Developing KPI for public organisation (

Legal InformationI have made my best effort to produce a high quality, informative and helpful guide on strategic performance management system in public and nonprofit organization. All slides are copyrights and trademarks of the owner. No part of this slides may be stored in a retrieval system, transmitted, reproduced or distributed in any way, including but not limited to digital copying without the prior agreement of the author.AuthorMuhamad Bustaman Haji Abdul Manaf mbustaman@hotmail.comTel: 019 9060524 : 

Legal InformationI have made my best effort to produce a high quality, informative and helpful guide on strategic performance management system in public and nonprofit organization. All slides are copyrights and trademarks of the owner. No part of this slides may be stored in a retrieval system, transmitted, reproduced or distributed in any way, including but not limited to digital copying without the prior agreement of the author.AuthorMuhamad Bustaman Haji Abdul Manaf mbustaman@hotmail.comTel: 019 9060524

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DEVELOPING KPI FOR PUBLIC SECTOR ORGANIZATIONS PRESENTED BY Muhamad Bustaman Abdul Manaf Head of Quality Management Department Institute Aminuddin Baki National Institute of Educational Management and Leadership Ministry of Education 019900524/0360571582

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Measuring performance allows an organization to objectively determine what is working and what is not. In addition, by measuring success, managers can reward and learn from best practices. KPI’s provide the high-level snapshots of the organization so essential for providing feedback to guide change and serve as a diagnostic tool to identify areas for improvement and set priorities. The terms “KPI” originates from three different words: Key, Performance, and Indicators. These terms can be described in the manner that the KPI should be seen as only Key when it is of fundamental importance in gaining competitive advantage and is a make or break component in the success or failure of an organization; only relating to Performance when it can be clearly measured, quantified and easily influenced by the organization; and only an Indicator if it provides leading information on future performance. Indeed, it is an honor to be with you for facilitating the workshop and I sincerely hope you will find this workshop useful, informative and practical. With best regards, Muhd.Bustaman Abd.Manaf Institute Aminuddin Baki, MOE 0199060524/mbustaman@hotmail.com Welcome to the KPI workshop!

Self-Introduction : 

Self-Introduction Name, Organization Experience/knowledge about Performance Measurement: KPI & Balanced Scorecard. Your expectations of the workshop

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This one-day workshop is designed to assist participants to: Understand the concept of performance management system in the public organization Develop organization’s performance management system using KPI Develop Key Performance Indicators (KPIs) in line with missions, vision and objectives of the educational organization Workshop Objectives

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School Assessment: Status of strategic planning practices. Introduction to strategic Performance Management System (PMS) for public organizations. Performance Measurement Framework Developing KPIs for education sector: Managing with KPIs Monitoring and reporting performances. Main Agenda

Main References : 

1. Allison and Kaye. (2003) Strategic Planning for Public and Non-profit Organizations. San Francisco: John Wiley & Son, Inc. 2. Bryson, J.M. (2004). Strategic planning for public and nonprofit organizations: A guide to strengthening and sustaining organizational achievement 3rd ed. San Francisco: Jossey-Bass. 3. Hairuddin.M.A. & Muhamad Bustaman.A.M. (2007) Perancangan Strategik Pembangunan Sekolah: Memperkasa dan Melonjakkan Kecemerlangan Institusi Pendidikan. Genting Highlands, Pahang: Institut Aminuddin Baki, Kementerian Pelajaran Malaysia. 4. Kaplan & Norton. (1996) Balanced Scorecard: Translating Strategy Into Action. Boston, Massachusetts: Harvard Business School Press. 5. Kaplan & Norton. (2004) Strategy Maps: Converting Intangible Assets Into Tangible Outcomes. Boston, Massachusetts: Harvard Business School Press. 6. Kaplan & Norton. (2006) Alignment: Using the Balanced Scorecard to Create Corporate Synergies. Boston, Massachusetts: Harvard Business School Press. 7. Miller, B.A. (2007) Assessing Organizational Performance in Higher Education. San Francisco: John Wiley & Son, Inc. 8. Niven, P.R. (2003). Balanced Scorecard: Step-by-step for Government and Nonprofit Agencies. San Francisco: Jossey-Bass. 9. Sevier, R. (2000). Strategic Planning for Higher Education Institution. Chicago, USA. Main References

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Establishing Performance Measurement System Using KPI in Malaysian Public Agencies Arahan Y.A.B. Perdana Menteri semasa MAPA pada 9 Januari 2004 Budaya pengurusan berasaskan pengukuran prestasi secara berterusan perlu diterapkan dalam Perkhidmatan Awam untuk meningkatkan kecekapan dan keberkesanan sistem penyampaian perkhidmatan agensi Kerajaan kepada pelanggan, khususnya orang ramai

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MISI & VISI Tetapkan Perkhidmatan Teras Tentukan Proses-proses Utama Ukur dan Nilai Prestasi Wujudkan KPI dan Tetapkan Sasaran Prestasi bagi setiap perkhidmatan Pantau Tahap Prestasi Tambah Baik Prestasi Perkhidmatan Yang Memuaskan Hati Pelanggan Nilai Secara Berterusan Kaji Semula Prestasi Agensi Kenalpasti Perkhidmatan-perkhidmatan Yang Disampaikan di bawah setiap Proses Utama Maklumbalas Pelanggan MODEL PENGUKURAN PRESTASI BERASASKAN PROSES

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LANGKAH-LANGKAH MEWUJUDKAN KPI DAN MELAKSANAKAN PENGUKURAN PRESTASI Ukur dan Nilai Prestasi Pantau Tahap Prestasi Tambah Baik Prestasi Penambahbaikan Berterusan Tahap Prestasi Masa Langkah 1 Langkah 4 Langkah 3 Langkah 2 Wujudkan KPI dan Tetapkan Sasaran Prestasi

Why we must measuring performance? : 

Why we must measuring performance? Kaplan (2003): If we can’t measure our processes, we can’t manage our processes If we can’t manage our processes, we can’t change our processes for improvement If we can’t improve our processes, we can’t meet or exceed our customers’ expectations MEASURE - MANAGE – CHANGE - EXCEED

Why do organisations measure performance? (Charles Parker, 2000) : 

Why do organisations measure performance? (Charles Parker, 2000) 1. identify success2. identify whether they are meeting customer requirement3. help them to understand their process.4. identify where problems bottlenecks, waste, etc.5. ensure decisions are based on fact, not on supposition, emotion or intuition6. show if improvements planned, actually happened.

Performance Measurement Study Findings : 

Performance Measurement Study Findings

TRANSLATING A MISSION INTO DESIRED OUTCOMES USING BSC-KAPLAN& NORTON (2003) : 

TRANSLATING A MISSION INTO DESIRED OUTCOMES USING BSC-KAPLAN& NORTON (2003) . MISSION Why we exist STRATEGY Our game plan PERSONAL OBJECTIVES What I need to do VISION What we want to be CORE VALUES What we believe in STRATEGIC INITIATIVES What we need to do BALANCED SCORECARD Implementation & focus Motivated & Prepared workforce Effective Processes STRATEGIC OUTCOMES Satisfied stakeholders Delighted Customers

Purpose of Assessment: Internal : 

Purpose of Assessment: Internal Senior Leaders Are we share in our purpose, and do we share a vision of excellence? Are we structured so as to maximize our resources and achieve our strategic goals? Are our guiding principles clear, and to what extent are we practicing them? Are we achieving what we intended to achieve in terms of teaching and services? Are we making progress on our strategic goals? Are we using our resources efficiently? What does it cost to manage quality in our programs and services? How many worker-hours are lost to illness and injury? Are our employees satisfied with their jobs? What is the quality of our leadership system and organizational structure? And more……..

Purpose of Assessment: Internal : 

Purpose of Assessment: Internal 2. Managing Strategy. To frame strategy; to clarify, operationalize, and align strategy; and to monitor strategy achievement. Managing Change … any alteration of activities in an organization that may be the result of changes in the structure of the organization, transfer of tasks, new product introduction, changes in attitude of group members or process, or any number of events inside and outside of an organization Change starts with a goal, often called a mission and vision… a reason for change

Purpose of Assessment : 

Purpose of Assessment Others External Assessment User Groups Access Academic Standards/Quality Affordability Academic Offerings Students progress and success Reputation and Ranking

10 Factor of Success Performance Measures : 

10 Factor of Success Performance Measures 1. Leadership 2. Commitment 3. Communication 4. Feedback 5. Resources 6. Customer Identification 7. Learning & Growth 8. Environmental Scanning 9. Sense of Purpose 10 Organizational Capacity

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IPO-Framework Program Logic Model The “Critical Few” Set of Measures Performance Dashboards The Balanced Scorecard Malcolm Baldrige National Quality Award EFQM Kanji's Business Excellence Model (KBEM) Performance Measurement Frameworks

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1. IPO-Framework (Frackmann, 1987) Goals Input Process Output Efficiency Effectiveness (Goal Achievement) Effectiveness Commitment Utilization Functioning Figure: Input-Process-Output Model for Evaluating Performance in Higher Education Institution

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2. Program Logic Model Inputs Processes Outputs Outcomes The model analyzes work into four categories or steps: inputs, activities/processes, outputs, and outcome. These represent the logical flow from (1) inputs – resources such as money, employees, and equipment, to (2) processes - work activities or programs, to (3) the immediate outputs of the work that are delivered to customers, to (4) outcomes or results that are the long-term consequences of delivering outputs. Note: This model is often used in government or not-for-profit organizations, where the mission and vision are not aimed at achieving a financial benefit.

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Input - Resources used to produce outputs and outcomes. Processes/Activities - What a program does with the inputs. Outputs - The products and services created or delivered (e.g. lecturers trained, courses delivered) Intermediate outcomes - Changes that have occurred in the lives of the beneficiaries and/or participants, but have fallen short of a significant benefit for them (e.g. attitudinal changes toward more civic participation). End outcomes - Changes that have occurred in the lives of beneficiaries and/or participants that constitute significant benefits to them (e.g. increased civic knowledge, increased likelihood to perform service). Logic Model Components

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Mission Completion Business Indicators Major Milestones Trust and Confidence Safety and Health 3. Critical Few Measures U.S. Department of Energy

Take 5! : 

Take 5!

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Laboratory Management Environmental Restoration and Waste Management Environment, Safety and Health Facilities/Project management Safeguards and Security Finance Human Resources Information Management Procurement Property Management 4. Performance Dashboards University of California Dashboard

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5. Malcolm Baldrige PerformanceExcellence Framework Strategic Planning Faculty and Staff Focus Customer/ Market Focus Patients Students Process Management Leadership Organizational Performance Results Measurement, Analysis, and Knowledge Management Organizational Profile: Environment, Relationships, and Challenges 120 85 85 450 90 85 85

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6. EFQM

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7. Kanji's Business Excellence Model (KBEM)

8. Balanced Scorecard Model : 

8. Balanced Scorecard Model

Tying the BSC to Resource Decisions : 

Tying the BSC to Resource Decisions Corporate Results Mission Vision Strategic themes Perspectives Objectives Measures Targets Initiatives Capital plan Operating budget Special projects Analysis Feedback

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9. PERFORMANCE PRISM MODEL

Take 5! : 

Take 5! NEXT SECTION: SECTION 3- MANAGING STRATEGY

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Bryson,2003

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MANDATE

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Surat-Surat KSN: PKPA

What is Mandate? : 

What is Mandate? Mandates are written and unwritten rules that govern and guide an institution and its stakeholders. Its maybe directly tied to laws, by laws, ordinances, acts and charters (Sevier, 2000)

Apakah itu Mandat? : 

Apakah itu Mandat? Kamus Dewan- DBP (2005): 1. Amanah yang diberikan oleh orang ramai. 2. Kuasa yang diberikan oleh oleh pihak yang lebih tinggi. 3. Surat kuasa, surat perintah 4. Kuasa yang diberikan untuk mentadbir

Contoh Petikan Mandat : 

Contoh Petikan Mandat Arahan Perbendaharan Per.16: Adalah menjadi kewajipan pegawai memahirkan diri. Kurang pengetahuan mengenai Arahan-arahan Perbendaharaan tidak akan diterima sebagai suatu alasan “Ignorance of the law is no excuse” Next: MISSION

Mission Statement : 

Mission Statement At the very least, your organization’s mission statement should answer three key questions: What are the reasons or needs that we exist to address? (the purpose of the organization) What are we doing to address these needs? (the business of the organization) What principles or beliefs guide our work? (the values of the organization)

What is a Mission Statement? : 

What is a Mission Statement? A mission statement describes the primary purpose for your existence – who you serve, what you provide and how you will provide it. Example: The mission statement of Lexus U.S. – ‘To attract and retain customers with the highest value products and services and the most satisfying ownership experience in America’

Criteria for Effective Mission Statement : 

Criteria for Effective Mission Statement Defines why we do, what we do; why the organization exists Short and sharply focused Is sufficiently broad Clear and easily understood Does not prescribe means Provides direction for doing the right things Addresses our opportunities Matches our competence Inspires our commitment Says in the end, what we want to be remembered for Next: Vision

What is a Vision? : 

What is a Vision? … What the organization intends to become ultimately A vision is like a dream. It’s the mental image of your organization’s ideal. It’s where you want to go, what you want to be. It’s perfectly acceptable for your vision, your dream to be unattainable, to be just out of reach. It’s what you reach for. The vision statement is where you describe this dream to the people who work for you in your business or on your team. Example: For years Pepsi’s vision statement was simply, ‘Beat Coke’

Vision Statement : 

Vision Statement A concise statement that defines the midterm to long term (three to ten years) goals of the organization. It should expresses how the organization wants to be perceived by the world.

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Characteristics of Good Vision Statement Easily understood by all stakeholders Briefly stated, yet clear and comprehensive in meaning Challenging, yet attainable Lofty, yet tangible Capable of stirring excitement for all stakeholders Not concerned with numbers Sets the tone for employees Conveys the organization’s strategic emphasis

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Vision Statement Mission Statement Next: values

Value Statement : 

Value Statement Value statement describes the principle that guide the organization’s work and includes a description of an organization’s philosophy and beliefs and often explains the organization’s relationship to its environment and resources. Sample values: Contribution, Alignment, Mutual support, Service, Compassion, Competence, Appreciation, Energy, Wonder, Risk, Fun, Safety, Excellence, Integrity, Responsibility, Awareness

Values of Visionary Companies : 

Values of Visionary Companies Sony: “Being a pioneer – not following others, but doing the impossible” Walt Disney: “To bring happiness to millions” Wall Mart: “We exist to provide value to our customers” Motorola: “To honorably serve the community by providing products and services of superior quality at a fair price” Marriott: “Customers are guest” Johnson & Johnson: “The company exists to alleviate pain and disease” Hewlett_Packard: “We exist as corporation to make contribution” General Electric: “Improving the quality of life through technology and innovation” 3M: “Respect for individual initiative and personal growth” Citicorp: “Expansionism – of size, of service offered, of geographic presence” Boeing: “To eat, breathe, and sleep the world of aeronautics”

Take 5! : 

Take 5! Next: Environmental Analysis

Important Questions : 

Important Questions Where are we now? What are our stakeholders want and needs? What do our assessment data tell us? What are we doing well? What can we improve? External opportunities/threats? What is happening in the external environments? Trends?

THE ORGANIZATION AS AN ICEBERG : 

THE ORGANIZATION AS AN ICEBERG 14.5

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THE EXTERNAL ENVIRONMENT Customers Competitors Suppliers Public Pressure Groups The Organization General Environment Specific Environment 3.11 © 2003 Pearson Education Canada Inc.

PEST : 

PEST Political Legislation and Regulation International relations, world peace Economic Economic cycles, recession, boom Currency rates, interest rates, tariff/taxes/quotas Capital, labour and commodity markets Social Demographics, foreigners Tastes, fashion, perception, worldview Environmental awareness Technological Process effect development Product capability ICT

Take 5! : 

Take 5! Next: Strategy

What are Goals? : 

What are Goals? Goals … are targets set for performance. Goals should answer the question: “What do we hope to achieve in support of the mission and vision (over the period …)?”

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Strategic goals define what must be done to achieved the mission & vision. (Niven, 2003) They are long-range performance targets that are consistent with an organization’s mission, usually requiring a substantial commitment of resources and achievement of short-term and mid-term supporting plans.

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Goals: Strategy components; action items that must be done (e.g., improve students achievement, increase staff skills, develop a new teaching & learning process). They are long-range performance targets. (BSC Collaborative Inc.2005)

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Goal is the overall expected outcome based on initial assumptions. Target is the planned outcome of a specific indicator. Forecast is the expected outcome based on current assumption.

Strategic Goals : 

Mission Vision Goals Objectives Measures Targets Actions/Initiatives Why we exist What we want to be What we must achieve to be successful Indicators and Monitors of success Desired level of performance and timelines Planned Actions to Achieve Objectives O1 O2 AI1 AI2 AI3 M1 M2 M3 T1 T1 T1 Specific outcomes expressed in measurable terms (NOT activities) Strategic Goals Goals serve as the starting point for cascading Objectives, Initiatives, and Measures down through the organization

Contoh perhubungan antara misi,matlamat & strategi : 

Contoh perhubungan antara misi,matlamat & strategi . MISI NASIONAL MATLAMAT: Melahirkan Modal Insan Kelas Pertama Strategi 1: Meningkatkan keupayaan dan pengusaan ilmu pengetahuan Strategi 2: Meningkatkan tahap kemahiran teknikal & vokasional Strategi 3: Memperkukuh keupayaan R&D, sains & inovasi Strategi 4: Memupuk masyarakat berbudaya dan memiliki kekuatan moral Strategi 5: Meningkatkan akses kepada pendidikan dan latihan berkualiti di semua peringkat

Example of goals statement : 

Example of goals statement

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Leadership System: M,V,GP, SG, OS 8. Customer & Stakeholder Satisfaction

INPUTOrganizations require a variety of resources called inputs to perform work in order to create products and services. : 

INPUTOrganizations require a variety of resources called inputs to perform work in order to create products and services. 1. Human Resources 2. Financial 3. Equipment and Supplies 4. Physical Facilities 5. Information 6. Energy (Refer to Exhibit 2.3: Miller, 2007)

Key Work Process : 

Key Work Process KWP describes how work is performed in an organization. People and machines perform tasks and activities called “work” to create products, services, and information. Work in most organization is organized into four to eight major processes central to the organization’s mission. Refer to exhibit 2.5.

Outputs & Outcomes : 

Outputs & Outcomes Refer to Exhibit 2.7 for an examples of output for an academic department. Its can be in the form of products, services, and information that s created through tasks and activities in key work processes and received or experienced by customers. It is important to distinguish Output from Outcomes? Output: are created by work (tasks and activities in the work processes) Outcomes are intended results the organization seeks as a result of customers’ receiving output (courses) that lead to intended outcomes (students learning) as a results of customers’ (students’) engaging in or receiving outputs (courses) Please refer to Exhibit 2.9 for examples of intended outcomes.

Group Activities : 

Group Activities Using examples provided (for higher education institution), Please identify internal system elements of your organizations which performance you intend to measure. 30 min- discussion 1 hour – presentation (whole group)

Take 5! : 

Take 5!

Developing KPI : 

Developing KPI

The Measurement Pyramid : 

The Measurement Pyramid Strategic Goals/Objectives End-Outcomes Longer-Term Intermediate Outcomes Shorter-Term Intermediate Outcomes & Outputs Outputs & Inputs

Data Collection : 

Data Collection 1. Data Credibility 2. Data Collection Methods 3. Data Presentation

Generating Performance Measures then Objectives : 

Generating Performance Measures then Objectives Goal: To provide timely response to undergraduate applicants Objective 1: to increase the productivity of the file managers by 10% PM: Average number of applications processed per file manager per day Objective 2: To reduce the application processing time to less than 14 days for 95% of applications PM: Number of days to process each application

Performance Measures : 

Indicator type Performance Measures Outcome Output Process Input What is the impact of this service? Is the project achieving its objectives? What level of service is being provided? How many units of service are being delivered? Is what needs to be done being done? Are we on track to meet targets? What resource are used to deliver the service? Question

Categories of Performance Measures : 

Categories of Performance Measures Input measures (e.g., staff time, materials, equipment, resources) are useful in showing resources or effort used to provide services; however does not show effectiveness You may be a spending a lot of effort doing the wrong things Output measures (e.g., number of products produced or services provided) are useful in defining program or service; however, does not reveal quality or efficiency You may be producing or providing a lot of the wrong things inefficiently or with poor quality

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Outcome measures (e.g., score on standardized test, distance from proposed targets) are useful in showing the impact or benefit of the program or service Efficiency measures (e.g., cost per unit of output, outputs per unit of input, outputs per unit time) are useful in showing productivity and cost effectiveness Quality measures (e.g., reliability, accuracy, courtesy, competence, responsiveness) are useful in measuring the effectiveness in meeting customer expectations Lack of quality can be measured (e.g., error rates)

Example Goal: To provide timely response to undergraduate applicants : 

Example Goal: To provide timely response to undergraduate applicants Input measure: The number of file managers Output measure: The average number of applications processed per day Outcome measure: The application processing time for applications based on the time from receipt of an application in the Admissions Mail room to the key-in of the admission decision as recorded in PeopleSoft Efficiency measure: The average number of applications processed per file manager per day Quality measure: The satisfaction of applicants with the application processing time as measured by a survey

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Performance indicators are measures that describe how well a program is achieving its objectives. What are performance indicators? Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organisation. They will differ depending on the organisation

The terms “KPI” originates from three different words: Key, Performance, and Indicators. : 

The terms “KPI” originates from three different words: Key, Performance, and Indicators. These terms can be described in the manner that the KPI should be seen as only Key when it is of fundamental importance in gaining competitive advantage and is a make or break component in the success or failure of an organization; only relating to Performance when it can be clearly measured, quantified and easily influenced by the organization; and only an Indicator if it provides leading information on future performance.

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Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organisation define and measure progress toward organisational goals. Once an organisation has analysed 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

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Performance indicators are at the heart of a performance monitoring system – they define the data to be collected to measure progress and enable actual results achieved over time to be compared with planned results. Why are performance indicators important?

Why use KPIs? : 

Why use KPIs? Helps us to know whether we are succeeding in our mission. They are an important management tool for tracking progress against strategic goals. Working with KPIs encourages system thinking. In most systems 85% of problems can usually be attributed to the system and 155 to the individual (Juran). KPIs direct and prioritize behavior towards achievement of the vision, goals and objectives.

PRINSIP-PRINSIP ASAS (sambung) : 

PRINSIP-PRINSIP ASAS (sambung) Sasaran Prestasi boleh disediakan dalam bentuk: Ratio (Jumlah output rosak:jumlah output) Rating (CGPA 3 keatas) Ranking (Top 10, Best in the World) Peratus ( Peningkatan hasil sebanyak 20% bagi tahun 2006) Angka (Absolute Numbers) 6

4 Basic Categories of KPI : 

4 Basic Categories of KPI 1. Inputs: KPI to measure the resources that an organization uses to produce goods or services, including human, financial, facility, or material resources (e.g., number of Ringgits expended) 2. Output Measures: KPI to count the services & goods produced by an organization. The number of people receiving a service or the number of services delivered are often as measures of output. 3. Efficiency Measures: KPI that measures the cost, unit cost, or productivity associated with a given outcome or output. 4. Outcomes Measures: KPI to assess the actual impact of an organization’s actions. An outcome measures is a means for quantified comparison between the actual result the intended result.

Lag & Lead Indicators : 

Lag & Lead Indicators Performance Measures (Lagging): Indicators of success. The final results (e.g., no. or % of students success in national exam) Performance Measures (Leading): Predictors (performance drivers) of future success (e.g., % of increase in teachers knowledge and skills) (source: Balanced Scorecard Institute, USA. 2005)

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Clarify the results statements Develop a list of possible indicators Assess each possible indicator Select the “Best” performance indicator Steps in selecting performance indicators

Ten Characteristics of a Good KPIBy Wayne Eckerson, Director of Research, TDWI : 

Ten Characteristics of a Good KPIBy Wayne Eckerson, Director of Research, TDWI #1. KPIs Reflect Strategic Value DriversKPIs reflect and measure key drivers of business value. Value drivers represent activities that, when executed properly, guarantee future success. Value drivers move the organization in the right direction to achieve its stated financial and organizational goals. Examples of value drivers might be “high customer satisfaction” or “excellent product quality.” In most cases, KPIs are not financial metrics. Rather, KPIs reflect how well the organization is doing in areas that most impact financial measures valued by shareholders, such as profitability and revenues. As such KPIs are “leading” not “lagging” indicators of financial performance. In contrast, most financial metrics (especially those found in monthly or annual reports) are lagging indicators of performance.

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2. KPIs Are Defined by “Top Management” Top management must define value drivers in planning sessions which determine the short- and long-term strategic direction of the organization. To get the most from these value drivers, executives need to define how they want to measure their organizations’ performance against these drivers. Unfortunately, too many top management quit strategic planning sessions before they define and validate these measurements, otherwise known as KPIs. The results are predictable, giving proof to the adage, “You can’t manage what you don’t measure.”

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3. KPIs Cascade throughout an Organization All KPIs are based on and tied to the overarching corporate strategy and value drivers. In this way, top-level KPIs cascade throughout an organization, and the data captured by lower-level KPIs roll up to corporate wide KPIs. This linkage among all KPIs, which can be modeled using strategy mapping and reporting at any level of of the organization.

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4. KPIs Are Based on Corporate Standards The only way cascading KPIs work is if an organization has established standard measurements. Only with enough top management support can organizations overcome the political obstacles associated with standardizing definitions for commonly used KPIs.

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5. KPIs Are Based on Valid Data Before finalize a KPI, they need to ask a technical analyst if the data exists to calculate the metric and whether it’s accurate enough to deliver valid results. Often, the answer is no! In that case, it need either to allocate funds to capture new data or clean existing dirty data. Or they need to revise the KPI.

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6. KPIs Must Be Easy to Comprehend One problem with most KPIs is that there are too many of them. As a result, they lose their power to grab the attention of employees and modify behavior. According to TDWI research, the median number of KPIs that organizations deploy per user is seven. More KPIs than this makes it difficult for employees to peruse them all and take requisite action. In addition, KPIs must be understandable. Employees must know what’s being measured, how it’s being calculated, and, more importantly, what they should do (and shouldn’t do) to positively affect the KPI. This means it is not enough to simply publish a scorecard; you must train individuals whose performance is being tracked and follow up with regular reviews to ensure they understand and are acting accordingly. As one IT manager said, “Measurements without meetings is useless.”

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7 KPIs Are Always Relevant To ensure that KPIs continually boost performance, you need to periodically audit the KPIs to determine usage and relevance. If a KPI isn’t being looked at, it should probably be discarded or rewritten. In most cases, KPIs have a natural lifecycle. When first introduced, the KPI energizes the workforce and performance improves. Over time, KPIs lose their impact and should probably be revised. Most organizations review and revise KPIs quarterly

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8. KPIs Provide Context Metrics always show a number that reflects performance. But a KPI puts that performance in context. It evaluates the performance according to expectations. The context is provided using 1) thresholds (i.e. upper and lower ranges of acceptable performance), or 2) targets (i.e. predefined gains, such as 10% new customers per quarter), or 3) benchmarks, which can be based on industrywide measures or various methodologies, such as Six Sigma. In addition, most KPIs indicate the direction of the performance, either “up,” “down,” or “static.”

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9. KPIs Empower Users To be effective, KPIs must be reinforced with incentives. Almost 40 percent of organizations surveyed by TDWI say they restructured incentives systems when implementing KPIs. However, it’s important not to link incentives to KPIs until the KPIs have been fully vetted. The business process needs to empower users to take the appropriate action in response to KPIs. The last thing you want is informed but powerless users. That’s a recipe for disillusionment and poor morale. Forty percent of organizations said they modified business processes when implementing KPIs, according to TDWI research.

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10. KPIs Lead to Positive Action Finally, KPIs should generate the intended action—improved performance. Unfortunately, many organizations allow groups to create KPIs in isolation. This leads to KPIs that undermine each other. For example, a KPI for a retail store might track stock outs (when it lacks enough merchandise on hand to meet demand) but the regional warehouse has an incentive to carry minimal inventory. If the regional warehouse does too good a job, it may not have enough inventory to keep the retail shelves stocked when there is a surge in demand for certain merchandise. Another problem is human nature. People will always try to circumvent KPIs and find loopholes to minimize their effort and maximize their performance and rewards. Good KPIs are vetted before deployed and closely monitored to ensure they engender the intended consequences.

Link KPI with target & Initiatives : 

Link KPI with target & Initiatives Target: Desired level of performance for a performance measure (e.g., % of customer satisfaction target = 95%) Initiatives: Action programs that will achieve our performance goals (e.g., license renewals via Internet) (source: Balanced Scorecard Institute, USA. 2005)

The most useful targets don’t come out of thin air : 

The most useful targets don’t come out of thin air

Slide 114: 

Tips (Stacey Barr,2006) When you are setting a target, involve the people that will participate in achieving it. It more motivating if you set a series of staged targets that give you more managable milestones to achieve which collectively work up to the ultimate target. If you are writing goals or objective statements, a good recipe is: the strategic direction + KPI + target + timeframe.

Slide 115: 

Potential areas to consider when setting targets: 1. TOV or Baselines and trends 2. National, state, local or Education Standards. 3. Benchmarking 4. Feedback from customers and stakeholders

Tip (target) : 

Tip (target)

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Group Work- Developing KPI : School State/ District Education Dept’. Please Refer to Supplement Notes: Miller (2007) form page 10-30 for example and Fulton County Schools.

Contoh Perhubungan: Isu strategik,Matlamat Strategik, Objektif, KPI dan Sasaran Prestasi. : 

Contoh Perhubungan: Isu strategik,Matlamat Strategik, Objektif, KPI dan Sasaran Prestasi.

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ISU STRATEGIK, MATLAMAT STRATEGIK, KPI, OBJEKTIF & SASARAN

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LAIN-LAIN CONTOH KPI DAN SASARAN PRESTASI PERINGKAT TAKTIK/PELAN TINDAKAN ‘CASCADING’

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CONTOH: INSTITUT PENGAJIAN TINGGI Proses Utama I: Pengajaran dan Pembelajaran Perkhidmatan: Pengurusan Pengajaran dan Pembelajaran

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Proses Utama II: Penyelidikan, Penerbitan dan Inovasi Perkhidmatan: Menguruskan penyelidikan, penerbitan dan inovasi

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Proses Utama III: Perundingan Perkhidmatan: Memberi Khidmat Perundingan

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CONTOH: AGENSI PERUNDINGAN Proses Utama: Pemodenan Pentadbiran Perkhidmatan: Menjalankan Kajian Perundingan Pengurusan

Initiatives: : 

Initiatives: Action programs that will achieve our performance goals (e.g., license renewals via Internet) (source: Balanced Scorecard Institute, USA. 2005) Business strategy. Specific programs, activities, projects or actions you will engage in to help ensure you meet or exceed your performance targets.

Dua Faktor Penentu Pemilihan Inisiatif/Strategi : 

Dua Faktor Penentu Pemilihan Inisiatif/Strategi FAKTOR KOMUNITI SOSIAL, POLITIK, PERUNDANGAN PELUANG & CABARAN TERHADAP ORGANISASI KEKUATAN SUMBER, KEMAMPUAN DAN KELEMAHAN NILAI DAN BUDAYA ORGANISASI YANG DIKONGSI PERANAN STAF PENTING PERSEKITARAN STRATEGIK ORGANISASI TENTUKAN KERELEVANAN FAKTOR LUAR & DALAM KENAL PASTI & NILAIKAN ALTERNATIF JANAKAN STRATEGI PERSAINGAN DAN PERANAN STAKEHOLDER FAKTOR LUARAN FAKTOR DALAMAN

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THE TOWS MATRIX(GENERATION OF STRATEGIC OPTIONS) STRENGTHS 1. 2. LIST STRENGTHS 3. 4, 5. 6. INTERNAL ENVIRONMENT WEAKNESSES 1. 2. LIST WEAKNESSES 3. 4. 5. 6. OPPORTUNITIES 1. 2. LIST OPPORTUNITIES 3. 4. 5. 6. S-O STRATEGIES PENETRATION EXPANSION INTENSIFICATION ACQUISITION INTEGRATION OF BACKWARD AND FORWARD LINKAGES W-O STRATEGIES NICHE LINKAGING OR NETWORKING SUB-CONTRACTING ANCHORING ORGANIZATION DEVELOPMENT/CAPABILITY BUILDING THREATS 1. 2. LIST THREATS 3. 4, 5. 6. S-T STRATEGIES DIVERSIFICATION CONSOLIDATION CONTINGENCY MECHANISMS W-T STRATEGIES RETRENCH MERGE WITHDRAW CLOSE SHOP STATUS QUO EXTERNAL ENVIRONMENT

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Cascading kpi

Cascading Scorecards Support Strategy : 

Mission Vision Strategy Cascading Scorecards Support Strategy

Pelan Tindakan (Pelan Taktikal) : 

Pelan Tindakan (Pelan Taktikal) Setiap strategi perlu menjelaskan bagaimanakah cara untuk melakukannya yang di kenali sebagai pelan tindakan atau pelan taktikal. Setiap strategi perlu mempunyai sekurang-kurangnya SATU pelan taktikal Pelan taktikal adalah bersifat langkah yang khusus tindakan pada tempoh masa yang pendek iaitu tahun semasa ( 1-2 tahun) Pelaksanaan pelan taktikal perlu melalui proses yang detail/terperinci yang dikenali sebagai Pelan Operasi. Dalam sistem kualiti MS ISO 9000 sebagai prosedur kerja dan arahan kerja Ada proses pelaksanaan yang perlu mengambil kira pelan kontingensi (sebagai langkah pencegahan).

Ciri-Ciri Pelan Tindakan Yang Baik : 

Ciri-Ciri Pelan Tindakan Yang Baik Menyatakan aktiviti-aktiviti (tindakan atau program/projek) Individu yang bertanggungjawab? Tempoh masa pelaksanaan Indikator pengukuran prestasi dan output Sumber yang diperlukan

Slide 139: 

Adalah lebih baik disertakan bersama pada setiap helaian jadual perkara seperti: 1. Strategi 2. Matlamat Strategik atau objektif (bagi memperlihatkan hubungannya) 3. Elemen dalam Visi dan Misi. Tip: Pastikan setiap tindakan/aktiviti dihubungkait sekurang-kurangnya satu strategi.

Linking the BSC with Budget and Operations : 

Linking the BSC with Budget and Operations Planning Management Adapted from: Balanced Scorecard Collaborative

Slide 141: 

Slides Bacaan Tambahan

Slide 142: 

BORANG PENGUKURAN PRESTASI DAN MAKLUM BALAS MATLAMAT:

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Sample Performance Report

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Tracking of KPIs and exploring tracking mechanisms What performance measures won’t tell you? Cultural obstacles/barriers to performance management of public sector Dealing with resistance to performance measurement Major pitfalls of measurement systems Implementation tips Implementation Issues

Slide 146: 

Make a commitment to measure performance and get started. Although several participants emphasized this, one stated it best, "You just need to start and don't expect it to be perfect." Treat performance measurement as an ongoing process. Performance measurement is an iterative process that progresses but has no end. An organization's commitment to performance measurement is a tacit agreement to continually build, change, and improve. Tailor the process to your organization. An organization must develop performance measures that complement its culture size, mission, vision, organizational level, and management structure as well as its goals and objectives. Implementation Tips

Slide 147: 

LANGKAH-LANGKAH MEWUJUDKAN KPI DAN MELAKSANAKAN PENGUKURAN PRESTASI Ukur dan Nilai Prestasi Pantau Tahap Prestasi Tambah Baik Prestasi Penambahbaikan Berterusan Tahap Prestasi Masa Langkah 1 Langkah 4 Langkah 3 Langkah 2 Wujudkan KPI dan Tetapkan Sasaran Prestasi

Slide 148: 

LANGKAH 4: MENAMBAH BAIK PRESTASI Tindakan seterusnya: Mengulangi langkah 2 hingga 4 secara berterusan Mengkaji semula secara menyeluruh kesesuaian dan keberkesanan perkhidmatan Melaksanakan penambahbaikan yang diputuskan oleh Pasukan Petugas Bagi Mengurangkan Karenah Birokrasi Melaporkan status pelaksanaan penambahbaikan kepada Pasukan Petugas Bagi Mengurangkan Karenah Birokrasi setiap tiga bulan sekali Ketua agensi perlu:

10 Reasons Why KPI Systems Do Not Succeed in Public Sectors : 

10 Reasons Why KPI Systems Do Not Succeed in Public Sectors Staff believe top management imposes a system under political pressure or merely because it is the managerial fashion to have one. The real purpose of the organization escapes definition. The staff who have to contribute indicators cannot see their relevance to their working life. Too many, too complicated, too incomprehensible. What is measured is not necessarily important, only measurable. Managers do not use the indicators to improve work, only compile them. Staff forget about them, until it is time for the annual returns. The available data is not reliable, or not sufficient, or too expensive to collect. The results are disappointing, and are suppressed. The KPI system is treated as an end in itself, not as means to an end.

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Budaya kerja yang berasaskan prestasi perlu diamalkan secara menyeluruh. Budaya ini perlu diterapkan pada semua peringkat Perkhidmatan Awam. PENUTUP Semua agensi di peringkat Persekutuan, Negeri, Daerah dan Pihak Berkuasa Kerajaan Tempatan hendaklah mengambil langkah bagi mewujudkan KPI, menetapkan sasaran prestasi bagi setiap KPI dan melaksanakan pengukuran prestasi untuk mengetahui tahap prestasi agensi.