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MODULE 3C.2 IMPROVING PERFORMANCES (BENCHMARKING* PG310 COMPARING…
MODULE 3C.2 IMPROVING PERFORMANCES
TARGETS PG309
PROBLEMS
THE COST BENEFIT TRADE OFF IN CONTINUALLY ACHIEVING MORE STRETCHING TARGETS
THE IMPACT OF ACHIEVING SOME TARGETS ON OTHER TARGETS
THE ACCURACY OF ASSUMPTIONS IN THE PREDICTIVE MODEL
COST- BENEFIT
- THE COST AND BENEFITS OF ACHIEVING AN EVER INCREASING TARGET NEEDS TO BE WEIGHED AGAINST IMPROVING PERFORMANCE
KEEPING TARGETS IN BALANCE
- NEEDS TO SEEK AN OPTIMUM RESULTS
PREDICTIVE MODEL
- A SET OF ASSUMPTIONS THAT WILL DRIVE THE BUSINESS
TREND
- DETERMINES IMPROVING OR WORSENING PERFORMANCE OVER TIME AND ARE RELIABLE MEASURES OF PERFORMANCE COMPARED TO PERFORMANCE VS TARGETS
BENCHMARKING* PG310
COMPARING PERFORMANCE TO :
COMPETITORS
INDUSTRY AVERAGE
ACKNOWLEDGED " BEST PRACTICES" OR " WORLD CLASS" PERFORMANCE
ENABLES ORGANISATION TO SEE WHERE ITS PERFORMANCE MIGHT BE IMPROVED RELATIVE TO OTHERS
BENCHMARKING PERFORMANCE STEPS PG 311
DECIDE WHAT TO BENCHMARK
IDENTIFYING BENCHMARKING PARTNERS AND SOURCES
STUDY THE PROCESSES IN YOUR ORGANISATION AND GATHER INFORMATION
OBTAIN BENCHMARKING DATA
ANALYSE THE INFORMATION AND UNDERSTAND IT RELATIVE TO THE BENCHMARK
LEARN AND IMPLEMENT CHANGES WHERE NECESSARY
COMMON BENCHMARK AREAS PG 311
SALES REVENUE/ PROFITABILITY
PRODUCT AND SERVICES
PRICING STRUCTURES, FEES AND OVERHEADS
QUALITY CONTROL PROCESSES
CUSTOMER SERVICE STANDARDS / NO OF CUSTOMERS
STAFF MANAGEMENT / TURNOVER
INTERNAL BENCHMARK PG312
COMPARISON BETWEEN UNITS TO INTRODUCE INTERNAL COMPETITION AND LEARNING
INDUSTRY BENCHMARKS PG312
PROVIDES COMPARISON OF AN ORGANISATIONS'S PERFORMANCE AGAINST EITHER INDUSTRY AVERAGE OR BEST PRACTICES
ORGANISATION USED ARE IN THE SAME MARKET SEGMENT AND HAVE SIMILAR PRODUCT, PROCESSES, TECHNOLOGY
METHOD : OBTAINING DATA DIRECTLY FROM THE ORGANISATION IDENTIFIED AS HAVING THE BEST PRACTICE
SET UP BENCHMARKING CONSORTIUM FOR A RELIABLE INDUSTRY BENCHMARK THAT INCLUDES A NUMBER OF ORGANISATIONS OPERATING IN THE SAME INDUSTRY
PROBLEMS WITH BENCHMARKING PG 313
OBTAINING THE PARTICIPATION OF BENCHMARKING PARTNERS, ALL WHOM MUST SEE SOME VALUE IN THE PROCESS
DETERMINE WHY PERFORMANCE IS DIFFERENT COMPARED TO BENCHMARK
SOMETIMES WIDELY DIEFFERENT CONTEXT OF THE ORGANISATIONS (REGULATORY, TECHNOLOGY, HISTORICAL)
NON STANDARDISED DATA (DATA THAT IS MEASURED DIFFERENTLY OR HAS DIFFERENT MEANING BTW ORGANISATIONS EG: MEASUREMENT OF GROSS PROFIT)
HISTORICAL NATURE OF THE DATA ITSELF THAT DOESN'T REFLECT RECENT CHANGES
ORGANISATIONAL LEARNING & KNOWLEDGE MANAGEMENT PG 314
ORGANISATIONAL LEARNING
ENHANCES / IMPEDE THE ACQUISITION , SHARING AND UTILISATION OF INDIVIDUAL KNOWLEDGE WITHIN ORGANISATION (NONAKA 1991)
CONCERN WITH ASSUMPTIONS SHARING AND THE CONSTRUCTION OF MENTAL MAPSAS WELL AS UNLEARNING REDUNDANT INFORMATION ( HEDBERG 1981)
THE ASSUMPTION IN CAUSE-EFFECT OR ACTION-OUTCOME RELATIONSHIP ARE IMPLICIT I THE ORGANISATION'S PREDICTIVE MODEL
THE DISTINCTIVE HAS BEEN MADE BETWEEN LEARNING IN ORGANISATIONS BY INDIVIDUALS AND LEARNING BY ORGANISATIONS (POPPER & LIPSHITZ 1998), THE LATTER INVOLVING THE ORGANISATIONAL PROCESSES THAT ENHANCE OR IMPEDE LEARNING
KNOWLEDGE MANAGEMENT PG314
ORIGINATED IN WORK BY : WIIG 1993
DEVELOPED BY : NONAKA & TAKEUCHI 1995 AND DAVENPORT AND PRUSAK 1998
DESCRIBED AS THE PROCESS OF CREATING, CAPTURING AND USING THE KNOWLEDGE TO ENHANCE ORGANISATIONAL PERFORMANCE AT THE LEVEL OF THE WHOLE ORGANISATION RATHER THAN AT THE INDIVIDUAL LEVEL
PERFORMANCE IMPROVEMENT PG314
REQUIRES A LEARNING PROCESS THAT MAKES PERFORMANCE COMPARISONS USING TARGETS, TRENDS AND BENCHMARKS
IDENTIFIES CHANGES NEEDED TO THE ASSUMPTIONS ABOUT CAUSE-EFFECT RELATIONSHIP IN THE MENTAL MODELS HELD BY INDIVIDUALS AND THE BUSINESS MODEL OF THE ORGANISATION, AND CHANGES ANY ALL OF :
BEHAVIOUR
PERFORMANCE MEASURES
TARGETS (WHERE NECESSARY)
BEHAVIOURAL CONSEQUENCES OF PERFORMANCE MEASUREMENT PG315
CONCERN ABOUT HOW PERFORMANCE MEASUREMENT INFLUENCES THE BEHAVIOURS OF MANAGERS AND INDIVIDUALS WITHIN THE ORGANISATION
BEHAVIOURAL CONSEQUENCES OF :
PERFORMANCE MEASURES
PERFORMANCE TARGET
REWARD SYSTEMS
UNINTENDED AND DYSFUNCTIONAL CONSEQUENCES OF OF PERFORMANCE MEASURES PG 316
TUNNEL VISION
- FOCUS ON A SINGLE TARGET TO THE EXCLUSION OF THE OTHERS
SUB-OPTIMAL BEHAVIOUR
- ACHIEVING A PERFORMANCE TARGET AND FAILING TO TRY TO FURTHER IMPROVE BECAUSE THE TARGET HAS BEEN ACHIEVED
SUBSTITUTION
- REDUCE EFFORT ON PERFORMANCE THAT IS NOT SUBJECT TO MANAGEMENT ATTENTION
BEING FIXATED ON A PERFORMANCE MEASURE
- RATHER THAN THE UNDERLYING PERFORMANCE, BY IGNORING THE CAUSE EFFECT OR ACTION OUTCOME RELATIONSHIP
GAMING & BIASING
- MAKING PERFORMANCE APPEAR BETTER THAN IT IS, EITHER BY MISREPRESENTING PERFORMANCE BY PROVIDING INACCURATE REASONS FOR NOT ACHIEVING TARGETS OR EVEN FALSIFYING REPORTED PERFORMANCE
SMOOTHING REPORTED PERFORMANCE
- REMOVING FLUCTUATIONS BETWEEN REPORTING PERIODS
BIAS THAT ARE EQUALLY APPLICABLE TO PERFORMANCE MEASURES (LOWE & SHAW 1968) PG316
" THE DESIRE TO PLEASE SUPERIORS IN A COMPETITIVE MANAGERIAL HIERACHY "
THE REWARD SYSTEM
INFLUENCE OF RECENT PRACTICE & NORMS
INSECURITY OF MANAGERS
REWARD SYSTEM PG316
"CARROT" OR "STICK" APPROACH
REWARDS
FINANCIAL : BONUS,PROFIT SHARING
NON FINANCIAL : PROMOTION, BIGGER BUDGET, BETTER PERFORMANCE APPRIASAL
THE PROCESS OF TYING REWARD TO PERFORMANCE ISSUES PG317
TIMING
REWARDS NEED TO BE TIMELY
EG : SEPARATION OF SHORT TERM INCENTIVE PLANS & LONG TERM INCENTIVE PLANS
GROUP vs INDIVIDUAL PERFORMANCE
THE CHOICE BETWEEN INDIVIDUAL AND GROUP REWARDS DEPENDS TO THE EXTENT ON THE INTERDEPENDENCIES THAT EXIST WITHIN THE ORGANISATION
HIGH LEVEL OF INTERDEPENDENCY MEANS IDENTIFYING INDIVIDUAL PERFORMANCE AND THEN PAYING APPROPRIATE COMPENSATION IS DIFFICULT
PERFORMANCE MEASURES AND PERFORMANCE TARGETS
REWARDS SYSTEMS
LEVEL OF ANALYSIS FOR PERFORMANCE :
LEVEL 1 : TARGET
LEVEL 2 : TREND
LEVEL 3 : BENCHMARK