Whistleblower

A whistleblower (whistle-blower or whistle blower) is a person who tells the public or someone in authority about alleged dishonest or illegal activities (misconduct) occurring in a government department, a public or private organization, or a company. The alleged misconduct may be classified in many ways; for example, a violation of a law, rule, regulation and/or a direct threat to public interest, such as fraud, health/safety violations, and corruption. Whistleblowers may make their allegations internally (for example, to other people within the accused organization) or externally (to regulators, law enforcement agencies, to the media or to groups concerned with the issues).

The term whistleblower comes from the phrase "blow the whistle," which refers to a whistle being blown by a police officer or a referee to indicate an activity that is illegal or a foul.

Most whistleblowers are internal whistleblowers, who report misconduct on a fellow employee or superior within their company. One of the most interesting questions with respect to internal whistleblowers is why and under what circumstances people will either act on the spot to stop illegal and otherwise unacceptable behavior or report it. There is some reason to believe that people are more likely to take action with respect to unacceptable behavior, within an organization, if there are complaint systems that offer not just options dictated by the planning and control organization, but a choice of options for individuals, including an option that offers near absolute confidentiality.

External whistleblowers, however, report misconduct on outside persons or entities. In these cases, depending on the information's severity and nature, whistleblowers may report the misconduct to lawyers, the media, law enforcement or watchdog agencies, or other local, state, or federal agencies. In some cases, external whistleblowing is encouraged by offering monetary reward.

Legal protection for whistleblowing varies from country to country and may depend on any of the country of the original activity, where and how secrets were revealed, and how they eventually became published or publicized. For purposes of the English Wikipedia, this section emphasizes the English-speaking world and covers other regimes only insofar as they represent exceptionally greater or lesser protections.

5 Simple Ways to Overcome Procrastination

"How soon 'not now' becomes 'never'."

Martin Luther

 

"A year from now you may wish you had started today."

Karen Lamb

 

Procrastination is probably one of the most common problems people have in their day to day life. So find a procrastination solution that works for you.

 

Here are five of them. Try them out and see which one or ones that fit you the best.

 

1. Do the hardest thing first.

 

What this means is simply to do the hardest and most important task of the day first thing in the morning. A good start in the morning lifts your spirits and creates a positive momentum for the rest of the day. That often creates a pretty productive day.

 

2. How do you eat an elephant?

 

Don't try to take it all in one big bite. It becomes overwhelming which leads to procrastination. Split a task into small actionable steps. Then just focus on the first step and nothing else. Just do that one until it's done. Then move on to the next step.

 

3. Recognize that there is more pain in procrastinating than not.

 

If you have procrastinated a lot you might have discovered that you procrastinate to avoid doing something that is boring, hard etc. You want to avoid that pain. But after having some experience with procrastination you'll probably realise that procrastination itself causes your more pain than actually just doing what you were supposed to. Realising the true amount of pain in the two choices will make it easier to get things done.

 

4. Make a small deal with yourself.

 

Promise yourself that you'll work on something for just 5 minutes. After those 5 minutes you can do something else if you want to. But make a note in your schedule for when you will come back to the task and work another 5 minutes on it. No matter how unpleasant a task may be, you can often talk yourself into working 5 minutes on it.

 

I've found this one to be effective to make a dent in those tasks you have put off for a longer while. Because many times you will just continue working after those 5 minutes have passed. It is the first few minutes of getting started that is the hardest part.

 

5. Use my three step method for doing something even when you don't feel like it.

 

Mundane or routine tasks can be a bit boring. Maybe you have a lot or emails to reply to or phone calls to make. Batch them - do them all in row - to get them done quicker.

 

If you feel inner resistance and just can't get started try this three step method to be able to reduce that resistance, up your motivation and get going.

 

Step 1: Accept it.

 

When you feel resistance within towards doing something the natural instinct may be to try to push that feeling away. To brush it off. I have found that doing the opposite and just accepting that it is there can do wonders.

 

Tell yourself: "This is how I feel right now and I accept it".

 

This sounds counterintuitive and perhaps like you're giving up. However by accepting how you feel instead of resisting it you reduce the emotional energy that you are feeding into this problem. It then tends to just kinda lose speed like a car that runs out of fuel. And oftentimes it becomes so weak after while that it moves out of your inner focus and disappears.

 

This step may be all you need to reduce the negative feelings enough to be able to start taking action. If not, move on to the next step.

 

Step 2: List the positives.

 

After you have accepted how you feel list the positives of getting this thing done. Do it on paper, on your computer or just in your head.

 

When you don't feel like doing something it's very easy to get stuck and just focus on the negative aspects such as it being hard work or the risk of pain or failure.

So you need to change what you are focusing on to motivate yourself to take action. Making a list of positives like benefits and possible opportunities can be very effective for turning your focus around.

 

If you have problems getting started ask yourself questions that will empower you. Questions like:

 

- What is awesome about this situation?

- What is the hidden opportunity in this situation?

 

You can pretty much always find positives about anything. There are lessons to be learned about yourself and your world and opportunities to be found if you look at things the right way.

 

Step 3: Just do it.

 

You should now have reduced much of the resistance within and feel more motivated to start taking action and getting your thing done

 

It is at this point tempting to start thinking again. To reconsider and ponder. But I have found that if you do that then it easy to fall back into the same place where you began. You start to question doing this. Your focus starts to turn back to the negative aspects again.

 

So when I am at this point I usually just stop thinking and get my butt out of the chair. I get moving and I just do it.

 

retrieved from   

The Positivity Blog henrik@positivityblog.com via smtp-verifiedoptin-02.aweber.com

HUMAN RESOURCE MANAGEMENT (HRM)

HUMAN RESOURCE MANAGEMENT (HRM)
http://go.techtarget.com/r/14784459/5070930
 

Human resource management (HRM) is the governance of an organization's employees. HRM is sometimes referred to simply as human resources (HR).

A company's human resources department is responsible for creating, implementing and/or overseeing policies governing employee behaviour and the behaviour of the company toward its employees.

Human resources are the people who work for the organization; human resource management is really employee management with an emphasis on those employees as assets of the business. In this context, employees are sometimes referred to as human capital. As with other business assets, the goal is to make effective use of employees, reducing risk and maximizing return on investment (ROI).

Areas of HRM oversight include - among many others -- employee recruitment and retention, exit interviews, motivation, assignment selection, labor law compliance, performance reviews, training, professional development, mediation, and change management.

How To Write a Mission Statement

Writing a Mission Statement is a complex activity involving every level of the organization. Here's how to get started.

Here's How:

1. List the organization's core competencies; its unique strengths and weaknesses.
2. List the organization's primary customers, internal or external, by type, not by name.
3. Review how each customer relates to each of the organization's strengths. Ask them if possible.
4. Write a one-sentence description of each customer/strength pairing.
5. Combine any that are essentially the same.
6. List the sentences in order of importance to the organization's vision, if one exists.
7. Combine the top three to five sentences into a paragraph.
8. Ask your customers if they would want to do business with an organization with that mission.
9. Ask your employees if they understand and support it and can act on it.
10. Ask your suppliers if it makes sense to them.
11. Incorporate the feedback from customers, employees and suppliers and repeat the process.
12. When you have refined the paragraph into statements that clearly articulates the way the company wants to relate to those it effects, publish it to everyone. Post it on the wall, email it to everyone, etc.

Tips:

1. A good mission statement provides strategic vision and direction for the organization and should not have to be revised every few years. Goals and objectives are the short-term measures used to get there.
2. Revise the organization's mission statement when it is no longer appropriate or relevant.

What is 'a balanced scorecard'?

The balanced scorecard is a strategic planning and management system that is widely applicable to organisations regardless of size or type of business. The system, extensively used in business and industry, government, and non-profit organizations worldwide, facilitates the development and ongoing review of an organisation’s vision and strategy, provides a method of aligning the organisation’s business activities with that strategy, improves the organisation’s internal and external communications, and allows the organisation to monitor its performance against its strategic goals.

It is a ‘balanced scorecard’ because a central component of the methodology is a management ‘scorecard’ that focuses on all of the important aspects of an organisation’s performance as well as its short term financial performance.

The different meanings of 'the balanced scorecard'

Because ‘balanced scorecard’ is a generic term which refers to a management methodology that has been rapidly evolving for some 2 decades, it has come to mean different things to different people. In practice, there are wide variations in understanding and implementation. In its most limited form, ‘the balanced scorecard’ is frequently seen to be a simple management dashboard of performance measures. At the other extreme, in its most developed form ‘the balanced scorecard’ is a comprehensive planning and management system designed to focus an organisation on achieving its objectives as effectively as possible. The various meanings are frequently presented as being ‘first generation scorecards’, second generation scorecards’, third generation scorecards’, etc, although there seems to be little agreement about exactly what is included within each ‘generation’.

The BSC Methodology

The balanced scorecard has evolved from its early use as a simple performance measurement framework to a full strategic planning and management system. The “new” balanced scorecard transforms an organization’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.

This new approach to strategic management was first detailed in a series of articles and books by Drs. Kaplan and Norton. Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what companies should measure in order to 'balance' the financial perspective. The balanced scorecard is a management system (not only a measurement system) that enables organisations to clarify their vision and strategy and translate them into action. It provides feedback around both the internal business processes and external outcomes in order to continuously improve strategic performance and results. When fully deployed, the balanced scorecard transforms strategic planning from an academic exercise into the nerve center of an enterprise.

In their initial 1992 article, Kaplan and Norton described the balanced scorecard as follows:

"The balanced scorecard retains traditional financial measures. But financial measures tell the story of past events, an adequate story for industrial age companies for which investments in long-term capabilities and customer relationships were not critical for success. These financial measures are inadequate, however, for guiding and evaluating the journey that information age companies must make to create future value through investment in customers, suppliers, employees, processes, technology, and innovation."

(Kaplan R.S. and Norton D.P. (1992) The Balanced Scorecard - Measures that drive performance, Harvard Business Review, Jan-Feb.)

Perspectives
The balanced scorecard suggests that we should view organisations from four perspectives, and develop metrics, collect data and analyze it relative to each of these perspectives:

The Learning & Growth Perspective

This perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people -- the only repository of knowledge -- are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. Metrics can be put into place to guide managers in focusing training funds where they can help the most. In any case, learning and growth constitute the essential foundation for success of any knowledge-worker organization.

Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools; what the Baldrige criteria call "high performance work systems."

The Business Process Perspective

This perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately; with our unique missions these are not something that can be developed by outside consultants.

The Customer Perspective

Recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good. 

In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.

The Financial Perspective

Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.

Strategy Mapping

Strategy maps are communication tools used to tell a story of how value is created for the organization. They show a logical, step-by-step connection between strategic objectives (shown as ovals on the map) in the form of a cause-and-effect chain. Generally speaking, improving performance in the objectives found in the Learning & Growth perspective (the bottom row) enables the organization to improve its Internal Process perspective Objectives (the next row up), which in turn enables the organization to create desirable results in the Customer and Financial perspectives (the top two rows).

Balanced Scorecard Software

The balanced scorecard is not a piece of software. Unfortunately, many people believe that implementing software amounts to implementing a balanced scorecard. Once a scorecard has been developed and implemented, however, performance management software can be used to get the right performance information to the right people at the right time. Automation adds structure and discipline to implementing the Balanced Scorecard system, helps transform disparate corporate data into information and knowledge, and helps communicate performance information

What is 'the Balanced Scorecard (BSC)'? - FAQ

The balanced scorecard (BSC) is a strategic planning and management system that is widely applicable to organisations regardless of size or type of business. The system, extensively used in business and industry, government, and non-profit organizations worldwide, facilitates the development and ongoing review of an organisation’s vision and strategy, provides a method of aligning the organisation’s business activities with that strategy, improves the organisation’s internal and external communications, and allows the organisation to monitor its performance against its strategic goals.

Because ‘balanced scorecard’ is a generic term, it has come to mean different things to different people. In practice, there are wide variations in understanding and implementation. In its most limited form, ‘the balanced scorecard’ is frequently seen to be a simple management dashboard of performance measures. At the other extreme, in its most developed form ‘the balanced scorecard’ is a comprehensive planning and management system designed to focus an organization on achieving its objectives as effectively as possible.

It was originated in the early 1990’s by Robert Kaplan and David Norton of Harvard University, but the roots of the balanced scorecard methodology lie deep within well established management literature, including the work of the French process engineers who created the Tableau de Bord – literally, an instrument panel or dashboard of performance measures - in the early part of the 20th century in France, and the pioneering work of General Electric on performance measurement reporting in the 1950’s.

The balanced scorecard methodology has evolved a long way from its early use as a simple performance measurement framework for an organisation’s non-financial areas of activity. The “new” balanced scorecard is a full strategic planning and management system that transforms an organisation’s strategic plan from an attractive but passive document into the "marching orders" for the organization on a daily basis. It provides a framework that not only provides performance measurements, but helps planners identify what should be done and measured. It enables executives to truly execute their strategies.

What are the benefits of the balanced scorecard approach?

The benefits of the balanced scorecard have been identified by many organizations:

• Improved organisation alignment
• Improved communications, both internally and externally
• Linked strategy and operations
• More emphasis on strategy and organizational results
• Integrated strategic planning and management

What challenges will I encounter trying to develop and deploy a balanced scorecard system?

There are several major challenges to developing and sustaining the balanced scorecard:

• Engaging the organisation’s leadership
• Maintaining momentum
• Measuring what matters
• Not using a disciplined framework to build the system
• Mistakenly thinking a scorecard system is a short-term project (it’s not….it’s a journey)
• Not involving a cross-section of the organization in developing the system
• Not thinking strategically enough
• Not providing the right incentives for motivating behaviour changes

Isn't the balanced scorecard just the latest management fad that will soon pass away?

The buzz words ‘balanced scorecard’ may change (many would like this to happen!), but not the underlying concepts which have been around as long as there have been organisations that need to be led and managed. The concepts - thinking strategically, measuring performance, evaluating results, feedback -- are the fundamental concepts of managing organisations. The balanced scorecard methodology links and gives effect to these concepts in a more effective way than any previous management system. Executives and managers who learn and use the balanced scorecard methodology will be in a better position to lead in the future. They will have the right skills to think, plan and assess the success of their organizations -- skills which will always be in demand.

I am a program manager. What's in it for me?

The balanced scorecard is intended as a strategic system for planning and managing a whole portfolio of programs within an organization. However, as a manager of one or more such programs, the balanced scorecard can help you. It raises the visibility of program performance -- not only in traditional on-time, on-budget terms, but also in terms of its strategic significance to the desired outcomes of the whole organization. So, if you know that you are working on a program that is vital and strategic, the balanced scorecard and its measurements can help you to defend your program. Also, since strategy is everyone's job, you can use the balanced scorecard's strategic map to guide the direction of your program to maximize outcome performance. As the de facto expert in your program's definition of performance, you have the right to define what metrics will be used to measure your program's performance -- in many cases, these metrics cannot be dictated from above. You also have the authority and responsibility to measure your own program's performance.

Is the balanced scorecard relevant to private-sector companies?

Many major corporations have adopted the balanced scorecard as their framework for executing strategy and monitoring performance. It has been found to be an effective way to achieve that most elusive of executive goals: execution.

Is the balanced scorecard relevant to nonprofit organizations?

Non-profit organisations are committed to a mission, and they need to focus their limited resources efficiently in order to achieve mission effectiveness and value for their members and sponsors. The balanced scorecard system has multiple focus on several perspectives, including financial performance. For a non-profit organization, profit is not a determining goal of strategy; but good stewardship is important, so this perspective or “lense” is used to describe the financial aspect of performance. In this case, the balanced scorecard provides a comprehensive framework that will help association directors and managers better define strategies, track performance, and provide data to show their various stakeholder groups how well they are performing in terms of mission value and outcomes.

How is the balanced scorecard developed and deployed?

Balanced Scorecard Australia normally follows the Balanced Scorecard Institute’s framework for developing and implementing a balanced scorecard system, first developed in 1997. This framework has been used successfully in over 100 organisations worldwide – organisations including business and industry, government departments and agencies, and non-profit bodies. Organizations ranging in size from six employees to over 100,000 members have used the framework. The normal steps, in sequential order, are:

1. Assessment of the organisation
2. Confirmation or development of the organisation’s principal strategies
3. Developing Strategic Objectives for the organisation
4. Developing Strategy Maps for the organisation
5. Developing the organisation’s Performance Measures and Targets
6. Developing the organisation’s Strategic Initiatives
7. Automation
8. Cascading the BSC throughout the organization
9. Ongoing monitoring - the system in use.

A description of each step, and how the steps relate to each other, is contained in two articles available for download on the Blanced Scorecard Institute's Web site: “A Balancing Act”, and “A Balancing Act: Sustaining New Directions”

How long does a balanced scorecard system take to develop and implement?

Typically, building and implementing an enterprise-level (Tier 1) balanced scorecard takes two to three months. Developing aligned scorecards for business and support units (Tier 2), and teams and individuals (Tier 3) takes an additional three to six months. These estimates are for a complete strategic planning and management system and includes the change management, leadership development, communications strategy and planning activities that make the scorecard system sustainable. The development process in an organisation needs to be undertaken by a cross-functional team guided by an experienced balanced scorecard facilitator.

How much does it cost to build and implement a balanced scorecard system?

Expert help is required to build and implement a scorecard system. Each organization is unique, so it is not possible to provide an estimate without knowing more about an organization.

If you would like a no commitment estimate, please contact us.on 03 96078530 or at admin@balancedscorecardauatralia.com and one of our senior associates will be happy to discuss options with you. Balanced Scorecard Australia only commences consultancies after full discussions and with a written agreement concerning fees.

How does the balanced scorecard compare to the Six Sigma management approach?

A balanced scorecard system is a strategic management system for an entire organisation. Six Sigma is a methodology for achieving improvements in internal business processes, although in some organisations it has taken on a broader role. Six Sigma is defined by Quality America as "… a quality Improvement methodology structured to reduce product or service failure rates to a negligible level (six sigma is equivalent to approximately 3.4 failures per million events). To achieve these levels of quality, Six Sigma encompasses all aspects of a business, including management, service delivery, design, production and customer satisfaction." Six Sigma was developed at Motorola, GE and Allied Signal and is widely used in many businesses. While the original concept has expanded over the years to become more strategic, most balanced scorecard organizations use Six Sigma as a methodology to improve the efficiency of internal business processes on a project by project basis.

Can you please give me a list of metrics or KPI's (key performance indicators) for my balanced scorecard?

No. The balanced scorecard is not a cookbook of performance measures. It requires creative strategic thinking and decisions by many people throughout an organisation to develop an effective balanced scorecard system. No two organizations are alike.

What are the implications of balanced scorecard on budgetary systems?

In its full development, an organisation’s balanced scorecard system provides the "front end" of performance-based budgets. Its performance measures and strategic plans provide the guidance for budget formulation and resource allocation. Some organizations have developed flexible strategy implementation and financial management systems that allow continuous reallocation of funds, without the need for major cyclical efforts in budgeting.

Where can we get software to support the balanced scorecard?

There are a large number of vendors of BSC software. Commercially available BSC software ranges from simple spreadsheet and database systems, to more complete performance information, business intelligence, and data warehouse offerings. The various software products available are becoming steadily more advanced, but all contain strengths and weaknesses. While a particular product may suit one organisation it may be totally unsuitable for another. Balanced Scorecard Australia does not promote the products of any specific vendor.

*But please note that the balanced scorecard is not a software system. The balanced scorecard is a full strategic planning and management system, the development of which requires considerable preparation, leadership, education, and communication within the organisation. However, once an organisation has developed its balanced scorecard system, there comes a time to consider the purchase of software to support it.

How can we ensure that our balanced scorecard system is maintained in the long term?

It is important not only to build the system right, but to maintain it by continual use and re-education of personnel on its purpose and benefits. Since everything is changing in the business environment, a balanced scorecard program is never "done" -- it is an ongoing journey. So the key is to maintain strategic alignment to mission and vision and desired long-term strategic results -- these are unlikely to change much, and they provide a "pivot" around which everything else revolves. Leaders should help to clarify this vision. Use our recommended communication techniques to keep people focused on these results and the strategies for getting there.

Key Performance Indicators (KPI)

How an organization defines and measures progress toward its goals

Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organization define and measure progress toward organizational goals.
Once an organization has analyzed its mission, identified all its stakeholders, and defined its goals, it needs a way to measure progress toward those goals. Key Performance Indicators are those measurements.

What Are Key Performance Indicators (KPI)?

Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organization. They will differ depending on the organization. A business may have as one of its Key Performance Indicators the percentage of its income that comes from return customers. A school may focus its Key Performance Indicators on graduation rates of its students. A Customer Service Department may have as one of its Key Performance Indicators, in line with overall company KPIs, percentage of customer calls answered in the first minute. A Key Performance Indicator for a social service organization might be number of clients assisted during the year.

Whatever Key Performance Indicators are selected, they must reflect the organization's goals, they must be key to its success,and they must be quantifiable (measurable). Key Performance Indicators usually are long-term considerations. The definition of what they are and how they are measured do not change often. The goals for a particular Key Performance Indicator may change as the organization's goals change, or as it gets closer to achieving a goal.

Key Performance Indicators Reflect The Organizational Goals

An organization that has as one of its goals "to be the most profitable company in our industry" will have Key Performance Indicators that measure profit and related fiscal measures. "Pre-tax Profit" and "Shareholder Equity" will be among them. However, "Percent of Profit Contributed to Community Causes" probably will not be one of its Key Performance Indicators. On the other hand, a school is not concerned with making a profit, so its Key Performance Indicators will be different. KPIs like "Graduation Rate" and "Success In Finding Employment After Graduation", though different, accurately reflect the schools mission and goals.

Key Performance Indicators Must Be Quantifiable

If a Key Performance Indicator is going to be of any value, there must be a way to accurately define and measure it. "Generate More Repeat Customers" is useless as a KPI without some way to distinguish between new and repeat customers. "Be The Most Popular Company" won't work as a KPI because there is no way to measure the company's popularity or compare it to others.

It is also important to define the Key Performance Indicators and stay with the same definition from year to year. For a KPI of "Increase Sales", you need to address considerations like whether to measure by units sold or by dollar value of sales. Will returns be deducted from sales in the month of the sale or the month of the return? Will sales be recorded for the KPI at list price or at the actual sales price?

You also need to set targets for each Key Performance Indicator. A company goal to be the employer of choice might include a KPI of "Turnover Rate". After the Key Performance Indicator has been defined as "the number of voluntary resignations and terminations for performance, divided by the total number of employees at the beginning of the period" and a way to measure it has been set up by collecting the information in an HRIS, the target has to be established. "Reduce turnover by five percent per year" is a clear target that everyone will understand and be able to take specific action to accomplish.

Key Performance Indicators Must be Key To Organizational Success

Many things are measurable. That does not make them key to the organization's success. In selecting Key Performance Indicators, it is critical to limit them to those factors that are essential to the organization reaching its goals. It is also important to keep the number of Key Performance Indicators small just to keep everyone's attention focused on achieving the same KPIs.

That is not to say, for instance, that a company will have only three or four total KPIs in total. Rather there will be three or four Key Performance Indicators for the company and all the units within it will have three, four, or five KPIs that support the overall company goals and can be "rolled up" into them.

If a company Key Performance Indicator is "Increased Customer Satisfaction", that KPI will be focused differently in different departments. The Manufacturing Department may have a KPI of "Number of Units Rejected by Quality Inspection", while the Sales Department has a KPI of "Minutes A Customer Is On Hold Before A Sales Rep Answers". Success by the Sales and Manufacturing Departments in meeting their respective departmental Key Performance Indicators will help the company meet its overall KPI.

Good Key Performance Indicators vs. Bad

Bad:

• Title of KPI: Increase Sales
• Defined: Change in Sales volume from month to month
• Measured: Total of Sales By Region for all region
• Target: Increase each month

What's missing? Does this measure increases in sales volume by dollars or units? If by dollars, does it measure list price or sales price? Are returns considered and if so do the appear as an adjustment to the KPI for the month of the sale or are they counted in the month the return happens? How do we make sure each sales office's volume numbers are counted in one region, i.e. that none are skipped or double counted? How much, by percentage or dollars or units, do we want to increase sales volumes each month?(Note: Some of these questions may be answered by standard company procedures.)

Good:

• Title of KPI: Employee Turnover
• Defined: The total of the number of employees who resign for whatever reason, plus the number of employees terminated for performance reasons, and that total divided by the number of employees at the beginning of the year. Employees lost due to Reductions in Force (RIF) will not be included in this calculation.
• Measured: The HRIS contains records of each employee. The separation section lists reason and date of separation for each employee. Monthly, or when requested by the SVP, the HRIS group will query the database and provide Department Heads with Turnover Reports. HRIS will post graphs of each report on the Intranet.
• Target: Reduce Employee Turnover by 5% per year.

What Do I Do With Key Performance Indicators?

Once you have good Key Performance Indicators defined, ones that reflect your organization's goals, one that you can measure, what do you do with them? You use Key Performance Indicators as a performance management tool, but also as a carrot. KPIs give everyone in the organization a clear picture of what is important, of what they need to make happen. You use that to manage performance. You make sure that everything the people in your organization do is focused on meeting or exceeding those Key Performance Indicators. You also use the KPIs as a carrot. Post the KPIs everywhere: in the lunch room, on the walls of every conference room, on the company intranet, even on the company web site for some of them. Show what the target for each KPI is and show the progress toward that target for each of them. People will be motivated to reach those KPI targets.

What are Key Performance Indicators?

What are Key Performance Indicators? 

Key performance indicators consist of a set of predetermined measurable objectives for an organization and can involve any aspect of an organization that is considered vital to its success. In order to create effective key performance indicators, an organization must have a mission with clearly defined goals and objectives. For example, vague goals such as to be the best in the industry won’t work as key performance indicators because it is too broad of a statement. The goals must be expressed in measurable terms and agreed upon by those involved with the organization.

Key performance indicators can be presented in any combination of reports, spreadsheets, or charts. They provide a visual real-time snapshot of the strength of a business or organization based on the specific predefined measures. The method in which they are displayed varies, as it depends greatly on the objective being measured and its target audience.

Key performance indicators from organization to organization depending on the type of business and its objectives. They can be either financial or non-financial. For example, a trucking company may use the comparison of the number of truck accidents involving their drivers that occurred per miles traveled to the national average as a key performance indicator. This would be a way of tracking their safety record. An emergency health care facility may have the average wait time for patients to be treated per time of day as a key performance indicator. This would allow them to determine if adjustments to staffing levels or training are desirable.

Along the same lines, a company dealing in sales may use the percentage of new customers that were referred to them by existing customers as a key performance indicator. The same sales company could also have another key performance indicator as a percentage comparison of the current year’s profit to the previous year’s profits with a target of a specified percentage each year.

Once a key performance indicator is defined, it is rarely changed unless the actual goals of the organization change. In fact, to be useful, it is very important for the key performance indicator to consistently maintain the same definition from year to year so that the progress of the organization can be monitored effectively. In this way, business practices and/or strategic planning can be reexamined if key performance indicators show a decrease in progress towards defined goals.

What is a Key Performance Indicator (KPI)?

Key Performance Indicators (KPIs) help organisations understand how well they are performing in relation to their strategic goals and objectives. In the broadest sense, a KPI provides the most important performance information that enables organisations or their stakeholders to understand whether the organisation is on track or not.

Key Performance Indicators

Measuring what matters the most

KPIs serve to reduce the complex nature of organisational performance to a small number of key indicators in order to make it more digestible for us. This is the same approach we use in our daily lives. For example, when you go to your doctor he might measure blood pressure, cholesterol levels, heart rate and your body mass index as key indicators of your health. With KPIs we are trying to do the same in our organisations.

The problems with KPIs

In practice, the term KPI is overused and often describes any form of measurement data and performance metrics used to measure business performance. Instead of clearly identifying the information needs and then carefully designing the most appropriate indicators to assess performance, we often observe what we have termed the ‘ICE’ approach:

• Identify everything that is easy to measure and count
• Collect and report the data on everything that is easy to measure and count
• End up scratching your head thinking “What the heck are we going to do with all this performance data stuff?

Why do we measure performance?

The reason why we measure performance in organisations is often reduced to simple homilies, such as ‘you can’t manage anything unless you measure it’ or ‘what gets measured gets done’. The tree main reasons for measuring performance are:

• To lean and improve
• To report externally and demonstrate compliance
• To control and monitor people

Of these three the first is the most important, the second is something organisations just have to do and the third one can cause major problems.

Measuring to learn and improve performance

Measuring for learning and improvement is the most natural form of using KPIs and something we do every day in our daily lives. The aim is to equip our employees with the information they need to make better informed decisions that lead to improvements. In this context, KPIs are used internally as the evidence to inform management decisions, to challenge strategic assumptions and for continuous learning and improvement.

Measuring to report externally and demonstrate compliance

Another reason for collecting KPIs is to inform external stakeholders and to comply with external reporting regulations and information requests. When measuring for external reporting and compliance purposes, any reports and associated indicators can either be produced on a compulsory basis such as annual financial statements, accounts, or performance reports for regulators; or can be on a voluntary basis such as environmental impact reports, for example.

Measuring to control and monitor people

KPIs can also be used in a top-down command-and-control fashion to guide and control people’s behaviors and actions. Here, measures are used to set goals or rules, to objectively access the achievement of these goals, and to provide feedback on any unwanted variance between achievements and goals. Here, the aim of measurement is to eliminate variance and improve conformity. In this context, measures are often tightly linked to reward and recognition structures. Research has shown that this approach is dangerous and often leads to a culture in which people focus on delivering the measures but not the performance (i.e. hitting the target but missing the point).

Using KPIs correctly

Best practice organisations (a) clearly understand what indicators are required for learning and improvement and focus on those, (b) they separate out the external reporting indicators if they are not relevant internally to avoid confusion and data overload, and (c) they try to avoid using indicators for controlling people.

KPIs are more than numbers

We often associate KPIs with quantifications and numbers. The perceived objective is to provide us with an objective, uniform and rigorous picture of reality. However, this seems to work in some areas better than in others. We find it easy to quantify things like money eared, customer transactions in a day, number of patients treated and we can count incoming complaints or number of service visits. Some things though are not easily counted. Things like overall service delivery, organisational culture, our know-how, the strengths of customer relationships or the reputation of your organisation are all inherently difficult to simply count.

Therefore measurement in our modern world goes beyond numbers and can equally include words, pictures and videos to describe and assess performance. Measurement is much more of a social activity. Just think about choosing a restaurant for the next special occasion. You reflect on your previous experiences of the restaurants you have visited and you might read reviews of new restaurants on restaurant websites or restaurant guide books in order to form an opinion about the different restaurants in your area. You might watch videos of the restaurant and look at pictures. Based on the different reviews, star ratings and pictures you then subconsciously, or even consciously, rank different elements such as food quality, service, atmosphere and price to choose the right restaurant for that occasion.

Can we measure anything?

Yes, there is nothing that we cannot measure. But at the same time we have to be aware that we can’t design perfect indicators that will measure things perfectly. KPIs are there to give us information which helps us to make better informed decisions. It is about reducing uncertainty and it is therefore okay to use proxy indicators. In the same way we are used to using proxies when measuring things like temperature - where we might measure the expansion of mercury in a thermometer as a proxy for temperature.

Words, numbers, star ratings or traffic lights are all valid forms of measurement. What matters the most is that you measure the relevant things that will help you answer the questions that matter the most in your organisation. We prefer therefore to use the word ‘indicator’, rather than ‘measure’. A performance indicator ‘indicates’ a level of performance, but it does not claim to ‘measure’ it (see Figure 2). If, for example, we introduce a new indicator to assess customer satisfaction, this indicator will give us an indication of how customers feel; however, it will never ‘measure’ customer satisfaction in its totality. In the same way an IQ test will give us an indication of intelligence (especially our mathematical and logical reasoning), but will never completely measure all dimensions of human intelligence (e.g. emotional intelligence, hand-eye coordination, special awareness).

How to design KPIs: The question is the answer

KPIs should be clearly linked to the strategy, i.e. the things that matter the most. Once you have agreed, defined and mapped your strategy you can design KPIs to track progress and gain relevant insights to help manage and improve performance. KPIs have to provide you with answers to your most important questions. KPIs should be primarily designed to empower employees and provide them with the relevant information to learn. This in turn should improve the decision making and lead to improved performance

OVERVIEW of RMAF STRATEGIC READINESS SYSTEM

The RMAF Strategic Readiness System (SRS) is an integrated strategic management and measurement system developed and adopted as the way forward for the RMAF. This system uses the Balanced Scorecard methodology for establishing and communicating the RMAF’s vision, mission, and strategy to stakeholders and personnel, and for aligning day-to-day work to the strategy.

The SRS is developed to be aligned with MINDEF aspiration for promoting performance excellence throughout all levels of organizational hierarchy of the Malaysian Armed Forces. SRS provides a disciplined framework for planning and measuring strategy, as viewed from different dimensions, or perspectives, of the RMAF performance.
 

The process of developing this system which is managed and run by the RMAF’s own BSC Management Team help to ensure that the RMAF is prepared and ready to undertake its role of defending the national sovereignty, integrity and interest through effective use of air power.

SRS is a precision readiness measurement tool that provides RMAF leadership with accurate, objective, predictive, and actionable readiness information to dramatically enhance resource management towards achieving airspace security and integrity to ensure the national security of Malaysia. The SRS will be used in tandem with the Air Power Doctrine as a guide for the overall RMAF strategic readiness performance measurement at all levels of the organization which focuses on three critical areas: National Airspace Security, Operational Excellence, and Strategic Partnership.

Sample Performance Measures (KPI)

Sample Accounting Performance Measures

Percent of late reports
Perccent of errors in reports
Errors in input to Information Services
Errors reported by outside auditors
Percent of input errors detected
Number of complaints by users
Number of hours per week correcting or changing documents
Number of complaints about inefficiencies or excessive paper
Amount of time spent appraising/correcting input errors
Payroll processing time
Percent of errors in payroll
Length of time to prepare and send a bill
Length of time billed and not received
Number of final accounting jobs rerun
Number of equipment sales miscoded
Amount of intra-Company accounting bill-back activity
Time spent correcting erroneous inputs
Number of open items
Percent of deviations from cash plan
Percent discrepancy in MRB and line scrap reports
Travel expense accounts processed in three days
Percent of advances outstanding
Percent data entry errors in accounts payable and general ledger
Credit turnaround time
Machine billing turnaround time
Percent of shipments requiring more than one attempt to invoice
Number of untimely supplier invoices processed
Average number of days from receipt to processing

Sample Clerical Performance Measures

Misfiles per week
Paper waste
Errors per type page
Administration errors (not using the right procedures)
Number of times messages are not delivered
Percent of action items not done on schedule
Percent of inputs not received on schedule
Percent of coding errors on time cards
Period reports not completed on schedule
Percent of phone calls answered within two rings
Percent of phone calls dialed correctly
Pages processed error-free per hour
Clerical personnel/personnel support
Percent of pages retyped
Percent of impressions reprinted

Sample Product Development/Engineering Performance Measures

Percent of drafting errors per print
Percent of prints released on schedule
Percent of errors in cost estimates
Number of times a print is changed
Number of off-specifications approved
Simulation accuracy
Accuracy of advance materials list
How well the product meets customer expectations
Field performance of product
Percent of error-free designs
Percent of errors found during design review
Percent of repeat problems corrected
Time to correct a problem
Time required to make an engineering change
Percent of reports with errors in them
Data recording errors per month
Percent of evaluations that meet engineering objectives
Percent of special quotations that are successful
Percent of test plans that are changed (change/test plan)
Number of meetings held per quarter where quality and defect prevention were the main subject
Person-months per released print
Percent of total problems found by diagnostics as released
Number of problems that were also encountered in previous products Cycle time to correct customer problem
Number of errors in publications reported from the plan and field Number of products that pass independent evaluation error-free
Number of misused shipments of prototypes
Number of unsuccessful pre-analyses
Number of off-specifications accepted
Percent of requests for engineering
Number of days late to pre-analysis
Percent of requests for engineering action open for more than two weeks
Effectiveness of regression tests
Number of restarts of evaluations and tests
Percent of corrective action schedules missed
Number of days for the release cycle
Cost of input errors to the computer
Percent of bills of material that are released in error
Spare parts cost after warranty
Customer cost per life of output delivered

Sample Finance Performance Measures

Percent error in budget predictions
Computer rerun time due to input errors
Percent of financial reports delivered on schedule
Number of record errors per employee
Percent of error-free vouchers
Percent of bills paid so Company gets price break
Percent of errors in checks
Entry errors per week
Number of payroll errors per month
Number of errors found by outside auditors
Number of errors in financial reports
Percent of errors in travel advance records
Percent of errors in expense accounts detected by auditors
Computer program change cost

Sample Information Systems Performance Measures

Keypunch errors per day
Input correction on data entry
Reruns caused by operator error
Percent of reports delivered on schedule
Errors per thousand lines of code
Number of changes after the program is coded
Percent of time required to debug programs
Number of cost estimates revised
Percent error in forecast
Percent error in lines of code required
Number of coding errors found during formal testing
Number of test case errors
Number of test case runs before success
Number of revisions to plan
Number of documentation errors
Number of revisions to program objectives
Number of errors found after formal test
Number of error-free programs delivered to customer
Number of process step errors before a correct package is ready
Number of revisions to checkpoint plan
Number of changes to customer requirements
Percent of programs not flow-diagrammed
Percent of customer problems not corrected per schedule
Percent of problems uncovered before design release
Percent change in customer satisfaction survey
Percent of defect-free artwork
System availability
Terminal response time
Mean time between system IPL's
Mean time between system repairs
Time before help calls are answered
Rework costs resulting from computer program

Sample Management Performance Measures

Security violations per year
Percent variation from budget
Percent of target dates missed
Percent personnel turnover rate
Percent increase in output per employee
Percent absenteeism
Percent error in planning estimates
Percent of output delivered on schedule
Percent of employees promoted to better jobs
Department morale index
Percent of meetings that start on schedule
Percent of employee time spent on first-time output
Number of job improvement ideas per employee
Ratio of direct to indirect employees
Increased percent of market
Return on investment
Percent of appraisals done on schedule Percent of changes to project equipment required
Normal appraisal distribution
Percent of employee output that is measured
Number of grievances per month
Number of open doors per month
Percent of professional employees active in professional societies
Percent of managers active in community activities
Number of security violations per month
Percent of time program plans are met
Percent of documents that require two management reviews
Percent of employees who can detect and repair their own errors
Percent of delinquent suggestions Improvement in opinion surveys
Number of decisions made by higher-level management than required by procedures Percent of time cards that have errors on them signed by managers
Percent of employees taking higher education
Number of damaged equipment and property reports
Number of employees dropping out of classes
Percent error in personnel records
Improvement in customer satisfaction survey
Volume actual versus planned
Revenue actual versus plan
Percent of procedures less than 10 pages
Number of procedures with fewer than three acronyms and abbreviations
Number of formal reviews before plans are approved
Percent of employees active in improvement teams
Number of hours per year of career and skill development training per employee
Number of user complaints per month
Number of variances in capital spending
Percent revenue/expense ratio below plan
Percent of executive interviews with employees
Percent of departments with disaster recovery plans
Percent of appraisals with quality as a line item that makes up more than 30 percent of the evaluation
Percent of employees with development plans
Direct/indirect ratio
Revenue generated over strategic period
Number of iterations of strategic plan
Number of employees participating in cost effectiveness
Dollars saved per employee due to new ideas and/or methods
Result of peer reviews
Number of tasks for which actual time exceeded estimated time
Data integrity Warranty costs
Cost of poor quality

Sample Personnel Performance Measures

Percent of employees who leave during the first year
Number of days to answer suggestions
Number of suggestions resubmitted and approved
Turnover rate due to poor performance
Number of grievances per month
Percent of employment requests filled on schedule
Number of days to fill an employment request
Time to process an applicant
Average time a visitor spends in lobby
Time to get security clearance
Time to process insurance claims
Percent of employees participating in company-sponsored activities
Percent of complaints about salary
Percent of personnel problems handled by employees' managers
Percent of employees participating in voluntary health screening
Percent of offers accepted
Percent of retirees contacted yearly by phone
Percent of training classes evaluated excellent
Percent deviation to resource plan
Wait time in medical department
Number of days to respond to applicant
Percent of promotions and management changes publicized
Percent of error-free newsletters
Personnel cost per employee
Cost per new employee
Management evaluation of management education courses
Opinion survey ratings

Sample Procurement/Purchasing Performance Measures

Percent of discount orders by consolidating
Errors per purchase order
Number of orders received with no purchase order
Routing and trace errors per shipment
Percent of supplies delivered on schedule
Percent decrease in parts cost
Expediters per direct employees
Number of items on the hot list
Percent of suppliers with 100 percent lot acceptance for one year
Labor hours per $10,000 purchases
Purchase order cycle time
Number of times per year line is stopped due to lack of supplier parts
Percent of parts with two or more suppliers
Average time to fill emergency orders
Average time to replace rejected lots with good parts
Percent of lots received on line late
Time to answer customer complaints
Percent of phone calls dialed correctly
Percent of purchase orders returned due to errors or incomplete description Percent of defect-free supplier model parts
Percent projected cost reductions missed
Time required to process equipment purchase orders
Number of items billed but not received Stock costs
Supplier parts scrapped due to engineering changes
Parts costs per total costs
Actual purchased materials cost per budgeted cost
Cost of rush implants

Sample Quality Assurance Performance Measures

Percent error in reliability projections
Percent of product that meets customer expectations
Time to answer customer complaints
Number of customer complaints
Number of errors detected during design and process reviews
Percent of employees active in professional societies
Number of audits performed on schedule
Percent of QA personnel to total personnel
Percent of quality inspectors to manufacturing directs
Percent of QE's to product and manufacturing engineers
Number of engineering changes after design review
Number of process changes after process qualification
Errors in reports
Time to correct a problem
Percent of suppliers at 100 percent lot acceptance for one year
Percent of lots going directly to stock
Percent of problems identified in the field
Variations between inspectors doing the same job
Percent of reports published on schedule
Number of complaints from manufacturing management
Percent of field returns correctly analyzed
Time to identify and solve problems
Percent of lab services not completed on schedule
Percent of improvement in early detection of major design errors
Percent of errors in defect records
Number of reject orders not dispositioned in five days
Number of customer calls to report errors
Number of committed supplier plans in place
Percent of correlated test results with suppliers
Receiving inspection cycle time
Number of requests for corrective action being processed
Time required to process a request for corrective action
Number of off-specifications approved
Percent of part numbers going directly to stock
Number of manufacturing interruptions caused by supplier parts
Percent error in predicting customer performance
Percent product cost related to appraisal scrap and rework
Percent skip lot inspection
Percent of qualified suppliers
Number of problems identified in-process
Cost of scrap and rework that was not created at the rejected operation
Level of customer surveys

Sample Security/Safety Performance Measures

Percent of clearance errors
Time to get clearance
Percent of security violations
Percent of documents classified incorrectly
Security violations per audit
Percent of audits conducted on schedule
Percent of safety equipment checked per schedule
Number of safety problems identified by management versus total safety problems identified
Safety accidents per 100,000 hours worked Safety violations by department
Number of safety suggestions
Percent of sensitive parts located

CHANGE vs CHANGE MANAGEMENT

What is the difference and why does it matter?

While change is about moving to a future state; change management is about supporting individual employees impacted by the change through their own transitions - from their own current state to their own future state that has been created by the project or initiative.

Change is...
At its most basic level, change is a movement out of a current state (how things are today), through a transition state and to a future state (how things will be done). Change happens all around us - at home, in our community and at work. Changes can be internally motivated or externally motivated. The change can be a dramatic departure from what we know, or it can be minor. Changes can be anticipated or unexpected. But in all cases, the fundamental nature of change is a movement from the current state through a transition state to a future state.
  The notion of these three states of change is prevalent in change management literature and in other improvement disciplines. In the change management arena, numerous authors have used various terms to describe these three states, but the notion is nearly universal. Even in other more technical improvement disciplines, the concept can be found - consider the As-Is and the To-Be notions in process redesign work.

Typically we take an organizational perspective when talking about change:

• We are moving to documented and managed processes from ad hoc processes.
• We are moving to an integrated system from numerous legacy systems.
• We are merging two organizations.
• We are introducing a new product to the market.
• We are introducing new equipment into the manufacturing processes.
• We are moving to call center specialists from a generalists model.

Each of these examples has a clear current state and a clear future state. A project or initiative in the organization is undertaken to give structure to the effort of designing the future state and developing a solution for the transition state.

However, every organizational change ultimately has individual impacts - the 10s or 100s or 1000s of employees who have to do their jobs differently when they adopt the solution. This is the role of change management.

Change management is...
Change management is necessary because organizational change - moving from an organizational current state to an organizational future state - ultimately impacts how people do their jobs (likely many people).

• The newly documented and managed processes are executed by someone.
• The new integrated database will be accessed by someone.
• Employees in the newly merged organization must work differently.
• The new product will impact how someone does their job.

While change is about moving to a future state; change management is about supporting individual employees impacted by the change through their own transitions - from their own current state to their own future state that has been created by the project or initiative.

Some employees will rapidly embrace change. Others will be reluctant. Some will be happy with the change and others will be upset by it. Some employees will change quickly, others may take some time, and there may be a group that will not embrace the change. Change management provides the process, tools and principles to support the individual transitions precipitated from an organizational future state.

The connection, then, between "change" and "change management" can be characterized as follows:

• The changes in our organization create new future states for how we operate. To reach those future states, individual employees have to do their jobs differently. The attainment of the organizational future state depends on the success of individuals reaching their own personal future states. Change management is the structured and intentional approach to enabling individual employees to adopt the changes required by projects and initiatives.

The underlying point here is that the results and outcomes of a project or initiative are defined by and depend on employees adopting the change, so change management is an essential tool for delivering results and outcomes.

What you can do
Below are several tips for practitioners who may be experiencing the confusion over change and change management.

1) Identify the confusion - are you experiencing this confusion with anyone you are supporting? In your work, have you seen confusion or lack of clarity about change and change management? If so, who are you seeing the confusion with:

- Project leaders and team
- Solution designers and developers
- Executives and senior leaders
- Other change management practitioners
- Others

2) Use the states of change - at both the organizational level and the individual level - as a way to introduce and position change management. Start the conversation about the current state, transition state and future state. And then continue the conversation to focus on individual current states, transition states and future states.

3) Introduce the notion by asking a simple question: Who will have to do their jobs differently as a result of this project or initiative? This is the beginning of the process of segmenting out the impacted groups so you can address them specifically from a change management perspective. And by asking and helping answer the question, you are establishing a working relationship with the project team that provides a solid start for your change management work.

Once you have effectively positioned change management and shown the scope of your work (namely, the individual employees who will have to do their jobs differently), you are ready to move forward with a structured approach to change management.