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Level 3 Diploma in Management Chapter 3 Managing and Improving Performance [Intentionally Blank]
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Chapter 3 - Managing and improving performance
Managing and Improving Performance
(part of Units M&L 11 and M&L 15)
Contents
Unit Specifications .................................................................................................................... 1
Introduction ............................................................................................................................... 3
Understanding the Role, Functions and Processes of Management ........................................ 4
Planning Co-ordinating and Controlling Work ........................................................................... 5
Planning Tools and Techniques................................................................................................ 6
Controlling Work Streams ....................................................................................................... 11
Ensuring that Team Objectives are Met .................................................................................. 11
Organisational Vision, Mission Statements and Objectives .................................................... 12
Organisational Goals and Objectives – Strategic Plans.......................................................... 12
Vision to Objectives ................................................................................................................ 13
Business Objectives and Performance Measures .................................................................. 14
Monitoring and Measuring Performance ................................................................................. 15
Ensuring Staff Understand Monitoring and the Features of Measurement Systems ............... 16
Quality Standards and Their Place in Performance Measurement ......................................... 16
Key Performance Indicators.................................................................................................... 17
Monitoring and Reporting on Business Performance .............................................................. 18
Reporting Timetables ............................................................................................................. 20
Management Information Systems ......................................................................................... 20
Business Outputs and Outcomes ........................................................................................... 20
Understanding the Management of Team Performance .......................................................... 22
Reasons for Under-performance in Work Teams ................................................................... 25
Goal Setting in Managing Performance .................................................................................. 27
Production and Operations – Managing Quality ..................................................................... 31
Quality Control or Quality Assurance? .................................................................................... 33
Lean Manufacturing ................................................................................................................ 37
Techniques for Performance Improvement............................................................................. 43
Quality Circles......................................................................................................................... 44
Amending Priorities and Plans to Take Account of Changing Circumstances ........................ 44
Working to Organisational and Team Priorities ...................................................................... 47
Chapter 3 - Managing and improving performance
Action Planning and Scheduling Work .................................................................................... 48
Constraints on Amending Priorities and Plans ........................................................................ 51
Understanding the Principles of Effective Decision Making Defining a ‘Decision’ .................. 52
Assessing the Impact of Decision Making ............................................................................... 53
Obtaining Sufficient Valid Information to Enable Effective Decision Making ........................... 56
Root Cause Analysis – Rational Problem Solving .................................................................. 56
Aligning Decisions with Business Objectives, Values and Targets ......................................... 61
Validating Information ............................................................................................................. 61
Addressing Issues that Hamper the Achievement of Targets and Quality Standards ............. 62
Dealing with Data and Information .......................................................................................... 63
Organising and Summarising Data ......................................................................................... 64
Methods of Making Decisions ................................................................................................. 70
Budgets and Associated Operational Constraints .................................................................. 72
Bibliography/Further Reading.................................................................................................. 74
Chapter 3 - Managing and improving performance
Unit Specifications
The contents of this chapter address the learning outcomes NOT greyed-out in the following
tables setting out the M&L11 and M&L 15 units.
Title
M&L 11 Manage Team Performance
Skills CFA Ref.
M&L
Level
3
Credit Value
4
GLH
21 11
Learning Outcomes
Assessment Criteria
The learner will:
The learner can:
1.
Understand the
management of team
performance
2. Be able to allocate and
assure the quality of work
1.1 Explain the use of benchmarks in
managing performance
1.2 Explain a range of quality management
techniques to manage team performance
1.3 Describe constraints on the ability to amend
priorities and plans
2.1 Identify the strengths, competences and
expertise of team members
2.2 Allocate work on the basis of the strengths,
competences and expertise of team members
2.3 Identify areas for improvement in team members’
performance outputs and standards
2.4 Amend priorities and plans to take account of
changing circumstances
2.5 Recommend changes to systems and
processes to improve the quality of
work
3. Be able to manage
communications within
a team
3.1 Explain to team members the lines of
communication and authority levels
3.2 Communicate individual and team objectives,
responsibilities and priorities
3.3 Use communication methods that are
appropriate to the topics, audience and
timescales
3.4 Provide support to team members when they
need it
3.5 Agree with team members a process for
providing feedback on work progress and any
issues arising
3.6 Review the effectiveness of team
communications and make improvements
1 Chapter 3 - Managing and improving performance
M&L 15 Principles of Leadership and Management
Skills CFA Reference: M&L 15; Level: 3 ; Credit Value: 8; GLH 50:
Learning Outcomes Assessment Criteria
1.1
Understand the
Explain the importance of defining the objectives, scope
principles of effective
and success criteria of the decisions to be taken
1.2 Assess the importance of analysing the potential impact of
decision making
decision making
1.3 Explain the importance of obtaining sufficient valid
information to enable effective decision making
Explain the importance of aligning decisions with
business objectives, values and policies
Explain how to validate information used in the decision
making process
Explain how to address issues that hamper the achievement
of targets and quality standards
2.1 Explain the difference in the influence on managers and
Understand
leadership styles and
leaders on their teams
2.2 Evaluate the suitability and impact of different leadership
models
styles in different contexts
2.3 Analyse theories and models of motivation and their
application in the workplace
3.1 Analyse a manager’s responsibilities for planning,
Understand the role,
functions and
coordinating and controlling work
3.2 Explain how managers ensure that team objectives are met
processes of
3.3 Explain how a manager’s role contributes to the
management
achievement of an organisation’s vision, mission and
objectives
3.4 Analyse theories and models of management
3.5 Explain how the application of management
theories guide a manager’s actions
3.6 Explain the operational constraints imposed by budgets
4.1 Explain the relationship between business objectives
Understand
performance
and performance measures
4.2 Explain the features of a performance measurement
measurement
system
4.3 Explain how to set key performance indicators (KPIs)
4.4 Explain the tools, processes and timetable for monitoring
and reporting on business performance
4.5 Explain the use of management accounts and
management information systems in performance
management
4.6 Explain the distinction between outcomes and outputs
Tables extracted from Skills CFA Specifications
2 Chapter 3 - Managing and improving performance
Introduction
This Chapter and the various activities within it, is designed to complement the third
workshop in the Skills Team Management Diploma programme and introduce you
to the principles of objective setting and improving performance. Key skills are
explored that will enable you to tackle these elements of your role or future role as a
line manager with confidence. The activities will require you to consider theories that
align with each topic but, importantly, you will be expected to make parallels with your
own experience in the workplace, which will help in ensuring that you can lead your
team effectively.
This Chapter of the Workbook covers learning outcomes 1 and 4 of Unit M&L 15
and learning outcome 1 and part of 2 in Unit M&L 11 within the Diploma in
Leadership and Management. Learning outcomes 2 and 3 have been covered in
Chapter 1 of the workbook.
3 Chapter 3 - Managing and improving performance
Understanding the Role, Functions and Processes of Management
The Role of Managers and Management
A key role of managers and management is to oversee the work undertaken by the
organisation. Managers have, in general terms, quite broad responsibilities.
Activity: Obtain the job descriptions of, say, 3 line managers in your organisation.
What specific responsibilities do they have? What are the key elements of their roles?
Managers’ responsibilities include overseeing delivery of the organisation’s
performance and output, through effective:
Resource management, including recruitment of staff, and prioritisation and coordination of work;
Trouble-shooting and problem-solving;
Employee motivation and reward;
Resolution of workforce conflict and maintenance of a positive working
environment;
Enforcement of quality and safety standards;
Employee development, including training and succession planning;
Provision of timely, meaningful information and advice to more senior managers.
They can also contribute by identifying and promoting talent;
Ensuring communication upwards and downwards;
Providing the workforce with a clear understanding of their roles and
responsibilities, enabling them to complete work allotted to them;
Explaining to the workforce management decisions and direction; and,
Providing more senior managers with feedback from the workforce,
representing, as appropriate, the concerns of the workforce.
4 Chapter 3 - Managing and improving performance
Planning Co-ordinating and Controlling Work
Planning, co-ordinating and controlling work sit right at the core of a manager’s role and
are fundamental to ensuring organisational efficiency and effectiveness.
A plan can be defined as: ‘A description of how we intend to reach an objective’.
Planning is the process of determining how the desired outcome will be achieved.
Planning enables the manager to establish what tasks need to be undertaken, the
resources necessary to complete the tasks and how work should be scheduled and
undertaken.
In essence, there are 2 types of plan – not good and bad! – but narrative and graphical.
The 3 most popular planning tools are the Work Breakdown Structure (a form of ‘To Do
List’ or simple Action Plan), the Gantt Chart and Network Diagrams (the product of
Project Evaluation and Review Technique). Whichever planning tools you choose to
use you need to understand the concept of ‘estimating’.
Estimating
Estimation is simply an assessment of:
The likely time an activity will take; and,
The likely cost of that activity.
Estimation itself is simply your ‘best guess’ and is usually based upon experience. It is
also something we do every day: for example, we estimate how long it will take for us to
complete a piece of work or to travel into the office. Where you lack experience in a
particular discipline, you can seek estimations from colleagues who are expert in the
field, by conducting research or, indeed, by seeking input from experts outside of your
own organisation. For example, if you were planning to decorate your kitchen and you
had never decorated a kitchen previously, you might draw on experience of decorating
other rooms, adjusting the estimate to reflect the greater or lesser complexity of
decorating a kitchen. Similarly, you might obtain an estimate or quote from a local
decorator and adjust that to reflect your competence when compared with the
professional tradesperson.
One way of estimating is to assess ‘best case’, ‘worst case’ and ‘middle case’ where
the ‘best case’ represents your most optimistic estimate and the ‘worst case’ your most
pessimistic estimate; the ‘middle case’ being the most likely. So, to decorate a kitchen,
we might think it will take 3 days ‘best case’ and 5 days ‘worst case’; you might then
decide to settle upon an estimate of 4 days.
5 Chapter 3 - Managing and improving performance
By accurately estimating the level of effort and the time that will be required to
successfully complete the work, managers retain credibility and authority. The most
common reason for poor estimation is a failure to take account of the many variables
which are difficult to control.
For example:
Other competing priorities;
Annual holidays;
Sickness;
Equipment failures;
Missed deliveries;
Unforeseen interruptions; and,
Quality failures.
Some managers, therefore, might choose to err on the ‘worst case’ estimate.
Planning Tools and Techniques
Work Breakdown Structures
Work Breakdown Structures (WBS) are a useful tool in planning. A form of simple ‘To
Do List’, they allow the manager to record every single activity that needs to take place.
In its raw form the WBS is simply a list of tasks with the estimate of the effort and
duration of each task, although it becomes a comprehensive planning method with the
addition of just a little extra detail, such as Start Date, End Date and Who? A template
WBS is provided overleaf.
Of course, at this stage, it would be useful to understand the difference between ‘effort’
and ‘duration’. In simple terms, ‘effort’ is the actual time it will take to complete the
work, while ‘duration’ is the period of time that has been allotted for the work to be
completed. For example, if you were painting the garden fence, you might estimate that
the work will take 10 hours effort but will require a duration of 5 days to complete; this is
because you will be painting in the evening after you return from work and there is a
maximum of 3 hours light available to you at the end of the day.
6 Chapter 3 - Managing and improving performance
Activity: Using the WBA template below, plan a small work project. For example, plan how you would decorate the kitchen at home
or organise an office party.
Task
Task Description
Effort
Duration
End Date
Who?
7 Start Date
Chapter 3 - Managing and improving performance
Gantt Charts
Gantt Charts are another extremely useful tool for planning control and coordination of
work. Also they are effective for budgeting, and for reporting and presenting and
communicating plans and progress easily and quickly. However, as a rule, Gantt Charts
are not as good as a Critical Path Analysis Flow Diagram for identifying and showing
interdependent factors, or for 'mapping' a plan from and/or into all of its detailed causal
or contributing elements.
You can construct a Gantt Chart using MSExcel or a similar spreadsheet. Every activity
has a separate line allowing you to create an overall time-line for the duration of the
work (the example below – one day decorating a room – shows hours, but normally you
would use weeks, or for very big long-term jobs, months). You can colour code the time
blocks to denote type of activity (for example, intense, watching brief, directly managed,
delegated and left-to-run). You can schedule review and insert break points. At the end
of each line you can show as many cost columns for the activities as you need,
showing, for example, planned spend, actual spend and spend variances, and
calculate any totals, averages, and ratios that you need.
Gantt Charts are probably the most flexible and useful of all management planning
tools. However, they do not very easily or obviously show the importance and interdependence of related parallel activities. Nor do they clearly show the necessity to
complete one task before another can begin, as a Network Diagram will do.
Gantt Chart Example – Decorating a Room (Day One)
Hours
Task Activity
1
2
3
4
5
6
7
8
9
10
11
12
Remove furniture and curtains
Dust and hoover room
Sand down blemishes and fill holes
Wash walls, skirting boards and doors Tape over plugs/switches/wall lights
Mix paints
Paint walls
Paint woodwork
Remove tape and touch up
Tidy away
Network Diagrams or Project Evaluation and Review Technique
A second commonly used planning tool is the Network Diagram or Project Evaluation
and Review Technique (PERT). PERT is a specialised method for identifying related
and interdependent activities and events. While PERT is not normally relevant in simple
management planning, it is invaluable for more complex planning, particularly when
timings and interdependency issues are crucial. PERT analysis commonly feeds into
8 Chapter 3 - Managing and improving performance
what is known as Critical Path Analysis. 'Critical Path Analysis' sounds very
complicated, but it is a very logical and effective method for planning and managing
complex projects. A critical path analysis is normally shown as a flow diagram, whose
format is linear (organised in a line), and specifically a time-line.
The Critical Path on any work project is defined as ‘the longest route through the
project’; that is, the total time that it will take for the longest sequence in time of
interdependent events/activities to complete. Critical Path Network diagrams are very
good for showing interdependent factors where timings overlap or coincide. They also
enable a plan to be scheduled according to a timescale.
Taking, as an example, organisation of a family party, we can prepare a Network
Diagram and undertake a Critical Path Analysis. We know what activities are involved:
identifying a venue, booking a venue, booking catering and entertainment, inviting
family and friends to attend, ordering a cake, decorating the room and clearing up.
Some of these activities can happen in parallel and some are interdependent. That is to
say, if the organiser (manager) tried to book catering before the number of attendees
was known, it could be a very costly mistake! Similarly, certain tasks must be started
before others, and certain tasks must be completed in order for others to begin. For
example, the venue must be booked before invitations can be sent out and, obviously,
we cannot clear up until after the party.
An example network diagram is on the next page. The Critical Path Analysis calculation
is shown at the bottom of this simple network diagram.
9 Understanding the Principles of Leadership and Management
Chapter 3 - Managing and improving performance
Example Network Diagram
Collect
keys
Book disco
and band
Decide to
have a party
Identify and
view venues
Pick venue
Set-up
venue
Invite guests
Party
Book caterer
Clear-up
Set-up
venue
Pick
menu
Pick
cake
Day 1
Day 1 + 7
Day 8 + 1
Day 9 + 7
Day 16 + 7
69
Day 23 + 14
Day 37
Day 38
Chapter 3 - Managing and improving performance
Controlling Work Streams
In exercising control over work, there are 5 key activities a manager will undertake,
namely:
Ensuring quality standards are met and products and services are ‘fit for
purpose’;
Managing the team:
Ensuring that work remains within budget;
Ensuring that outputs are delivered on time; and
Managing risk and issues.
Ensuring that Team Objectives are Met
Clear direction for the team aimed at achieving the team objectives is detailed in the
team plan. The role that each person will play in achieving the team objectives needs to
be defined within the plan. Responsibilities will need to be allocated, sufficient
resources provided and each person briefed and made accountable for their part in the
implementation of the plan. Wherever possible and when time permits it is worth
including the team in preparation of the plan, so that they have shared ownership of the
results. Each team member needs to understand their role in terms of their individual:
Responsibility, what they have to do;
Accountability, what they have to achieve and by when; and,
Authority, the level of power and autonomy they have in achieving the
objectives.
SMART team objectives provide a solid framework for monitoring and control. The
manager’s job in achieving SMART objectives is to ensure that work is completed to
quality, cost and time. This will require ongoing assessment of progress towards
completion of the plan and making adjustments as required en route to completion.
Activity: Cite an example of where, in delivering a recent team objective, you have had
to make adjustments to the plan to ensure that you were able to achieve the objective
to quality, cost and time. List each adjustment and rationale for it.
11 Chapter 3 - Managing and improving performance
Organisational Vision, Mission Statements and Objectives
Most organisations have a vision and/or mission statement that defines its purpose.
Vision and Mission statements are the inspiring words chosen by successful leaders to
clearly and concisely convey the strategic direction of the organisation, communicating
the intentions of the organisation to those people who have an interest in the
organisation. The term commonly used for people with an interest in an organisation is
‘stakeholder’.
Both types of statement are slightly different in their intent, although both typically
convey the direction of the organisation. Vision Statements define the organisation’s
purpose, reflecting the values of the organisation rather than bottom line measures of
success. For employees, it gives direction about how they are expected to behave and
inspires them to give their best. Shared with customers, it shapes customers'
understanding of why they should work with the organisation.
For example, look at the Vision Statement of the largest fast-food company in the
World, McDonald’s:
‘McDonald's vision is to be the world's best quick service restaurant experience.
Being the best means providing outstanding quality, service, cleanliness, and value,
so that we make every customer in every restaurant smile’
A Mission Statement typically defines the organisation's purpose and primary
objectives. Its prime function is internal – to define the key measure or measures of the
organisation's success – and its prime audience is the leadership team and
stockholders. The mission statement therefore focuses on what constitutes success for
the business. For example, consider the Mission Statement for The Walt Disney
Company:
‘The Walt Disney Company's objective is to be one of the world's leading producers
and providers of entertainment and information, using its portfolio of brands to
differentiate its content, services and consumer products. The company's primary
financial goals are to maximize earnings and cash flow, and to allocate capital
profitability toward growth initiatives that will drive long-term shareholder value.’
Organisational Goals and Objectives – Strategic Plans
Once a vision and mission has been formulated, it is usual to have a set of
organisational goals, which are the medium for setting out the ‘big picture’ of what the
organisation is seeking to achieve. A goal describes a high-level target that an
organisation seeks to achieve over the long-term (3-5 years). Whilst goals are usually
quite difficult to measure and quantify, they set the direction of the organisation and
support the mission statement.
Objectives are more specific statements that describe what the organisation wants to
accomplish in the short-term (up to 12 months). The successful completion of short 12 Chapter 3 - Managing and improving performance
term objectives should contribute to the achievement of long-term goals. Objectives
should be SMART: specific, measurable, achievable, realistic, and time-bound. Wellconstructed objectives should incorporate their own key performance indicators.
The significance of the measures chosen cannot be overstated – without measures it
would be very difficult if not impossible to manage the implementation of the objectives.
Usually, the Vision, the Mission, the Organisational Goals and the Organisational
Objectives would be set out in the Strategic Plan. The strategic plan would permeate
through the organisation in the form of action plans that serve to define how the
objectives will be achieved. This whole process should ensure that the organisation itself
has clear definition around what it is looking to achieve and that every person in the
organisation understands his or her role within it.
The management function would usually be expected to ensure the delivery and
implementation of strategic goals and objectives, as set out by senior managers,
through development and management of action plans. Where organisations operate
without having an effective strategic plan they tend to ‘drift’ and become inefficient and
ineffective. Ultimately, they will be very unlikely to achieve competitive advantage
without one. Graphically the process looks like this:
Vision Mission Goals Organisational objectives Team objectives Vision to Objectives
13 Chapter 3 - Managing and improving performance
Business Objectives and Performance Measures
Activity: Create a succinct statement stating why having a comprehensive set of
performance measures is so important in management.
There is an old business adage that says ‘you can’t manage, what you can’t measure’.
And it is very true. If you have no yardstick or benchmark against which to measure
performance you will not know how well you have performed and you will not know
when and/or to what extent you have achieved your objectives. This is why the ‘M’ in
the SMART objectives acronym is so crucial.
14 Chapter 3 - Managing and improving performance
Monitoring and Measuring Performance
Activity: In what ways might you monitor performance?
There are a variety of possible responses relating to monitoring of both individuals and
teams, which might include:
Independent quality inspections or audits;
Team quality monitoring/sampling;
Customer feedback;
Satisfaction surveys;
Observations by team leader or others;
Production/operation records (for example, recording daily output); and/or,
Progress reports – including production graphs, etc.
15 Chapter 3 - Managing and improving performance
Ensuring Staff Understand Monitoring and the Features of
Measurement Systems
In monitoring performance, staff will need to know what standards are expected and
how they will be measured against those standards. The measurement system has to
incorporate:
A set of measures
A monitoring process
Facility to interpret the feedback regarding performance gleaned in monitoring
Facility to adjust elements of the system if the performance is not on track for
achieving the organisational objectives.
This will often be communicated via organisational policies and procedures but that
alone is unlikely to be sufficient. The line manager’s role will include responsibility for
disseminating task requirements, including required standards, and ensure that they
are understood, implemented and achieved. Ultimately, it is an on-going
communication process.
Quality Standards and Their Place in Performance Measurement
A quality standard is a ‘concise statement describing the expected level of service
performance or product quality’ (AH Raymondson, 2012). One widely applied definition
of quality is ‘fit for purpose’ (PRINCE2). This deserves a little reflection as to the
implications of this definition for controlling work. Fit for purpose is effectively ‘adequate’
– that is just right for the job in hand. It is not ‘high quality’ – which is often taken as the
meaning of ‘quality’ in everyday conversation. Of course, there are situations where ‘fit
for purpose’ will require high quality.
Much of a manager’s time will be concerned with ensuring that products and services
are delivered to the requisite standard (quality), at the expected cost and in the
timescales required. To enable this to happen we need to understand what standards
are to be applied and how to control performance in team production and/or service
delivery.
Activity: What do you consider to be the purpose of quality standards?
16 Chapter 3 - Managing and improving performance
The main reason organisations have quality standards is to ensure that they –
whatever their business – consistently meet customer requirements, thereby ensuring
customers continue to buy their products or use their services. Standards provide
benchmarks for performance.
Key Performance Indicators
There are numerous systems for measuring performance used in organisations. At
supervisory level, the focus is more on measuring work performance, output and quality
in fairly narrow, but clearly defined, areas. To achieve this we need to be able to have a
‘benchmark’ or ‘indicator’ of performance against which we can measure the work
performance, output and quality. These measures are often referred to as key
performance indicators (KPIs).
Key performance indicators come in three main types:
Input KPIs measure assets and resources used (purchases made) to achieve
business results. Examples might include:
•
•
•
Process KPIs measure the efficiency or productivity of a business process.
Examples might include:
•
•
•
•
•
Funding for training;
Raw materials; and
Quality of raw materials (e.g. grade 1, 2, 3, etc).
Production time;
Days to deliver a completed order;
Number of days to reply to customer requests;
Number of personnel trained in use of a piece of equipment; and,
Days taken to fill vacancies.
Output KPIs measure the financial and non-financial results of business
activities. Examples might include:
•
•
•
•
•
Sales revenue;
Number of new customers;
Increase in full-time employees;
Return on investment; and,
Customer satisfaction.
A mix of the three types of KPIs – process, input, and output – would be applied to give
a broad picture of individual, team or organisational performance. Any variances then
need to be investigated and appropriate action needs to be taken to address the
variance.
17 Chapter 3 - Managing and improving performance
Activity: List at least 2 example KPIs that are, or could be, applied in your monitoring
of performance (and underperformance) of your team:
Monitoring and Reporting on Business Performance
The Balanced Scorecard
A management system that enables measuring and reporting progress towards
organisational objectives, the Balanced Scorecard was developed by Robert Kaplan
and David Norton. The Balanced Scorecard provides a quick, but comprehensive
picture of the organisation’s performance, focusing on 4 main areas of business:
Area of Focus
Typical Issues Measured
Finances
Measures relating to the financial health of the organisation
Customers
Factors such as quality of goods and/or services, delivery and
overall customer satisfaction
Internal Business
Processes
Internal organizational functions, and measurements of their
efficiency and effectiveness.
Learning & Growth
Ability of an organization to adapt to the changing
environment of business. Retention, ongoing
education/training and effectiveness of access to
organisational communications
Departmental measures should all serve the overall goals of the organisation and flow
out from the high-level measures within the Balanced Scorecard. The value of the
balanced scorecard approach will only be as effective as the measures within it.
Consequently, time needs to be spent to ensure that the organisation has the best
18 Chapter 3 - Managing and improving performance
measures (and not too many) to give appropriate focus on achievement of the
organisational goals.
Whilst Norton and Kaplan define their parameters for their balanced scorecard, many
organisations adapt the principle to give broader coverage of business activity and
include what is most relevant to them.
For example, you might include and measure performance of:
Suppliers
Environmental issues
Competitors
A well-constructed and implemented balanced scorecard is an extremely useful tool for
identifying inefficiencies in processes and for monitoring and reporting on business
performance.
Activity: Thinking about your own work team and the headings provided by Norton and
Kaplan for the Balanced Scorecard. Create 2 measures for each of the areas of focus
that would be relevant to your team.
Area of Focus
Measure
Finances
Customers
Internal Business
Processes
Learning & Growth
19 Chapter 3 - Managing and improving performance
Reporting Timetables
Using the balanced scorecard or other reporting tools such as management reports,
spreadsheets, budgeting profiles and accounting statements, an organisation would have
a timetable for reporting of information against the KPIs set out at the beginning of a
financial year. Managers would be expected to submit reports (typically a week
beforehand) for collation prior to a management meeting to discuss progress, explain
discrepancies, agree amendments and make decisions relating to achievement of
organisational objectives. Such joint management meetings would usually be held
monthly but more or less frequently often to suit the organisational need.
For team members, exposure to the balanced scorecard plan helps impress the
organisational goals and objectives and, with objectives cascaded down to team level,
help individuals’ appreciate their roles in delivery of those objectives.
Management Information Systems
Management information systems (MIS) provide managers with the information required
to manage the organisation. Typically, MIS are IT-based systems that retain and
process information that can be analysed for ensuring the smooth running of the
organisation, including for decision-making and problem solving
A comprehensive and organisation-wide MIS might include information relating to:
Sales;
Stock holdings;
Human resources;
Supply chains;
Customers and customer relationship management;
Projects;
Business data;
Finance and accounting;
Budgeting;
Planning and forecasting; and/or
Strategy.
The fundamental benefit of MIS is that it provides co-ordination across companies and
organisations of management information, to enable easier reporting and analysis.
Summaries of performance can be programmed to provide reports by exception when
things are outside the programmed KPIs.
Business Outputs and Outcomes
All business performance should lead to end results. The end results can be viewed as
products and services or less specifically outputs and outcomes. Outputs are the result
of processes that are produced and outcomes are the effects that those outputs have.
Business activities can be viewed as a progression from inputs through processes to
outputs and outcomes, shown graphically below:
20 Chapter 3 - Managing and improving performance
Processes Outcomes Inputs to Outcomes (Format AH Raymondson, 2013)
Activity: Imagine the case of a building company that has built a small, modern estate
of houses on the outskirts of a town. What might be the outputs and potential outcomes
related to building the estate?
The output is the new estate of houses. The outcomes might include, for example:
Satisfied purchasers (or not);
A happy landowner who profited from the sale of the land;
Dissatisfied locals who did not want the estate building; and/or
Problems for the local primary school and GP surgery, both of which have
limited places available to cater for the new families.
Ultimately, the outcomes are about the impact that the output has on stakeholders.
21 Chapter 3 - Managing and improving performance
Understanding the Management of Team Performance
Using Benchmarks in Managing Performance
In looking at how benchmarks might be applied in the workplace we first need to
establish what we mean by a benchmark.
Activity:
a. Create in your own words a definition of a benchmark.
b. State why you believe benchmarks are necessary for managing performance.
a.
b.
22 Chapter 3 - Managing and improving performance
A benchmark:
‘Standard or a set of standards, used as a point of reference for evaluating
performance or level of quality. Benchmarks may be drawn from a firm’s own
experience, from the experience of other firms in the industry, or from legal
requirements such as environmental regulations’
(The Business Dictionary)
The word benchmark, has its roots in the horizontal marks stone masons made in
structures to have a point of reference to fix a ‘bench’ – a level point from which to
work. In business it has come to mean the standard against which performance can be
measured. In other words, if we say we want ‘good’ results, the benchmark is the
description or measure of what ‘good’ looks like. Benchmarks are goals to aim for.
Benchmarks can be thought of as ‘best practice’. Similarly, they can be thought of as a
baseline or starting point from which to aim for a higher benchmark.
Key performance indicators on the other hand are specific measurements for precisely
measuring performance. For example, a key performance indicator might be the
processing a specific number of requests a day. KPIs can be used as a way to
measure progress toward the benchmark goal.
Whilst we need to have measures of quality for products – for example, a product might
need to be a certain length to within +/- 2mm – we need also to have ways to manage
the quality of team performance. After all, the quality of team performance significantly
affects the quality of products and services delivered.
What is Team Performance?
Activity: Create in your own words a definition of what team performance means within
a business or organisational context:
23 Chapter 3 - Managing and improving performance
Team Performance:
‘Performance that is externally focused and concerns meeting the needs and
expectations of outsiders such as customers, company colleagues or fans. It is
assessed using measures such as quantity, quality and time’
(Source: Pearson)
Activity: In what documents might standards that relate to team performance at work
be outlined and defined:
Many of the organisational requirements that relate to standards of performance will be
set out in company policy documents, employee contracts and within performance
appraisals. Many of the behavioural standards that are set out in these various
documents are legal requirements: for example, equal opportunities policies may be
based on the Race Relations Act (RRA) (1976).
Policies and Procedures
Policies are guidelines that regulate ‘the way things are done’ in an organisation. They
set out expectations regarding how certain matters will be dealt with and set out the
parameters of things such as required standards, behaviours and the organisational
stance on particular issues. Policies tend to reflect the bigger issues faced by
organisations whilst procedures provide a framework for dealing with day-to-day
matters in an organised and consistent way. Procedures set out the way that policies
will be implemented. Policies guide decision-making and procedures drive action.
In combination, policies and procedures should:
Make clear the organisation’s position on important issues;
Define what is expected in terms of performance from employees and the
consequences of any breaches of the stated expectations; and,
Be consistent.
24 Chapter 3 - Managing and improving performance
Policies may cover a wide range of different subjects from health and safety through to
complaints handling and disciplinary procedures. Examples of subjects covered
include:
Time keeping;
Dress codes;
Absenteeism;
Conduct at work;
Bullying and harassment;
Data protection;
Levels of performance;
Professionalism in relationships;
Requirements to undertake overtime to fulfil output performance;
Quality assurance issues;
IT policy; and,
Environmental protection.
Reasons for Under-performance in Work Teams
If we fully understand the reasons for underperformance them we are much more likely
to be effective in managing team performance
Activity: List at least 6 reasons why team members underperform:
25 Chapter 3 - Managing and improving performance
There are many reasons why an employee may perform poorly. Some of the common
reasons for employee under-performance include:
Not knowing what is expected because goals are not clear or have not been set;
Breaching standards or workplace policies because they are unaware of the
standard or policy or because the consequences of breach are unclear;
Interpersonal differences – a negative or unpleasant atmosphere or low morale
reduces performance levels;
They lack the capability, knowledge or skills required to do the job;
Lack of confidence;
Lack of feedback – they do not know whether they are doing a good job;
Unsatisfactory working conditions;
Lack of personal motivation;
Personal issues such as family stress, physical and/or mental health problems or
issues with alcohol or drugs;
Misunderstandings about what or how things should be done; and/or,
Bullying and or harassment.
It goes without saying that employees have a responsibility to perform to satisfactory
level at work. However, a large part of the responsibility for creating a context in which
people can perform to their best lies with the team leader.
Many of the characteristics of poor performance come down to weak leadership. It falls
to team leaders to address the likely causes of poor performance and take the lead to
intervene where necessary to ensure performance levels are maintained – as
highlighted in the following model:
Low Performance Team Characteristics
Lack of clear goals
Conflict (inc. fear of conflict)
Avoidance of responsibility
Differing values
Lack of trust
Low self-belief
Weak
Leadership
Prime Characteristics of Low Performance
26 Poor
Team
Performance
(AH Raymondson, 2012)
Chapter 3 - Managing and improving performance
Goal Setting in Managing Performance
There is a long standing management adage that: ‘you cannot manage that which you
cannot measure’. Implicit in this is that you need to know what you are entitled to
expect in relation to performance and your team members need to know what
standards of performance they are required to meet. In short, their individual
contribution to the team’s performance needs to be measureable. If it is measureable
then a judgement can be made as to whether their performance has been satisfactory.
That is why it is important to be able to set measureable goals and objectives and why
the SMART acronym is so useful in setting out goals, which we will consider once we
have examined what goals and objectives actually are.
Goals and Objectives
Activity: Create in your own words definitions of ‘goals’ and of ‘objectives’ within a
business or organisational context:
Goals:
Objectives:
27 Chapter 3 - Managing and improving performance
A goal is:
‘An observable end result to be achieved within a more or less fixed timeframe.’
(The Business Dictionary)
An objective is:
‘An end that can be reasonably achieved within an expected timeframe and with
available resources. Objectives are a tool that underlies all planning and
strategic activities.’
(The Business Dictionary)
In short, a goal is a general statement of achievement and an objective is a specific
and measurable action you take to reach the goal by a certain time. The word
‘objective’ is often used interchangeably with the word ‘target’. Examples of goals and
objectives might be:
Example 1
A personal goal:
‘To achieve outstanding success in my sales team.’
A personal objective:
‘To have achieved the Top Sales Executive Award by the end of next
month.’
Example 2
A business goal:
‘To create an easily found and searchable web presence to promote and
sell our products.’
A business objective arising from the above business goal:
‘By the end of July 2012, the Company’s main website will be redesigned, re-built, debugged, re-launched to the web and optimised to
achieve 100,000 hits and > 750 unit sales per month by October 2012.’
Objective Setting
To allocate work and measure performance effectively you will need to agree
objectives with team members you are placing work with. The objectives need to be
aligned with those of the organisation. For example, if you were running a
manufacturing team that produces parts for engines, it would be nonsense to have an
28 Chapter 3 - Managing and improving performance
objective around producing as many parts as possible by the end of the quarter, if stock
levels were already too high.
The ‘SMART’ acronym has become pretty universal as a framework for setting effective
objectives; SMART stands for:
Specific
Measurable
Agreed/Achievable
Realistic
Timed (or Time-bounded)
The characteristics of each element of SMART are defined and amplified below:
Specific
Is the objective clear and precise?
What exactly has to be achieved?
Measurable
Do you know how to measure it (think quality, cost, time, quantity)?
Is it possible to easily ascertain whether the objective has been achieved?
Agreed/Achievable
Agreement with the person undertaking the work leads to greater commitment. Is
it achievable? Does the person undertaking the tasks involved see it as
achievable too?
Realistic
Do you (and the person undertaking the task) think that the target is sufficiently
challenging but also deliverable?
Timed
Have clear timescales for the achievement of the objective been set?
29 Chapter 3 - Managing and improving performance
Activity: Compile:
a. 3 SMART objectives for 3 tasks that you could give to individuals in your work
team.
b. 3 SMART objectives for your work team that align with organisational
requirements.
The most difficult part to achieve is identification of a good measure – a measure really
answers the question: how would you know when the task is completed to the requisite
standard?
Individual Objective
1.
2.
3.
Team Objective
Completion
Target
Time/Date
Measurement Criteria
Completion
Target
Time/Date
Measurement Criteria
1.
2.
3.
30 Chapter 3 - Managing and improving performance
Production and Operations – Managing Quality
Maintenance of quality standards needs to be managed. Quality management is
undertaken to ensure that products and services are fit for purpose and meet the
standards or specifications as required.
The 2 main approaches to quality management are quality control and quality
assurance:
Quality Control
Quality Control involves inspecting products to ensure that they meet the
required quality standards and sets out to identify any faults or defects. Those
responsible for quality control will inspect or test either a sample of each product,
or every product to ensure that the business is achieving the standards it sets for
itself or those set for it by others.
Some variation in materials used and in completed work is inevitable and it is the
function of quality control to ensure that work output is within defined tolerances.
Specifically, quality control is designed to ensure that a product or service meets
the stated specification and, assuming the specification is correct, customer
needs.
Activity: What do you view as the advantages and disadvantages of quality control?
31 Chapter 3 - Managing and improving performance
Your responses might have included:
Advantages
Quality control is a systematic approach to preventing sub-standard products
reaching customers
Often requires trained inspectors
Disadvantages
Could be costly to implement: rejected products usually are scrapped
Individuals are not necessarily encouraged to control the quality of their own
work
Profitability will be reduced if defect levels are high unless measures are
taken to remedy the root causes of poor quality
Quality Assurance
Quality Assurance is about having processes that ensure production/service quality
meets customer requirements. In quality assurance, there is more emphasis on ‘selfchecking’ by workers at each stage of production, rather than separate inspection by
specialist inspectors. It relies on developing a working culture that has commitment
from staff to get products right first time with the goal being ‘zero defects’.
The approach emanated from Toyota in the post-war period and has become aligned
with Total Quality Management (TQM). In TQM ‘quality chains’ are created where each
person or work team treats the receiver of their work as if they were an external
customer thereby creating a ‘right first time’ or ‘zero defects’ mind-set.
Advantages associated with quality assurance include:
Worker motivation can be lifted as they are more responsible for their own
standards and will get recognition for their work
Costs can be reduced because there should be less wastage as the product is
checked at every stage of production
It can reduce the feeling of being checked on by managers
32 Chapter 3 - Managing and improving performance
Quality Control or Quality Assurance?
The main distinctions between the 2 approaches are set out below:
Quality Assurance
A medium to long-term process; cannot be
implemented quickly
Quality Control
Can be implemented at short-notice
Focus on processes – how things are made Focus on outputs – work-in-progress and
or delivered
finished goods
Achieved by improving production
processes
Achieved by sampling and checking
(inspection)
Targeted at the whole organisation
Targeted at production activities
Emphasises the customer
Emphasises required standards
Quality is built into the product
Defect products are inspected out
Methods to Monitor Actual Performance against Production Targets
Monitoring requires systematic collection of data. Evaluation of the data collected gives
information to enable progress to be assessed and changes and adjustments to be
made where necessary.
The overall aim of monitoring performance is to ensure the efficiency and effectiveness
of the work. Through monitoring and evaluation, managers glean the information they
need to improve, maintain, change or develop employees’ and team performance.
Naturally, planning to make monitoring and evaluation part of the process should help
make implementation of systems for monitoring and evaluation much easier. The
systems need to be communicated to those involved, so that they understand what is
expected of them and what measures of efficiency and effectiveness will be applied to
them.
There are numerous systems for measuring performance used in organisations – one
example being the ‘Balanced Scorecard’ – which set out to measure key elements of
business performance across all major functions. At supervisory level, the focus is
more on measuring work performance, output and quality in narrower, but clearly
defined areas. To achieve this we need to be able to have a ‘benchmark’ or ‘indicator’
of performance against which we can measure the work performance, output and
quality. These measures are often referred to as key performance indicators (KPIs).
33 Chapter 3 - Managing and improving performance
Key Performance Indicators
Key performance indicators come in three main types:
Input KPIs measure assets and resources purchased used to achieve business
results. Examples might include:
•
•
•
Process KPIs measure the efficiency or productivity of a business process.
Examples might include:
•
•
•
•
•
Funding for training
Raw materials
Quality of raw materials (e.g. grade 1, 2, 3, etc)
Production time
Days to deliver a completed order
Number of days to reply to customer requests
Number of personnel trained in use of a piece of equipment
Days taken to fill vacancies
Output KPIs measure the financial and non-financial results of business
activities. Examples might include:
•
•
•
•
•
Sales revenue
Number of new customers
Increase in the number of full-time employees
Return on investment
Customer satisfaction
A mix of the three types of KPIs – process, input, and output – would be applied to give
a broad picture of your team or organisational performance.
Activity: List at least 2 examples of each type of KPI that are, or could be, applied in
your workplace:
34 Chapter 3 - Managing and improving performance
The 4 E’s – Economy, Efficiency, Effectiveness and Energy
Economy
Efficiency
Effectiveness
Inputs
Processes
Outputs
Change inputs
Change processes
Change outputs
Leave ‘as is’
Sensor
Feedback Loop
Energy
The 4 Es (Format: AH Raymondson, 2010)
The 4 Es diagram above represents operations management within an organisation,
which consists, at any level of analysis, of turning inputs into outputs. The components
are:
Inputs
Inputs always relate to economy and concerns issues around what is paid for
resources and materials. This might mean examining how materials might be
procured more cheaply or more expensively, if there was a good reason to do
so. For example, a more expensive product might last longer, offering increased
value for money.
Processes
Processes always relate to efficiency and concern the way things are done. In
other words, processes are the procedures, systems and methodology used to
construct a product or to deliver a service. Analysis at this stage of the loop is
about looking at how things could be done differently; that is, more efficiently to
achieve the desired objectives. Improvements and changes to the way things
are done (efficiencies) will often give economies too.
35 Chapter 3 - Managing and improving performance
Outputs
Outputs relate to effectiveness and concern what it is you are making or
delivering. Have you got the right outputs or should you consider changing what
it is you are producing or trying to achieve?
Feedback
Feedback is often overlooked but this is a very important element of resource
management. Without appropriate feedback from each stage it would not be
possible to analyse and manage the systems. A key aspect of feedback is
choosing the most appropriate measures. It is considered impossible to manage
aspects of work that cannot be measured.
Sensor
The sensor is merely a term used to represent the need to consider the
feedback you obtain from each of the stages – inputs, processes and outputs.
This is about analysing the feedback and applying judgements to decide one of
just 4 options. Specifically, to:
Change inputs
Change processes
Change outputs
Change nothing (leave things as they are)
Energy
The last ‘E’ – energy – is possibly the most important and concerns the energy
that people have in the workplace. The thinking here is that if people are
energised and highly motivated they will contribute to effective management of
resources and offer ideas for improvements in economy, efficiency and
effectiveness.
36 Chapter 3 - Managing and improving performance
Activity: Consider each element of the 4Es model and analyse it against
corresponding activities in your organisation. See if you can identify at least 3
improvements to each of the 4 Es that could be applied at work.
Lean Manufacturing
The issue of waste reduction and elimination is a key element of ‘Lean Manufacturing’
and has been adopted by many organisations as part of their drive to achieve
economic, efficient and effective planning of production. Do not be misled by the term
‘manufacturing’; Lean principles are just as applicable in virtually all business
disciplines and in all organisations.
Attributed to James Womack who introduced Lean in his book, The Machine That
Changed the World (1990), and famously adopted by Toyota, Lean Manufacturing is a
set of principles that enable simplification and organisation of work. The aim of Lean is
to reduce waste and to maintain equipment and the working environment, whilst
ensuring people are responsive to organisational and client needs.
37 Chapter 3 - Managing and improving performance
Activity:
1. How would you assess your organisation’s performance in relation to waste
management? List at least 3 things that would reduce waste and, by association, costs
within your organisation.
2. What are the benefits of effective waste management?
1.
2.
3.
38 Chapter 3 - Managing and improving performance
You will have numerous suggestions that are specific to your organisation (and some
which are generic to all organisations) but you may have considered:
Physical waste – such as paper, materials;
Under-utilised capacity, machinery, people;
Waste within processes and systems (bottlenecks in production, for example);
Excessive stockholdings;
Spending on unnecessary or lavish items;
Inflexibilities; and
Supplies arriving too early.
From Ford to Toyota
Henry Ford was instrumental in formulating the ideas associated with Lean
Manufacturing. His car assembly lines incorporated ‘continuous flow’ and enabled
production standards to be well controlled, resulting in minimal waste.
However, Ford's system lacked flexibility in that it produced the same product
continuously and did not easily allow for changes to the end product. Ford’s system
was a ‘push’ system, with Ford setting the level of production, rather than a ‘pull’
process responding to end user demand. This gave high stock levels of unsold cars
and wasted resources and money.
Ultimately, Toyota developed the Toyota Production System (TPS) which used ‘just-intime’ manufacturing methods (explained below) to increase efficiency and to become
one of the most profitable car manufacturers in the world.
Basic Principles of Lean Manufacturing
The focus of Lean Manufacturing is on discovering efficiencies – doing things better
and removing waste, whilst maintaining quality.
Lean Manufacturing takes a ‘customer-value’ perspective, seeking to establish what the
customer is willing to pay for. Customers invariably require value; they should not be
charged for defects or for the extra cost of holding excessive inventories. In short, they
should not pay for manufacturing waste – which is viewed as anything that does not
add value to the product.
Whilst not ignoring large improvements, Lean Manufacturing has a focus on small and
continuous improvement – Kaizen (Japanese for continuous improvement). The
cumulative effect of hundreds or thousands of incremental improvements combined
can lead to massive leaps in effectiveness.
Core concepts of Lean Manufacturing, include:
Just-in-Time – this is about minimising stock and resources by purchasing stock
only as it is required. Similarly products should only be distributed when
required. Production is organised in ‘batches’ and, by reducing each batch size,
quality can be monitored and defects corrected more effectively, thus reducing
the chances of poor quality in future batches;
39 Chapter 3 - Managing and improving performance
Kanban – sometimes called a ‘two bin system’. Just-in-Time is supported by
developing cues in the system to prompt replacement or reordering of stock. If
you had literally 2 bins of parts then an order card with a stock reorder reference
and detail of whom it should go to would be at the top of the second bin as a
prompt to order a new second bin.
Zero Defects – this is about getting the product or service right, first time. It is
designed to embed in the culture the principle that defects are unacceptable.
Eight Categories of Waste in Lean Manufacturing
There are eight categories of waste in Lean Manufacturing that should be monitored
and managed:
Overproduction
Producing optimum quantities to match demand.
Producing more is considered a waste of
resource
Waiting
such as lag time between stages of production
Inventory (work in progress)
stock levels and work in progress inventories
should not be excessive
Transportation
inefficient moving of materials should be
eliminated
Over-processing
spending unnecessary time on the product
Motion
people and equipment need to move between
tasks efficiently
Defects
time spent finding and correcting production
mistakes needs to be minimised
Workforce
efficient and effective use of work force
40 Chapter 3 - Managing and improving performance
Activity: In the last activity you examined waste in a general sense. To take this a
stage further, now consider the 8 categories of waste in relation to operations in your
own organisation. See if you can identify areas for improvement in each of the
categories in the following table:
Overproduction
Waiting
Inventory (work in progress)
Transportation
Over-processing
Motion
Defects
Workforce
41 Chapter 3 - Managing and improving performance
The 3 Key Stages of Lean Manufacturing
There are 3 key stages to Lean Manufacturing:
In Lean Manufacturing, waste is
considered to always exist and
improvements to systems and
processes can always be made – this
relates to continuous improvement or
Kaizen.
1. Identify waste
Value Stream Maps (VSM) are used to
illustrate and analyse the flow of
materials and processes along with the
output/product on to the customer.
VSM highlights how elements of
processes are connected and also
highlights waste. Additionally, it is used
to expose those processes that add
value and conversely those that do
not. This is followed by corrective
actions to improve processes and
systems.
2. Analyse the wastage, identifying
root causes
For identified wastage, establish what
is its root cause using, for example,
‘Root Cause Analysis’, brainstorming
or ‘Cause and Effect’ diagrams.
3. Solve the root cause, and repeat
the cycle
Decide what you need to do to resolve
the issue and implement
improvements to develop greater
efficiency.
Dealing with Variances in Performance
Targets relating to standards, and including measures relating to quality cost and time,
should be established and set out as part of the planning process. The indicators
applied will enable, through evaluation, any variances in performance – deviations from
the planned targets – to be identified and addressed where necessary.
42 Chapter 3 - Managing and improving performance
Tools to help in monitoring and evaluating variances might include, for example, graphs
and tables. A typical cost variance analysis might look like that set out below:
COST
Project Steps
Purchase Materials
Preparation of ground
Concreting
Erect Shed
Target
cost
(£)
450.00
200.00
250.00
125.00
Actual
(£)
507.00
185.00
245.00
135.00
Variance
(£)
57.00
-15.00
- 5.00
10.00
Total
(£)
57.00
42.00
37.00
47.00
Total variance+/- (Over-/Under-spend)
47.00
Example Cost Variance Table (KW Hamilton, 2009)
Techniques for Performance Improvement
Low levels of ability may arise from:
Tasks being too demanding or difficult
Lack of aptitude, knowledge or skill
Enhancing Ability
There are 5 main ways to address ability-related performance problems:
Re-supply (resources to do the job)
Re-train
Re-fit (different combinations of tasks and abilities, maybe by rearranging the
jobs of others)
Re-assign (the job or the job holder)
Release (let the employee go)
When low motivation is the cause, you need to work closely with the employee to
create a motivating environment in which to work. The most powerful motivators
identified by Herzberg were ‘recognition’ and ‘achievement’ so you might consider the
following as way to contribute to increasing levels of employee motivation:
Setting of agreed goals
Provision of constructive feedback and praise
Job enlargement
Job enrichment
Job rotation
43 Chapter 3 - Managing and improving performance
Performance Improvement Planning
The first stage in developing a performance plan is to evaluate the presenting
performance issue. You should:
Discuss the issue with the person
Evaluate your organisation's motivation system to ensure you are properly
recognising and rewarding people's contributions
Make sure you are measuring and rewarding the things that you actually want
to be done
Agree SMART performance goals
Have regular 1:1 development meetings with your team
Help your people keep their skills up to date through provision of appropriate
training and development
Create an environment where employees feel fully supported and comfortable
in their work.
Hold team meetings focused on improving team performance.
It is important that you discuss and agree upon a plan for improving performance with the
under-performing person. Record what you have agreed, along with dates for goals that
should be achieved; then monitor progress with the team member.
Quality Circles
Initially devised by Kaoru Ishikawa, in Japan, a quality circle is a small group of
personnel (say 8-10) and their line managers – usually from the same work area or
department. They work to pool and develop ideas to bring improvements to working
practices. The shared ownership of the improvement process that the quality circle
engenders, gives real benefits, such as: improved levels of performance, improvement
of quality, more effective company communication, significantly enhanced problem
solving capabilities, improved levels of job involvement and satisfaction, along with
improvements in economy efficiency and effectiveness.
Amending Priorities and Plans to Take Account of Changing
Circumstances
The 4 E’s model that we examined earlier reflects the constant need for managers to
take account of feedback and to amend priorities and plans to reflect the changing
needs of the organisation.
The process of ongoing monitoring and control of the action plan, with its demands for
changes to planning and prioritisation, is represented diagrammatically below:
44 Chapter 3 - Managing and improving performance
The Action Planning Cycle (AH Raymondson 2013)
Activity: Cite 2 examples where, over the last month at work, you have had to amend
priorities and explain the rationale for doing so and the impact the changes had.
Activity or Action
Amend plans as
necessary
Collect feedback
Reprioritise as
necessary
Monitor against the
plan
Review delivery of the
plan in line with other
priorities
The Action Planning Cycle (AH Raymondson 2013)
45 Chapter 3 - Managing and improving performance
Recommending Changes to Systems and Processes to Improve the
Quality of Work
Continuous improvement or ‘Kaizen’ is part of a Japanese philosophy to continually
improve processes and procedures to get ever-increasing efficiency and
effectiveness in the workplace. Some of the ways that improvements are captured
include:
Quality Circles;
Suggestions schemes;
Having ideas forums;
Through having a culture where ideas are welcomed and encouraged;
By presenting recommendations for change to your boss or a nominated
‘ideas champion’; and,
Through having a ‘lessons learned’ forum after major events/activity.
Activity: List 3 actions you could take at work to improve the generation, collection
and use of ideas for improvements.
46 Chapter 3 - Managing and improving performance
Working to Organisational and Team Priorities
As a team leader, you will be responsible for setting team priorities and for working in
accordance with the priorities defined by the organisation. Prioritising is a skill that
helps define what we should or need to be focusing on. Moreover, concentrating on the
priorities will help ensure that you are working as effectively as possible. Senior
managers who will expect your team’s activities to accord with their priorities set the
organisational level priorities. An example showing a company’s organisational
priorities is set out in the table below:
Priority
Level
Comments
1. Increase sales by 10%
1
Top priority to ensure survival in
competitive market place
2. To maintain our unblemished
reputation for high quality
1
A number 1 priority
3. Implement customer
relationship records system
1
A number 1 priority
4. HR outsourcing
2
On-going for the remainder of the
year
5. Team leader training
2
On-going
Table: Example Showing a Company’s Priorities
Day-to-day priorities are often set by team leaders and usually relate directly to
decisions around: what needs to be done (objectives or targets), by whom and with
what resources; when the work is to be completed by; in what order it is to be
completed and any cost or time implications.
As new deadlines, goals, and tasks come up, team leaders need to re-assess the
team’s priorities. Setting goals is not enough, as there will regularly be tasks that
require immediate attention. Results will be hard to achieve if the team lacks direction
on what they should focus on. In deciding what individual team members’ priorities
should be, strengths and interests should also be taken into account.
Whilst it is not always easy or possible to task employees with work that really interests
them, it is certainly likely that they will do their best work if they are working on tasks
that stimulate and interest them.
47 Chapter 3 - Managing and improving performance
Action Planning and Scheduling Work
Action Planning
Working each step in an action plan requires you to:
1.
2.
3.
4.
Confirm the date by which the task or project must be achieved;
Establish a realistic starting date;
Estimate the time needed for each step;
Identify what needs to happen before each activity can be undertaken and the
time required;
5. Establish what needs to take place after each activity is completed and how
much time that is likely to take; and,
6. Allocate responsibilities based on such things as:
The experience, skills, and competence required;
Who has time to do the task when it needs to be done; and,
The willingness of individual team members to do a job or to learn.
Prioritised ‘To Do Lists’
Many people find the process of creating and working from a ‘To Do List’ increases
their efficiency and consequently contributes to stress reduction. For a team leader, this
approach can easily be adapted to take account of your team’s priorities and the tasks
you have allocated to others. A simple but effective addition to a straightforward list is
to add some prioritisation to the list of tasks.
One way is to rate your task list against an ABC rating of your priorities. This involves
marking the tasks on a ‘To Do List’ with:
A
B
C
=
=
=
Critical for your goals – must be done that day;
Less critical but still important – start after the A's; and,
Nice to do – could do if you have time left after the A's and B's.
Another useful distinction to consider is between a task’s urgency and its importance.
Similarly, a valuable exercise is to create a ‘Not To Do List’!
48 Chapter 3 - Managing and improving performance
Activity: Create a prioritised to do list for the next 7 days using the template below:
Task
Priority
(ABC)
Due Date
In
Progress
Who
Done
Examples of different approaches to action planning include:
Objective
Activities
Person responsible
Timeframe/
Priority
Basic Schedule/Action Plan
49 Resource
Costs/inputs
Chapter 3 - Managing and improving performance
Action
S
M
Specific
Measurable
A
Achievable/
Agreed
R
T
Realistic
Timed
Staff
Responsible
Monitoring
Notes
Priority
1.
2.
3.
4.
5.
6.
SMART Action Plan
50 Chapter 3 - Managing and improving performance
Constraints on Amending Priorities and Plans
In managing the performance and output of your team, you will have to work within a
range of parameters or constraints. These constraints may affect your ability to amend
the priorities and plans of your Team. For example, what could be viewed as a priority
for your team may not accord with the overall priorities for the organisation.
Activity: List 5 specific examples of constraints that might impact upon your freedom to
amend priorities and plans.
Examples of constraints that could impact upon your freedom to amend priorities and
plan may include:
Organisational policies and procedures;
Cost implications – lack of finance;
Insufficient staff;
Not having staff with necessary skills and competence;
Internal politics;
Customer demands and/or market forces;
Legislation; and,
Lack of resources – time, materials, etc.
51 Chapter 3 - Managing and improving performance
Understanding the Principles of Effective Decision Making
Defining a ‘Decision’
In any study of management it is important to establish a definition for relevant
concepts. For a study of making decisions we need to know what we mean by a
‘decision’.
Activity: Create your own definition for a decision.
Decision: ‘A conclusion or resolution reached after consideration’ (Oxford Dictionary)
In getting to a satisfactory resolution of a problem or issue, we need to be clear in
defining our objectives, along with the scope and success criteria of the decision to be
taken.
By objectives, we are referring to what it is we are seeking to achieve by making a
particular decision. The scope is the parameters we are working within, i.e. the range
and limitations of what we can achieve with the resources available, within our span
and level of responsibility and within our delegated authority. The success criteria
refers to having a clear understanding of what would constitute a satisfactory resolution
to the problem or issue.
Activity: Why do you think is it important to have clarity around definition of objectives,
scope and success criteria in relation to decisions being taken?
52 Chapter 3 - Managing and improving performance
The reasons it is it important to have clarity around the definition of objectives, scope
and success criteria in relation to decisions being taken, include:
To be efficient and effective in decision making;
To ensure that decisions are ‘fit for purpose’;
To solve the ‘right’ problem at its root (rather than merely addressing the
symptoms);
So that people can have confidence in the decision maker’s leadership;
To be able to refer decisions that are beyond our scope to the appropriate
person; and,
To avoid having the problem growing and impacting on other areas of work.
Assessing the Impact of Decision Making
The following, ‘Pathways to Change Model’ outlines the decision making process. For
every problem there will be a series of options, all of which will have a set of
implications. Those implications are in essence the impact that following a particular
decision or course of action will have. In ascertaining what the implications are it is
really a case of thinking through the answers to the ‘so what?’ question for each option.
Problem
or
Issue
Options
Options
Options
Options
Options
Options
Options
Options
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Implications
Judgements
Recommendations
Decision(s)
Implementation
What? Why? When? Where? How?
Pathways to Change Model (AH Raymondson, 2009)
If we have a broad range of options and we understand the impact of each then we can
apply well considered judgement to either our recommendation (to, for example, a
more senior manager) or to our decision.
53 Chapter 3 - Managing and improving performance
Impact Analysis
In considering the implications or impact arising from each option, it is useful to
structure your thinking to ensure that you get as full a picture of the situation as
possible. A table such as the example below could be adapted to suit most
requirements.
Problem/Issue:
Option
Implications
Advantages
Disadvantages
Costs
Benefits
Timescale
Overall
Impact
1.
2.
3.
4.
54 Chapter 3 - Managing and improving performance
Activity: Consider a significant problem at work and work through several options for
resolution. Then outline the impact of each option
Problem/Issue:
Options for Resolution
Implications/Impact of Proposed Resolution
55 Chapter 3 - Managing and improving performance
Obtaining Sufficient Valid Information to Enable Effective Decision
Making
One of the problems facing a decision-maker is deciding how much information is
needed to inform a decision. The modern age and the Internet in particular have made
access to data and information relatively easy. However, we can have so much
information that it becomes overwhelming and very time consuming to absorb. The
bottom line is that the information we gather needs to be valid, in other words relevant
to the situation, and sufficient to make a decision that delivers a satisfactory resolution.
As managers, we develop a bank of experiences that can be re-applied to different but
similar situations. Eventually we have sufficient experience that much decision-making
becomes intuitive. We develop an instinct for the most appropriate decision. This is fine
for relatively routine decision-making. However, where situations requiting a decision
are more complex then we need to gather sufficient information to be able to make a
well-informed decision. We need a tool bag of techniques to enable us to unearth
information that will be relevant.
Root Cause Analysis – Rational Problem Solving
Root Cause Analysis (RCA) is an approach to gathering information that enables us to
understand fully why something has occurred or why there has been a problem. Things
do go wrong, and unwanted incidents and outcomes can occur. If we understand the
‘root causes’ of an incident or outcome, corrective measures can be put in place to
prevent recurrence of the problem. By directing corrective measures at the root cause
of a problem as opposed to the ‘symptom’ of the problem, the likelihood of the problem
recurring will be reduced. In this way we can get sustainable improvements in output or
performance.
There are many different methods and ways to undertake RCA. At its simplest, it is a
process for examining an outcome in a systematic way to find out why the situation
occurred, and to put in place measures to prevent it from happening again. By
considering a range of possible contributory factors in a systematic way with a logical,
analytical and enquiring approach, all the relevant root causes of an incident can be
identified.
General Principles of Root Cause Analysis
Root cause analysis provides a mechanism to ensure that you have sufficient
information to make effective decisions. General principles of RCA include:
RCA is based on the belief that problems are best solved by attempting to
correct or eliminate root causes;
To be effective, RCA must be performed systematically, with conclusions and
causes backed up by evidence;
There is usually more than one potential root cause for a problem; and,
RCA can transform an old culture that reacts to problems with a new culture that
looks to understand and learn from problems. This leads to a culture that is open
and seeks to identify and solve problems before they escalate.
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Root Cause Analysis – Processes
The process for getting to the root of issues is outlined in the following model:
What is happening?
Problem Definition
Data Collection
Evidence the problem exists and
for how long and with what
impact?
Identify Possible Causes
What led to the problem? What
other problems are related to the
main problem?
Identify Root Causes
Why do the root causes exist?
What, how, who, and by when?
Recommend & Implement
Solutions
The Root Cause - Problem Solving Process
Format: AH Raymondson (2009)
Root Cause Diagramming
Root cause or ‘fishbone’ diagrams are a useful tool for working through the causes of a
problem typified by an unexpected or unwanted effect or outcome: poor performance,
for example. The diagram below is an example of a fishbone diagram. The effect or
issue would be defined; the main causes would feature at the head of each ‘bone’ and
the sub-causes within each category would be placed on the ‘bones’.
57 Chapter 3 - Managing and improving performance
Category
Category
Category
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
Effect
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
cause
Category
cause
Category
Category
Example outline of a ‘Root Cause’ or ‘Fishbone’ diagram
58 Chapter 3 - Managing and improving performance
Activity: Consider a problem at work. Define the effect of the issue at the right hand
side of the box below. Then undertake an analysis of the root causes.
Use the following headings to classify the causes:
Methods
Materials
Environment
People
Equipment
Managerial issues
Identify the causes as branches of each of the headings. As you do so, think about why
these causes influence and exacerbate the problem. Are there any sub-causes of the
causes that turn into other branches?
59 Chapter 3 - Managing and improving performance
Information Gathering through Analysis of the Problem Situation
The following table outlines example questions that can be framed against the ‘5 Ws +
H’ in identifying, investigating and analysing the problem:
What?
What is the problem?
What are the facts?
What do I need to do, or have to do, to develop a solution?
What is the best case solution?
What is the worst case solution?
What would I really like to do?
What similarities are there with situations and problems I have seen
before?
What have I missed?
Why?
Why has this situation arisen?
Why did we get the impact we did from the situation?
Why should we implement solution a, b, c…?
How?
How can I get the information I need to understand the problem and
make a decision?
How does this problem impact on people?
How did the situation arise?
How will option a, b, c … resolve the situation?
How can I get to the root of the issue?
How can I engage people to contribute to the resolution of the situation?
Where?
Where did the problem occur?
Where could I find answers?
Where might we need to promote the issue and the solution?
When?
When did the problem occur?
When do we need a solution by?
When do we need to start/finish?
When, if at all, has this happened before?
Who?
Who is responsible for the various stages of finding and impementing a
solution?
Who does the situation impact upon?
Who has the skills and experience necessary that could be utilised in
finding and implementing a solution?
Who needs to be informed and kept in the picture?
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Aligning Decisions with Business Objectives, Values and Targets
All decisions made should accord with the business or organisational objectives, no
matter at what level the decisions are being made. Put simply, this means that
decisions should be in the organisation’s interest and serve to help in achieving
organisational targets. Values are literally about what we value. Organisationally there
will be a valued way of operating that defines the organisational identity and decisionmaking should accord with those values. Organisation values are often contained in
organisational mission statements. Each decision made should reflect the mission.
Values are essentially standards and conditions that relate to what is considered
important and necessary for the organisation. It is important to set goals and targets
that are congruent with the organisational values – i.e. consistent with what is
important. Goals and targets that are not consistent with personal values ultimately
cause conflict amongst stakeholders.
Activity: Obtain a copy of your company or organisation mission statement and record
below the elements that relate to values. Also, capture any additional values that you
know that are applied within the organisation.
Validating Information
It is important to check the relevance and accuracy of information in an objective way.
Examining information without distortions from personal bias or false interpretation is
likely to lead to better decisions. One of the most significant distinctions is between
facts and opinions.
61 Chapter 3 - Managing and improving performance
Distinguishing Facts from Opinion
It is important to be clear what information is factual and what stems from either your or
others’ opinions. A fact tells us something that can be proved. If it can be proved you
should be able to explain how. If you are presenting supportable facts then they should
be indisputable.
An opinion on the other hand relates to what you think, feel, or believe and cannot be
proved. There is nothing wrong with opinion and it is opinion or judgements about
situations that drive most organisational decision-making. If you are presenting opinion
then you will need to explain why your opinion should be adopted if you are to be
convincing in your case.
Some pointers in distinguishing between facts and opinions are:
Opinion words include: always, never, all, none, least, greatest, best, and worst;
Facts often contain dates, numbers, or ages. They are about a specific person,
place, or thing. You can find information to prove what is stated;
Some opinions can be stated as though they are facts, but if you cannot find
information to verify its validity, it is probably an opinion; and,
To determine a fact, ask yourself, ‘Can I prove this statement?’
Addressing Issues that Hamper the Achievement of Targets and
Quality Standards
Activity: How do you think managers should deal with:
a. Issues hampering the achievement of targets?
b. Issues hampering the achievement of quality standards?
62 Chapter 3 - Managing and improving performance
Many people confuse the meaning of ‘quality’, thinking, mistakenly, that it means ‘high
quality’: it does not. ‘Quality’ simply means ‘fit for purpose’. Consequently, when a
decision compromises quality we are effectively saying that the outcome will not be fit
for purpose. Fairly obviously, this would be unacceptable and all decisions need to
ensure that agreed measures of quality are achieved. Clearly, a decision to offer
something that is not fit for purpose would not be acceptable to customers.
Targets on the other hand are exactly what they are … targets. For all sorts of reasons
managers may need to revise targets to suit changing demands. Priorities change and
unforeseen events occur. What is important though is that if a decision is made to
change a target then it is for good reason and made in full consideration of the impact
to the organisation. Anyone impacted should be informed accordingly.
Dealing with Data and Information
Activity: What do you consider the difference between data and information?
Data is raw, unorganised and unprocessed facts; data is useless until it is organised.
When data is processed, organised, structured or presented and placed in context to
make it useful, it becomes information. In other words, information is data with
meaning. Information rather than data informs decision-making.
Averages
In presenting a case for a decision, it will often be necessary to present information in
the form of averages. For example, ‘on average we lose 27 days per year due to
machinery malfunction’. Averages enable us to simplify information to make it more
digestible. However, there are different kinds of average that may give different results.
These are:
The mean average;
The modal average; and,
The median average.
63 Chapter 3 - Managing and improving performance
The mean: is most common and found by adding up all the numbers and then
dividing that figure by how many sets of numbers there are. e.g. 7+11+18 = 36;
36/3 = 12
The mean takes into account all the data;
The mean is useful to find a value for data that is relatively closely grouped;
and,
The mean can be influenced by very large or small values in the sample.
The mode: is found by looking for the value that occurs most often. For example,
for the following data – 3, 1, 3, 5, 2, 5, 9, 1, 7, 1, 9, 3, 3, 5, 9, 2 – the modal average
is 3.
The mode is useful for finding the most popular or most common, e.g. the
favourite publishing programme;
Often, the mode will be different from the mean; and,
The mode does not take all the data collected into account.
The median: is found by establishing the value in the middle of a range of data.
First, the data needs arranging in ascending or descending order. Thus, for the
following data – 1, 3, 7, 13, 17, 19, 21, 36, 47 – the median is 17. If there is an even
number of values, the median will be the mean of the two middle values. For
example, in the data stream – 1, 3, 7, 13, 17, 19, 21, 36, 47, 50 – the median is
(17+19)/2 = 18.
The median is useful for establishing the middle of the range;
It is less likely to be influenced by very large or small values; and
It does not take into account all the data.
Organising and Summarising Data
Often, with numeric data, there are too many different values to make sense of the
data. It is common to display values in tabular format – using frequencies. Each
frequency is the number of occurrences in one of the classes.
Definitions:
The frequency for a category is the number of data values in that category.
The relative frequency for a category is the fraction, proportion, or percentage of data
values within that category.
The following table shows data relating to staff achieving bonus levels 1-4.
Bonus Level
1
2
3
4
Frequency
18
12
6
4
64 Relative Frequency
18/40 = 0.45 = 45%
12/40 = 0.30 = 30%
6/40 = 0.15 = 15%
4/40 = 0.10 = 10%
Chapter 3 - Managing and improving performance
Charts and Diagrams
Presenting Data and Statistics – Using Graphs and Charts
The presentation of data and statistics can be challenging and requires thought. Some
readers will like to see information tabulated – put into tables – while others will prefer
graphical presentation. The key to presenting data is to determine what will make the
information you want to get across easily accessible. In some cases, it will be
necessary to put much of the data in to appendices, presenting only your formal
analysis, and key supporting data, in the Main Body of a report. On other reports, the
data itself will be fundamental to understanding the argument and necessarily should
be included in the Main Body of the Report.
The presentation of data in different types of charts is now much easier than it once
was. Most spreadsheet packages allow us to capture data and present that data in a
format that meets our needs. The most common types of chart used include: the Pie
Chart, the Bar Chart, the Line Chart, the Area Graph and the X-Y Plot.
The Pie Chart. Pie charts enable us to compare data as part of the whole. For
example, the Pie Chart below shows the components of effective
communication. Pie charts are best to use when you are trying to compare parts
of a whole. They do not show changes over time.
Elements of Communication
38% Tone of Voice
7% Words
38% 55% 7% Albert Mehrabian
Example Pie Chart
The Bar Chart. Bar charts enable us to compare different groups or to track
changes over time. The table below shows the number of customer satisfaction
surveys sent out and responses received over time (3 years). The bar chart on
the next page shows how this data might be presented.
Year
Surveys Sent
Responses Received
2010
2011
2012
1200
1600
1800
476
588
713
65 Chapter 3 - Managing and improving performance
Surveys sent and Responses
Received
Effectiveness of Customer Surveys 2010-2012
1800
1600
Surveys Sent
Responses Received
Year
Example Bar Chart
The Line Graph. Line graphs are used to track changes over short
and long periods of time. Line graphs can also be used to compare
changes over the same period of time for more than one group and
are particularly effective when used to track smaller changes. For
example, the graph below shows the customer satisfaction survey
data above broken down into quarterly returns.
Surveys Sent abd Responses
Received
Customer Satisfacton Survey 2010-2012 - Quarterly
View
500
400
300
200
Surveys Sent
100
Responses Received
0
Year Quarter
Example Line Graph
The Area Graph. Area graphs are very similar to line graphs and are
often used to track changes over time for one or more groups. Area
graphs are particularly effective for tracking changes in 2 or more
related groups. For example, the area graph below shows the same
data used in the above line graph:
66 Chapter 3 - Managing and improving performance
500
400
300
200
Surveys Sent
Responses Received
2012 Q4
2012 Q3
2012 Q2
2012 Q1
2011 Q4
2011 Q3
2011 Q2
2011 Q1
2010 Q4
2010 Q3
2010 Q2
0
2010 Q1
Surveys Sent and Responses
Received
Customer Satisfaction Survey 2010-2012 - Quarterly
View
Year and Quarter
Example Area Graph
The X-Y Plot. X-Y plots are used to determine relationships between the two
different variables. The x-axis is used to measure one event (or variable) and the yaxis is used to measure the other. If both variables increase at the same time, they
have a positive relationship or correlation. If one variable decreases while the other
increases, they have a negative relationship. Sometimes the variables have no
relationship and, consequently, do not follow a pattern. Consider the data previously
used, amended to show that the number of surveys sent out has increased quarter
by quarter. What do you notice?
Number of Responses
Responses Received
75
Number of Surveys Sent
By drawing a straight line from the bottom left (where the X and Y axes intersect),
each point plotted is distributed, broadly speaking, pretty close to that line. This
indicates a correlation (or pattern) exists between the number of surveys sent out
and the number of responses received. The correlation is considered to be a positive
correlation because the line moves from bottom left to top right. The raw data
supports that this is a positive correlation because the number of responses received
increases as more surveys are sent out. A negative correlation exists where the line
comes from top left to bottom right on the graph.
67 Chapter 3 - Managing and improving performance
Evaluating Solutions
Once all the information has been absorbed and the options, along with their
implications have been fully considered, each potential solution needs to be evaluated
to determine which is the most viable. There are a number of ways of doing this. At this
stage you may only have developed ‘rough-order’ costs for each option and will most
likely develop a more robust financial analysis once a preferred option has presented
itself.
A simple method of evaluating the various options is through the use of decisionmaking grids. There are 2 main types of decision-making grid: the Straight Comparison
Decision-Making Grid and the Weighted Decision-Making Grid.
Straight Comparison Decision Making Grids
The example below is of a straight comparison decision-making grid in which 5 options
are to be compared. Each option is compared against the other options. For example,
a straight comparison between Option 1 and Option 5 (Box 1) reveals that Option 5 is
the preferred solution. In the next comparison (Box 2), you decide that, when compared
with Option 4, Option 1 is the preferred solution.
Option 5
Option 4
Box 1
Option 1
Option 2
Option 3
Option 4
Option 3
Option 2
Box 2
Box 3
Box 5
Box 6
Box 7
Box 8
Box 9
Option 5
Box 4
Option 1
Box 10
After comparing all the options against each other (Boxes 3 to 10) the option that
features most on the grid – Option 2 – is selected as the preferred option.
Option 1
Option 2
Option 3
Option 4
Option 5
Option 5
Option 2
Option 3
Option 5
Option 4
Option 1
Option 4
Option 4
Option 3
Option 1
Option 2
Option 2
Option 2
Should the situation arise where two options come out with equal preference (see next
example), the original straight comparison, which shows that Option 4 was preferred
over Option 2 is decisive.
Option 1
Option 2
Option 3
Option 4
Option 5
Option 5
Option 2
Option 3
Option 4
Option 4
Option 1
Option 4
Option 4
68 Option 3
Option 1
Option 2
Option 2
Option 2
Chapter 3 - Managing and improving performance
Weighted Decision-Making Grids
The example below is of a weighted decision-making grid and relates to moving house.
This technique requires you to select the essential criteria – those that must be
achieved by the chosen solution – and weight these in order of importance. In the
example, of most importance to the person is the house itself (weighted at 4) and the
issue of least importance is public transport (weighted at 1). The person compiling the
grid would allocate a score on a scale of say 1-10 and then multiply the allocated score
by the weighting. So, if the location of the property in Town A was considered to be a
nice area in which to live, it might be allocated a high score of 9. This score of 9 would
then be multiplied by 3, giving a total of 27 points for Town A in the Area Column. Each
factor is scored accordingly, giving a total score of 69 for Town A.
Factor
Area
Public
Transport
House
Weight
3
1
4
2
9
(27)
8
(8)
5
(20)
7
(14)
Move to Town A
Schools
Total
69
Move to Town B
Move to Town C
Move to Town D
Don’t Move
This scoring process is repeated for each of the options enabling an objective
judgement to be made about whether to move or not (the ‘Do Nothing’ Option), and, if a
move is viable, where to. The Grid below shows the completed Weighted DecisionMaking Grid.
Factor
Area
Public
Transport
House
Weight
3
1
4
2
Move to Town A 9
(27)
8
(8)
5
(20)
7
(14)
Move to Town B
7
(21)
5
(5)
7
(28)
8
(16)
Move to Town C
6
(18)
7
(7)
6
(24)
6
(12)
Move to Town D
8
(24)
9
(9)
8
(32)
4
(8)
Don’t Move
9
(27)
2
(2)
7
(28)
8
(16)
69 Schools
Total
69
70
61
73
73
Chapter 3 - Managing and improving performance
In the example, 2 options – ‘Move to Town D’ and ‘Don’t Move’ – have come out with
the same score. Critically, however, we can use the most important criterion – the
House – to separate the two options. Consequently, the decision in this example
probably would be to move to Town D.
Methods of Making Decisions
Activity: Create a list of at least 10 different ways of making decisions.
70 Chapter 3 - Managing and improving performance
Your list of decision-making methods may have included some or all of the following:
Most popular with the users;
Survey results;
Least maintenance;
Intuitive decision;
Toss a coin or draw straws;
Most compatible – e.g. software;
Autocratic/arbitrary decision;
Attribute based winner;
Rule-based decision;
Legal decision based on law;
71 Decision based on computer simulation;
Constraint based – e.g. space, location;
Weighted attribute based winner;
Quickest pay back on the investment;
No choice decision;
Cheapest initial investment;
Cheapest overall investment;
Earliest benefits;
On-site testing of options;
Least difficult to implement;
Chapter 3 - Managing and improving performance
Budgets and Associated Operational Constraints
A budget is a detailed financial plan that specifies monies expected to be available for a
fixed period or for a particular project.
An essential element of the planning and control process, budgets provide benchmarks
that can be compared to actual performance. Mangers make decisions based on
budget reports that will either curtail activity or enable activity to be increased. Upon
allocation a budget defines the level of approval for planned spending, within a defined
delegated level of authority (for example, for items up to £300).
The master budget from which funding streams are delegated comprises specified
targets. For revenue generating organisations, budgets can be the basis for sales
targets. The logic here is that if likely sales can be estimated then we will know what
income is likely to be available for other expenditure. Other stipulations will be
production activities and financing arrangements. These budget links to forecast
financial statements such as the forecast balance sheet, forecast profit and loss
account.
Activity:
a. What benefits come from budgeting
b. What problems or constraints could arise from operation of budgets?
72 Chapter 3 - Managing and improving performance
One of the biggest reasons for business failure is a combination of poor budgeting and
poor management of budgets. Budgets are directly connected to organisational goals
and objectives. If this connection to clearly defined goals is weak, then problems will
ensue. If the budget is well managed and fully aligned with organisational goals, then
the budgeting process will lead to success in achievement of the identified goals and
objectives. Essentially the budget is a detailed roadmap for co-ordination and
management of the various team activities within an organisation.
Within most organisations, funding is limited. Consequently managers need to ‘bid’ or
argue their case for funding. This can create friction and pressure, as a business case
for the resources sought will usually need to be very compelling. An obvious problem
arises where a manager has ‘over-egged’ a case for funding as allocation of funds is
likely to be at the expense of other initiatives that are perhaps even more important.
Parochial self-interest may hold back achievement of the organisational goals as it
introduces distortions into the budgeting system. This is why managers should
recognise that their individual needs are secondary to the overall organisational goals.
Once the budget has been allocated, managers should be required to drive the overall
plan and maximize performance and results for the overall organisation.
Where budgets are so restricted that resources do not match demands they may result
in significantly reduced employee performance, commitment and morale. Another
frustration arises from ‘the hockey stick effect’: this is where there is a sudden splurge
of spending at the end of a budgeting period to absorb under-spend. Often spending in
this way will be on things that are not really needed and account for a lot of waste.
Budgets can be used to identify constraints and blockages. For example, a budget that
required a particular level of sales would be useless if these sales could not be
serviced due to insufficient supply of component parts. The art of maximising the
potential from each budget stream requires that all organisational processes be
managed to optimise economy, efficiency and effectiveness.
73 Chapter 3 - Managing and improving performance
Bibliography/Further Reading
Author
Title
Publisher
Barner and Barner
Building Better Teams: 70 Tools and Techniques for Strengthening
Performance Within and Across Teams
Leadership and the One Minute Manager
The 7 Habits of Highly Effective People
Leadership Pocketbook
The Self-Aware Leader
The New Leaders
Pfeiffer
Ken Blanchard
Stephen Covey
Fiona Elsa Dent
Gallagher & Costal
Daniel Goleman
Charles Handy
Chip and Dan Heath
Hersey
and
Blanchard
Susan Jeffers
Dr Spencer Johnson
John P Kotter
Tannenbaum and
Schmitt
Richard Templar
Understanding Organisations
How to Change Things When Change is Hard
Management of Organizational Behaviour 3rd Edition – Utilizing
Human Resources
Feel The Fear and Do it Anyway
Who Moved My Cheese?
Leading Change
How to choose a leadership pattern
The Rules of Management
74 Harper Collins
Simon and Schuster UK
Management Pocketbooks Ltd
ASTD Press
Sphere 2007 (previously Harvard
Business School Press)
Penguin Press
Random House Business Books
New Jersey/Prentice Hall
Arrow
Vermillion
Harvard Business School Press
Harvard Business Review, 36,
March-April, 95-101
Pearson/Prentice Hall
Notes
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