeed be drastically reduced. However, factors such as the
complexity of the equipment being worked on, parts lead time, and the organizations risk
tolerance for down-time, must be considered. The benefits of reduced inventories can be
more than offset by an increase in overtime and expediting costs.

Common Mistakes

A maintenance manager in company XYZ is given a goal of reducing parts inventory
costs. By itself, this goal at first blush sounds reasonable and simple enough. However,
if this manager were to simply reduce inventory without taking into account parts
availability, downtime, costs, critical equipment etc., we can quickly see how disaster is
around the corner. Imagine the consequences if a critical piece of equipment such as an
emergency response vehicle, or a vehicle critical to a manufacturing process, were to
break down in a peak period or emergency situation. Situations such as this can result in
costly overtime (waiting for parts, working after hours), production shut downs, reduced
quality of work (rushing), and ultimately ends in crisis management.

While inventory levels are certainly an indication of efficiency, focusing solely on this
performance measure can undermine an organizations performance in other areas.
Unless complementary actions are taken, such as setting up arrangements for JIT delivery
for specific parts, the results could have negative impacts on your organizations overall
strategic objectives and service delivery. That is why managing parts inventory is a
discipline in itself.
Conversely, carrying ―dead stock‖ can be one of the highest costs associated with
overstocking. Generally, it can be higher than the value of the money tied up in
inventory. Parts stocks for units planned for replacement should be identified and not
restocked if they don’t fit anything else that will remain in the fleet. Parts contracts
should have any restocking fee bid/negotiated as part of the contract because these costs
can be significant. This is an especially big problem for fleets with one or two of
everything or that have not standardized their vehicle purchases for larger fleet segments.

Best Practices:

      Conduct period reviews
      Analyse usage and lead times
      Reduce safety stocks
      Improve ―cycle‖ counting
      Transfer ownership (consignment)
      Re-determine order quantities
      Improve forecasts
      Give schedules to suppliers
      Implement new inventory software

The Inventory Quality Ratio (IQR) is a methodology that has become an industry best
practice. It is a simple analytical technique for measuring inventory performance. It uses
both past usage and future requirements to calculate days’ supply, and user-defined
parameters to measure current inventory performance. It provides planners and managers
with an easy way to reassess lead times, safety stocks, order quantities and replenishment
cycles on a weekly, monthly or exception basis. IQR also enhances existing systems by
adding a dollar focus to prioritize current reduction opportunities.

Samples of Parts Management Performance Measures

      Parts order fill rate: percentage of parts filled from stock
      Parts order fill time
      Inventory turnover rate
      Inventory utilization rate: percentage of inventory lines used in last 12 mths

More detailed information on Parts Inventory Management including IQR and other
techniques can be found in Chapter ** of this guide.

Benchmarking
Benchmarking is the process of comparing performance with other organizations,
identifying comparatively high performance organizations, and learning what it is they do
that allows them to achieve that high level of performance.
The benchmarking process is used in management to evaluate certain aspects of
processes in relation to industry best practices, sometimes within the same organization
and often with other similar organizations or operations. It can be applied as a one-time
event or an on-going process. It is not sufficient to merely compare performance – to be
truly effective, benchmarking involves gaining an understanding into why those
organizations do well, and, as a result, what you need to do to achieve similar
performance.

Why benchmark?

Benchmarking can be used to develop an understanding of fleet conditions and
performance attributes that cannot be attained through first-hand observation or second-
hand information. It can provide focus to processes and performance improvement
efforts. In some cases, it can allow you to zone in on underlying causes of performance
deficiencies. It will help you gauge progress towards the attainment of specific goals and
objectives. Lastly, it can communicate competence and competitiveness.

How to Benchmark



                     A Benchmarking Process
                              1. Define                      6. Compare
                              Objectives                      Practices



                              2. Define                       5. Survey
                             Performance                        Peers
                              Measures


                           3. Collect Data &                  4. Evaluate
                                Measure                      Conditions &
                              Performance                      Practices

                                           7. (Re)Engineer
                                               Processes




Step 1 & 2: Defining Objectives and Defining Performance Measures


As a first step, you need to define what your objectives are – what are you going to
measure? Once you establish your objectives, you need to define how you are going to
measure this objective. Following is a brief example of objectives and measures related
to maintenance operations.
        Objective               Performance Attribute            Performance Measure
Available                     Downtime                         % units out of service in a
                                                               day
Reliable                      Breakdowns                       Miles, Kms, Hours /
                                                               Breakdowns
Economical                    Maintenance Costs                Cost/ Miles/Kms, Hours


Step 3: Collect Data and Measure Performance

Collect Data

As outlined in the FIMS section of the chapter, accessibility to good data is critical in a
benchmarking exercise. Whether benchmarking internally or with an external
organization, you must first collect your internal data. This can come from historical
costs related to your maintenance operation – costs such as fully burdened labour costs,
parts costs, and all maintenance costs captured on your FIMS. Data can also be captured
from sources such as surveys (i.e. customer satisfaction), or your corporate information
systems.

Dependent upon who you are benchmarking with, you must also collect similar data
externally – i.e. from peers, vendors, contractors or manufacturers. This is where
benchmarking can become somewhat of a slippery slope. Caution must be used to ensure
you are comparing apples to apples. For example, if you are measuring maintenance
costs per mile/kilometre, you must ensure that your data captures similar costs and that of
your benchmark set of data. Do both entities use a fully burdened labor rate? Are both
FIMS’s and data sources robust, accurate and timely? Be sure to know what is included
in your data sets.

Measure Performance

Once you have gathered the data from all applicable sources, you can then compare or
measure your performance against the benchmark you are using. Some common
performance measurements for maintenance operations are:

      Cost per transaction (work order), by type of service
      In-house labor costs
      In-house parts costs
      Vendor/contract costs


Step 4: Evaluating Conditions and Practices
As mentioned earlier, it is important to examine maintenance and repair cost drivers. For
example, when considering labor costs, it is essential to include things such as salary and
fringe benefit costs, and indirect maintenance costs such as support staff, facility costs,
and overhead. When looking at technician performance levels, it is important to consider
things such as efficiency, productivity and effectiveness. Conditions that can affect
technician performance are fleet composition, age, condition, utilization/operation, the
organizational structure, staffing levels, and the state and availability of facilities and
maintenance equipment. Some practices that can affect technician performance include
work planning, service writing, supervision, training, compensation, parts provisioning,
and use of vendors/contractors.

Steps 4 -6: Evaluation Methods

Following are some common evaluation methods used in benchmarking:

      Process mapping and gap analysis
          o Documentation review
          o Interview
          o First hand observation

      Comparison with Peers
         o Surveys
         o Informal communications

      Comparison with Industry Best Practices
         o Literature review
         o Consulting study


Step 7: (Re) Engineer Processes

The last step involves putting into place processes that address areas of improvement you
have identified in your benchmarking exercise. Some common processes that can
improve technician performance and improve maintenance cost competitiveness are
noted below:

      Work scheduling
      Defect reporting
      Time and task standards and time reporting
      Training
      Supervision
      Quality assurance
      Performance pay
Benchmarking is essential for understanding the strengths and weaknesses of a fleet
management organization and fleet operation; you can’t know if you are winning or
losing if you don’t keep score! Benchmarking is part of a strategic (planned) approach to
fleet management that provides focus and direction to performance and process
improvement endeavors.


Examples of Benchmarking Topics

Some of the more common benchmarking topics in fleet maintenance operations are
listed below:

Vehicle Maintenance

      Downtime rate: percentage of vehicles out of service for repair as a percentage of
       total vehicles in the fleet (by vehicle and mission type)
      In-house cost per transaction as a percentage commercial transaction cost (by
       transaction type)
      Maintenance and repair cost per vehicle equivalent unit per year
      Avoidable cost per in-house technician labor hour as a percentage of local
       commercial shop labor rates
      Technician productivity rate: hours charged to work orders as a percentage of pay
       hours (by technician, work crew, shift, shop)
      Technician efficiency rate: average time to complete a specific service as a
       percentage of recognized service completion time
      Comeback rate: percentage of completed repairs returned to shop for rework

Parts Management

      Parts order fill rate: percentage of orders filled from stock
      Parts order fill time
      Inventory turnover rate
      Inventory utilization rate: percentage of inventory lines used in last 12 months

Staffing

      Technician to supervisor ratio
      Technician to parts technician ratio
      Ratio of administrative and managerial personnel to direct service personnel
      Ratio of vehicles to fleet management personnel

NAFA Benchmarking Surveys

More to come!
Performance Metrics
What are Performance Metrics?

While benchmarking is a process used in management to evaluate certain aspects of
processes in relation to industry best practices, performance metrics can be defined as a
system of parameters or ways of quantitative and periodic assessment of a process that is
to be measured, as well as the system to carry out and assess such measurements.
Typically, metrics are specialized and cannot be used for benchmarking purposes outside
of the domain for which they were created. Often, the metrics tracked are called key
performance indicators or KPI’s.

Common Maintenance Key Performance Indicators

• Maintenance cost per km;
• Maintenance cost per vehicle specification
• Overall fuel consumption;
• Number and frequency of breakdowns;
• Number and frequency of technician road calls;
• Hours of service lost; and
• Schedule hours versus actual hours

Following is an example of a performance tracking/reporting document:

                       HOW ITS
   METRIC               BEING            CALCULATION                    REASON                  PERFORMANCE                  RESULT
                      MEASURED                                                                    GUIDELINE
                    Maintenance and      Total direct M & R      Important measure of how            $800 - $1000               $1200
Cost                Repair Cost per      costs less accident     parts & labor being used –
Effectiveness       Maintenance          repairs per year/ #     dependant on
                    Equivalent           VEU’s                   age/condition of fleet
Staffing Levels     VEU per technician   # VEU’s / technicians   Method of determining                 90 - 100                      90
                                                                 appropriate staff levels
Cost                Fully burdened       Total annual costs      Provides a measure of        Average local labor rate   Your rate
Effectiveness       maintenance labor    associated to fleet     efficiency & effectiveness
                    rate                 maintenance / total     and can also be used to
                                         hours billed in year    compare to outsourced
                                                                 rates
Maintenance         Scheduled Service    # scheduled WO’s /      A greater volume of                  60 – 65%                   62%
Management          Rate                 total # WO’s in year    scheduled service = higher
                                                                 technician productivity
                                                                 and less vehicles out of
                                                                 service




Uses of Performance Metrics

Following are some examples of how or what performance metrics can be used for:

                 Identify areas for improvement
                 Illustrate good performance (particularly to management)
          Help achieve goals and objectives
          Build a business case to obtain more resources
          Build a business case to change method of doing business (i.e. outsource, in-
           house, etc,)
          Emphasize value to clients or management
          Improve client satisfaction
          Help establish budgets
          Refocus priorities
          Measuring a contractor’s performance
          Regulatory compliance
          Improve productivity
          Improve equipment productivity and effectiveness
          Control maintenance costs

Performance metrics are useful indicators of the tactical day-to-day performance of fleet
maintenance, as well as strategic long-term performance trends. They provide a rational,
quantifiable methodology with which to evaluate performance and to compare that
performance with past performance and/or peer organizations. What is measured depends
on who the target audience is and what the objectives are. Performance reports should be
tailored according to the audience. For example, senior management is typically more
interested in high level information that is linked to organizational objectives.

Different Reports for Different Decision Makers


               Position                                   Performance Report
Executive Manager, Customer                      •   Vehicle availability or downtime
                                                     rate
                                                 •   In-service breakdown rate
                                                 •   Ratio of actual to budgeted
                                                     expenses
                                                 •   Accident rate

Fleet Manager                                    •   PM schedule adherence rate
                                                 •   Work order turn-around time
                                                 •   Average maintenance and repair
                                                     backlog
                                                 •   Technician productivity rate

Maintenance Manager                              •   Direct/billable hours by technician
                                                 •   Efficiency rate by technician
                                                 •   Repair comeback rate by technician

Parts Manager                                    •   Parts order fill time
                                                 •   Parts order fill rate
                                                 •   Inventory turnover rate
                                                 •   Percentage of inventory with no
                                                     movement in last 12 months



If you don’t already have a performance measurement system in place, you may want to
start off slowly. Focus on a few key areas that you want to measure. As a first step, look
at your maintenance operation and determine what areas need to be measured. Then, use
your existing fleet data to calculate as many of these measures as possible in order to
define a baseline of fleet performance as it stands today. Finally, define the data
collection and reporting mechanisms necessary to fully implement an ongoing program of
performance measurement.

There are many different methods and tools available to managers to have a fast and
comprehensive view of performance. Some of the more common in use today are the
Balanced Scorecard and Dashboard. Digital dashboards use visual, at-a-glance displays
of data pulled from systems to provide warnings, action notices, next steps, and
summaries of performance.
Here are some examples of what digital dashboards can look like.
Best Practices

“Obstacles are those frightful things you see when you take yours eyes off your goal. “

—Henry Ford

Establish a Results-Oriented Set of Measures That Balances
Maintenance Operations, Customers, and Employees
Creating performance measures is the most crucial part of the process. And a most crucial
part of this creation process is to consult with your customers (to find out what they really
want) and with your employees (to find out what they need to achieve success). This
consultation has a significant impact on how your maintenance operation’s overall
performance is managed. If your customers and employees are part of the planning
process, they then become part of the achievement as well, building an environment of
trust and openness that can really turn things around. Trust and openness stimulate buy-
in, and buy-in is what unifies an organization around a strategic mission.

The critical areas of practice in the establishment of measures are the following:

      Define what measures mean the most to your customers, stakeholders, and
       employees.
      Commit to initial change.
      Maintain flexibility.



Establish Accountability at All Levels of the Organization

There is no greater teacher than responsibility.

—Warren Bennis, Managing People Is Like Herding Cats

Accountability for implementing and using a set of measures within an organization lies
with those responsible for achieving the organization’s intended goals. In a many
organizations, it is the responsibility of the entire workforce to work toward these goals;
they are thus being held accountable for outcomes not completely under their control.
And while the problem of management buy-in regarding accountability may be less
obvious, it can still exist. Front-line managers may feel like any other employee and resist
being held accountable for outcomes they cannot completely control.

The best practices, listed below, reflect some ways to develop and "cascade"
accountability throughout an organization. They emphasize the role of leadership in the
process, as well as the need for communication with customers and employees and
innovative thinking. The best practices include the following:
      Lead by example.
      Cascade accountability: share it with the employee.
      Keep the employee informed.
      Keep the customer informed.
      Make accountability work: reward the employee.

Collect, Use, and Analyze Data
Not everything that can be counted counts, and not everything that counts can be
counted.

—Albert Einstein

Properly collected and analyzed, data can give organizations insight into their service,
customers, and performance. That’s because data provide a critical resource, linking
activities and functions to strategic planning, organizational goals, and management. And
this linkage, in turn, leads to increased productivity, efficiency, and organizational
effectiveness.


Collect Feedback Data

The former mayor of New York City, Ed Koch, was famous for yelling out to his
audiences, "How am I doing?" That is precisely what feedback data tell you. Feedback
can tell an organization how well it is performing and communicating, and can also
identify emerging issues and problem areas.

Collect Performance Data

Collection of performance data increases accountability and provides a baseline of
information from which trend data and success/failure rates can be derived.


      Be willing to invest both time and money to make it right.
      Make sure your performance data mean something.
      Recognize that not everything is on-line or in one place.

       Measure the right thing, then measure it right.

      Centralize the data collection function at the highest level possible.

Analyze Data—and Then Use It

Obtaining good data is only half the battle. You also have to be able to analyze it and use
it to improve your performance.
      Combine feedback and performance data for a more complete picture.
      Conduct root-cause analyses.
      Make sure that everyone sees the results of analyses.

Data should primarily be used to determine key processes within an organization and to
monitor performance. Process improvement is at the heart of performance management,
and data should be used not only to correct deficiencies but also to hone process and
performance.

Connect the Dots
You’ve got to think about "big things" while doing small things, so that all the small
things go in the right direction.

—Alvin Toffler

Creating a balanced set of performance measures involves all of the activities discussed
above —balancing customer, stakeholder, and employee interests; establishing
accountability; and collecting using data. But translating that set of measures into
achievement of organizational mission means connecting those activities to the
organization’s day-to-day operations. While this basic principle is widely recognized in
theory, practical application has widely varied levels of success.

The key to driving actions and results is to connect all the critical elements, namely:

      Connect to employees and customers.
      Connect to the business plan.
      Integrate with data systems.
      Integrate with the budget process.

Sharing the Leadership Role
A boss creates fear, a leader confidence. A boss fixes blame, a leader corrects mistakes.
A boss knows all, a leader asks questions. A boss makes work drudgery, a leader makes it
interesting. A boss is interested in him or herself, a leader is interested in the group.

—Russell H. Ewing

Without exception, strong leadership is as a key factor in success in applying a balanced
approach to performance management. Without support from senior management and top
officials, it is difficult—although not impossible—to establish a successful strategic
framework that integrates all the factors discussed.

Whether an organization’s management structure is a pyramid or more like a web —
characterized by interconnections criss-crossing throughout the structure—certain
leadership truisms pertain. These are: (1) good leadership relies on good communication,
and (2) all members of the organization must have clearly defined responsibilities. The
best leaders

      report back to the employees, customers, and other stakeholders;
      use self-assessment tools,
      involve the legislative/legal branch through consultation or representation on
       working groups and committees;
      involve the customer, stakeholder, and employee at every phase of the
       management process; and
      involve the unions early and often.

Leadership that takes into account feedback from its employees, customers, and
stakeholders, together with performance data, has a full scope of information upon which
to make informed decisions. And it is a basic tenet of good management that the more
informed the decision, the sounder that decision will be.

Source for Best Practices:

http://govinfo.library.unt.edu/npr/library/papers/bkgrd/balmeasure.html#summbest

								
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