Sunday, October 11, 2009

MEASURING PERFORMANCE AND QUALITY


In the past two decades, little did institutions or organizations care about measuring performance and equality until the skyrocketing of technological innovations that saw human beings come up with diverse, state-of-the-art, and reliable measures to counter the threat of work related underperformances and general disproportions. Since every institution, corporation or organization was scrambling for a solution to overcoming huddles in the workplace, researchers in the fields of work management were busy devising plans to stabilize inconsistencies and other hard to crack issues that caused handicaps in the workplace. Looking at a patient’s visit to a medical institution, we find that doctors take some of the most essential measures to bring to light the patient’s overall medical condition like blood pressure monitoring, blood sugar levels, urinalysis, and gynecological procedures to assess pregnancy and also reveal other biological defects in the making before jumping on any sort of prognosis. Likewise, it is equally important for organizations to apply measures that will enforce a healthy environment and a productive workforce not only for the present but for posterity.

Dozens of books have been written on issues pertaining to measuring performance and quality. One such book is John Elkington’s Cannibal with Forks: the Triple Bottom Line of the 21st Century (Norman and McDonald, 2004). Those who support triple bottom line would like financial performance, social/ethical performance, and environmental performance to be on the same road in order to achieve organizational success. Another important book that has captured the hearts and minds of business magnates is the bestseller In Search of Excellence by Peters and Waterman (1982). The authors base their research on top major U.S. corporations of the 1980s that outperformed other business corporations while ripping long-term profitability and continuing innovation. They found eight common themes that attributed to the growth and success of the chosen corporations as outlined below:
1. A bias for action, active decision making - 'getting on with it'.
2. Close to the customer - learning from the people served by the business.
3. Autonomy and entrepreneurship - fostering innovation and nurturing 'champions'.
4. Productivity through people- treating rank and file employees as a source of quality.
5. Hands-on, value-driven - management philosophy that guides everyday practice - management showing its commitment.
6. Stick to the knitting - stay with the business that you know.
7. Simple form, lean staff - some of the best companies have minimal HQ staff.
8. Simultaneous loose-tight properties - autonomy in shop-floor activities plus centralized values. [1]

“The last two decades have been marked by the rise of performance-related considerations and a focus on increased efficiency in western societies. Initially these changes seemed not to affect public sector employment. The traditional conception of public sector employment where organizational performance was equated with efficacy (organizational goals were achieved steadily) rather than efficiency (organizational goals were cost effective) theoretically enabled the application of democratic values of meritocracy and social equality.” [2]

The authors whose works I read discussed and devised several factors for measuring performance and quality by having a breakdown of the deciding factors that include:
1. What is right versus what is easy; this pertains to measuring what is easy to measure rather than what is important to measure.
2. Developing a hierarchy of measures; here the authors take a leaf from Walsh’s (2005) comprehensive set indicators that measure progress and achievement by outlining a measurement hierarchy.
3. Tailoring measures to the organization and its mission; they use the balanced scoreboard approach (Kaplan and Norton, 1992) to base their arguments.
“The Balanced Scorecard provides a framework for developing a strategy map for an organization. First, the strategic objectives are organized into four categories:
1. Financial – strategy for growth, profitability, and risk from the shareholder’s point of view.
2. Customer – strategy for creating value and differentiation from the customer’s point of view.
3. Internal business process - strategic priorities for various business processes that create customer and shareholder satisfaction.
4. Learning and growth - priorities that create a climate that supports organizational change, innovation, and growth. The foundation for the strategy.”

[1] http://en.wikipedia.org/wiki/In_Search_of_Excellence

[2] Journal article by Rita Mano-Negrin; International Journal of Public Administration, Vol. 26, 2003

[3] Kaplan, R. S. and D. P. Norton. 2001. Transforming the balanced scorecard from performance measurement to strategic management: Part I. Accounting Horizons (March): 87-104.

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