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The Seven Steps of Performance Measures

Performance Measures is the seventh attribute (the seventh step) of Excellent Management (Phase 1).

This is a Free Service for those Interested in Excellent Management.  This site is always under construction.   

Prepared by Craig A. Stevens, PMP, CC and his Students and Other Professionals

 

The Number One Enemy of Good Quality (or productivity) Are the Words “I Think” and “I Know."  That is making decisions based on something other than data and fact.

Based on the works of Dr. Jerry Westbrook

 

The following information is a summary of the Seven Steps to performance measures developed By Craig Stevens in the early 1990's.  The Seven Steps to Performance Measures is Element 7 of the Mobile of Excellent Management.  Click on the "Up" button to see the Mobile of Excellent Management.

 

FOR A FREE GERONIMO STONE eBOOK on the Seven Attributes of Excellent Management go to www.geronimostone.com

 

 

 

 

 

 

 

Two Types of Performance Measures

  1. Performance Measures of Programs, Projects, and Operations are changing.  Organizations are moving to a more complete form of performance measures.  Accounting performance measures are not the only performance measures that count.  The government started this process under the first Clinton Administration and we were involved in the Department of Energy's first efforts of understand and implement this process of using performance measures.

  1. Performance Manages for People are changing. Organizations are moving away from the long-established one-on-one appraisal or performance review with a boss once per year. They are designing performance management systems that provide an individual with more frequent feedback from many points of view including peers, direct reporting staff members, and the boss. The process, known as 360-degree feedback, provides a more balanced set of observations for the employee.

 

 

 

STEP 1, Know the Principles and Objectives

 

 

 

YouTube Video PerfM1 - The Laws of Performance Measures.

 

 

Know Why You Measure Performance!

"You cannot manage what you cannot measure."

Tuttle, T.C.; "Strategic Performance Measurement", Conference Proceedings: Sixth Annual National Conference on Federal Quality, Federal Quality Institute, President's Council on Management Improvement, American Society for Quality Control, Association for Quality and Participation, and Quality & Productivity Management Association, 1993, pp. 537-545.

"To understand and improve P&Q, it must be measured. Measurements of both efficiency and effectiveness must be done to make decisions concerning problems with the service organization."

Stanleigh, M.; "Accounting for Quality", CA Magazine, Volume 125, October 1992, pp. 40-42.

Know Some of the Benefits of Performance Measures

  1. Enhance Ability to Recognize and Reward Extraordinary Individual Performance 

  2. Enhanced Capacity for Individual Cooperation 

  3. Satisfied Customers 

  4. Effective and Satisfied Employees 

  5. Continuous Process Improvement 

  6. Increased Profits 

  7. Enhanced Reputation 

  8. Innovation 

  9. Effective Management

Know the Measuring Principles and Objectives

"What make sports or work fun?  Everyone Knows The Rules and Everyone Knows the Score."

                    Victor Dingus of Tennessee Eastman in 1990

"Measure what is important. Concentrate on the main strategic priorities. 

 Several things may be important so a "family of measures" will allow different, even conflicting objectives to be considered."

Thor, C.G., "Performance Measurement in a Research Organization," Productivity and Quality Management Frontiers -III, edited by Sumanth, Edosomwan, Sink, and Werther. 1991 Institute of Industrial Engineers.

"A system of measures must be used to avoid sub-optimization of elements."

Salemme, T.; "Establishing Metrics for Service Based Work", Conference Proceedings: Sixth Annual National Conference on Federal Quality, Federal Quality Institute, President's Council on Management Improvement, American Society for Quality Control, Association for Quality and Participation, and Quality & Productivity Management Association, 1993, pp. 528-536.

"Measures are useless if the results are not used as feedback to someone."

Thor, C.G., "Performance Measurement in a Research Organization," Productivity and Quality Management Frontiers -III, edited by Sumanth, Edosomwan, Sink, and Werther. 1991 Institute of Industrial Engineers.

"Simple, usable metrics, must be developed."

Shycoff, D.B.; Key Criteria for Performance Measurement, Comptroller of the Department of Defense, Directorate for Business Management, 1992.

"You have to measure things that are basic. If it's not simple, not easily understood, nor easily tracked, then don't bother measuring it because nobody will ever use it."

Gould, L.; "Measuring Business Reengineering is Part of Its Success", Managing Automation, May 1993, pp. 45-47.

Know Some of the Performance Measurement Problems to Avoid

  1. Using superfluous data to continue improvement does not work. 

  2. Avoid the problems of parameters not selected being viewed as unimportant. 

  3. Avoid the misconception that everything must be measured. 

  4. Avoid the easily measurable syndrome, measuring easy not what is important. 

  5. Avoid focusing on the measurements and not processes. 

  6. Avoid the discredited if not sophisticated syndrome.

  7. Avoid redundant or elaborate systems that can erode respect for your system.

  8. Avoid not involving everyone.  This can cause resistance.

  9. You can not use measures to punish people and expect it to work.  People will naturally hide bad news.

Step 2: Understand Organizational Goals

The starting point of measurement is a set of clear organizational goals.  Make sure the system ensures what you want done. Connect Everything to Goals.

 

"The principle purpose of performance measures is to gauge progress against stated program goals and objectives, presupposing that the strategic program objectives are known."

Shycoff, D.B.; Key Criteria for Performance Measurement, Comptroller of the Department of Defense, Directorate for Business Management, 1992.

"Find the system and ask if it is doing what it is suppose to do. When improving customer relations, measuring the amount of desk time will likely work against the amount of time spent with the customer."

Peter M. Senge, The Fifth Discipline, The Art & Practice of The Learning Organization, Currency Doubleday, 1994

 

 

 

YouTube Video PerfM2 - More Steps of Performance Measures.

 

 

 

Step 3: Select and Weigh The Criteria

Keep the END in Mind. What are the important Criteria related to the Goals? Think first about "Effectiveness" (Doing the Right Things), and second about "Efficiency" (Doing Things the Right Way).

 

Getting a Report out quicker -- is only efficiency.

Example of Goal: Improve or Maintain Customer Satisfaction (both internal and external).

Example of Criteria: Improve Quality, Cost, and Speed.

Go to this link to see a selection tool for weighing criteria.

For the workshop attendees: Remember Craig's story about the first  attempts at Performance Measures by the U.S. DOE.

Step 4: Select the Performance Indicators

  1. Look at one Criteria at a time, 

  2. List Potential Indicators, 

  3. Screen the Indicators, 

  4. Rate the Indicators, and 

  5. Start with the Highest.

 

Step 5: Collect Data

You will collect both Quantitative (Numbers) and Qualitative (Non-numbers) Data.  More information will be added here later.  

 

For a link to websites where you can find statistical data go here... http://www.westbrookstevens.com/links_to_others.htm   

Step 6: Process and Analyze

One way to process data is with statistics...See Link for Statistical Analysis Tools

Step 7: Use the Information

"Begin with a reasonable set of metrics and refine them as data is collected and experience is gained; do not insist on the "perfect" set of metrics at first."

Salemme, T.; "Establishing Metrics for Service Based Work", Conference Proceedings: Sixth Annual National Conference on Federal Quality, Federal Quality Institute, President's Council on Management Improvement, American Society for Quality Control, Association for Quality and Participation, and Quality & Productivity Management Association, 1993, pp. 528-536.

 

 

 MBO, 360 Performance Appraisals, and the Deming Management Method

 

(Deborah Irons, TNU 4430, 2008)

 

 

Business success depends on several key elements including willing workers and leaders who coach and energize.  To produce results, these two elements are essential.  However, management methods and performance appraisals have long led to disgruntled employees and frustrated leaders.  This article looks at Management by Objectives (MBO) and compares it with 360 Performance Appraisal utilizing knowledge attained from the Deming Management Method.

 

Performance appraisals provide a comprehensive assessment of a worker’s employment activities for a predetermined interval.  These assessments often tie employee performance to expected outcomes for the organization.  Performance problems are determined solely by the manager or jointly with the employee and developmental strategies designed to resolve these problems.  Several forms of performance appraisals exist.  The two discussed here are Management by Objectives and 360 Performance Appraisals.

 

Management by objectives is a process by which the goals and objectives of an organization link with the performance appraisal in quantifiable terms.  First outlined by Peter Drucker in the early 1950’s, MBO fundamentally allows for the identification of common goals by managers, the outlining of goals for each individual, and the utilization of measures to assess each member’s performance. [1]  The MBO Cycle begins with a review of organizational goals and objectives. Through managerial and employee participation, employee objectives are established. Throughout the cycle, progress is monitored, goals eliminated and incorporated, and feedback given in relationship to established aspirations.  At predetermined intervals, managers perform progress evaluation, often with rewards for goal completion.  The cycle continues with shared revision of goals.

 

The model of the 360 Performance Appraisals solicits performance feedback from several sources instead of just management, thus the name (360 degrees).  These viewpoints may include customers, peers, or anyone who interacts with the employee.  These perspectives of employee performance provide employees and management with performance improvement goals.  ”Most results for an employee will include a comparison of their ratings to the ratings of their supervisor and average of the ratings from others.”[2]  Problems may arise when sources of the feedback have no knowledge of job description or performance plan.  At this point, a comparison is made of these two types of appraisals utilizing the Deming Management Method. Dr. W. Edwards Deming offered this method as a tool to improve industry.  It provides “Points” to enhance management activities and “Seven Deadly Diseases” which may be fatal to an organization.  This article will incorporate several of these to evaluate the MBO and the 360 Performance Appraisals.

 

Dr. Deming’s first point is “creating constancy of purpose for improvement of product and service.”[3]  Deming communicated that a company must invest today for the future.  The MBO provides for this constancy of purpose through the goals proposed for employees.  This approach also provides for the goals and objectives of the organization.  The 360 provides a broad view of the employee including their performance, training needs, and customer satisfaction skills. Both methods of appraisal appear to support this point.

 

Point Five of the Deming Management Method is to “improve constantly and forever the system of production and service.”[4]  This point provides for teamwork, customer satisfaction, and problem solving.  The MBO may be better suited for teamwork as it provides an effective way to maintain employee motivation, support, and all-around goal setting.  Though not always the case, the 360 may decrease team building effectiveness due to the confidential input by peers.  Both types of appraisal promote customer satisfaction though it is more obvious in the 360.  Where the MBO supports self-proposed goals increasing problem-solving skills, the 360 does not.  This, however, may be a need considered for further training by the 360.

 

Dr. Deming’s sixth point is “institute leadership.”[5]  According to Deming, many supervisors hired have no knowledge of how to supervise.  Whichever form of appraisal utilized, leadership is essential.  In the MBO, accomplishing objectives cannot happen without proper leadership.  Moreover, how will a manager with no knowledge of the job complete the 360-performance evaluation?  The depiction of performance objectives may not be logical and employees have very little participation in deciding these objectives.  Without excellent leadership skills, neither of these appraisals will be highly regarded.  “Dysfunction in one area will affect other areas. Ultimately, the organizational culture suffers which affects teams and stifles excellence.”[6]

 

After comparing these appraisal processes with the Deming Management Method, be aware that Dr. Deming considers “evaluation of performance, merit rating, or annual review” as one of his “Seven Deadly Diseases.”[7]  According to Dr. Deming, performance appraisals discourage “long-term planning” and “increase reliance on numbers.”[8] He believes this sort of evaluation leaves employees competing with, instead of working with other team members. “The greatest accomplishments of man, Dr. Deming says, have been accomplished without competition.”[9] 

 

Whatever the type of appraisal utilized, good managers keep goals in mind while taking responsibility for performance planning and coaching.  They provide ongoing evaluations verified through day-to-day feedback.  There should be no ground shaking observations made during the performance review.  With MBO, an employee’s readiness to participation in goal setting requires careful assessment.  Some employees may need a more structured review.  With the 360, more standardization may be necessary. Perhaps, Dr. Deming was correct about performance appraisals.  When not used correctly they can be “Deadly Diseases.” 

 

Citations


 

[1]Hersey, Paul, Kenneth H. Blanchard, and Dewey E. Johnson. Management of Organizational Behavior. New Jersey: Prentice Hall. 8th ed. 2001. 139.

[2]“360 Performance Appraisal.” http://www.citehr.com/viewtopic.php?t=10.

 

[3] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 34.

 

[4] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 66.

 

[5] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 70.

 

[6] Steincamp, Donna, and Eileen Tremblay. “Evaluating Performance Evaluations.”  

   http://www.westbrookstevens.com/performance_measures.htm.

 

[7] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 90.

 

[8] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 91.

 

[9] Walton, Mary. The Deming Management Method. New York, New York: Berkley Publishing Group. 1986. 91.

 

 

 

EVALUATING PERFORMANCE EVALUATIONS

By Donna Steinkamp and Eileen Tremblay (TNU 2005)

The idea of performance evaluations often sends shudders through supervisors and workers alike.  Just mention the subject and you will hear a chorus of groans.  As a result, evaluations take low priority until a call comes from the Human Resources Department.  Worse yet is when an employee calls or walks in your office and says, “I just want to remind you that my evaluation was due a month ago.” 

 

 Should you care whether your performance review process is working or not?   Yes.  Here is why.  If administered properly, the entire performance evaluation system can act like an organization's backbone, tying company goals to employee performance. Performance evaluation systems connect with almost every facet of an organization. Organization guru Craig Stevens' model for excellent management helps to illustrate this connection. 

 

 

 

The performance evaluation system positively affects every component of the excellent management model. It allows Leadership to establish a rational framework for tying employee performance to organizational goals. The constructive environment infuses the organization culture. Teams thrive because excellent employee performance = excellent team performance = excellent organizational performance. Problem Solving improves because employees focus on what is important in their job and to the organization. The organization engages in Continuous Improvement because performance evaluations promote quality and help to identify training and development needs. The ability to meet organizational goals enhances performance measures. In short, good performance evaluation systems help management achieve excellence.

 

How does setting goals for performance evaluation relate to organizational objectives? The old saying goes "You cannot manage what you cannot measure." Setting organizational objectives is like drawing a blueprint. Employee performance goals are the individual systems that make up and support the plan. Employee performance becomes a function of continuous improvement.

 

How can an organization create an environment conducive to a positive performance evaluation process? It is a function of team building, requiring support and commitment at all levels. The leadership must create a culture that is accepting of the performance evaluation system. This establishes the commitment level from the lowest to highest levels. It requires continuous communication, vertically and horizontally throughout. The feedback from manager to employee and vice versa must be honest, productive, and open. In this environment, success can become inevitable. The organization lives the mantra: Effectiveness is doing the right thing and efficiency is doing it the right way.

 

The other side to the positive performance evaluation experience is the wholly ineffective system. A poorly designed or implemented system can be as unproductive as having no system at all. It starts with unclear standards and poorly defined responsibilities. Leadership loses its focus and commitment to the process. Employees fail to meet goals, which ripple through to the organization's objectives. Employee morale drops and management loses trust and respect. Dysfunction in one area will affect other areas. Ultimately, the organizational culture suffers which affects teams and stifles excellence.

 

In the ineffective system, employees view performance evaluations as an annual event linked to an expected sum of money. Performance evaluations can and should be much more than an exercise linked to compensation. More than 50 years ago behavioral scientist Frederic Herzberg said, “If you want people to do a good job, give them a good job to do.” Herzberg found that achievement and recognition are motivators (Hersey, Blanchard, Johnson). Pay becomes an issue only when it is inadequate.  A positive performance evaluation will focus on improving performance and helping employees develop their maximum potential.

 

Many an organization has seen good, valuable employees pick up their belongings and make for the rumored greener pastures of some other organization.  While salary and benefits may have much to do with these employee migrations, there are plenty of losses directly attributed to failing to help employees develop their performance.  Smart, healthy, progressive companies do everything they can to give managers and employees a comfort level with the evaluation process.  They emphasize that performance evaluations are a part of an on-going work process and not just an annual event.  

 

 Keeping the people who keep you in business:

 

Checklist of targeting employee retention through

the performance management system

 

ü      Both employee and manager participate in appraisals, working together to set goals.

 

ü      Give employees the resources to excel – knowledge is power.  Training employees improves their skills and performance, and sends the message that employees are valued. 

 

ü      Seek performance feedback through a more balanced set of observations, i.e. 360-degree feedback, upward appraisals.

 

ü      Train both the employees and managers on performance evaluation criteria, competencies, and appraisal format. Often managers, particularly new to the management arena, do not have the necessary skills.

 

ü      Train employees through experience, understanding, and encouragement. It is an effective way to maintain employee motivation, alignment, and goal setting.

 

ü      Give everyone a voice.  Employees who know their ideas and work are valued will push their own abilities beyond their comfort zone and display creativity and innovation.  Most employees will embrace the opportunity to reach for higher goals, especially if they have a say in setting the goals.

 

ü      Encourage collaboration, but give employees “ownership” of the project. 

 

ü      Set clear performance standards.  Identify those standards for a particular job and be specific about the outcomes that characterize outstanding (as well as unacceptable) performance.

 

ü      Identify performance barriers.  Start with performance, looking in turn at behavior, system variables, and individual variables.

 

ü      Define responsibilities clearly.  When employees know their roles, it reduces confusion and gives them a better sense of how to meet their objectives.

 

ü      Create an environment that encourages employees to respect one another.  Never criticize an employee in front of others; offer corrective feedback only in private.

 

ü      Recognize and reward results.  Money does not always have to be a motivator.

 

ü      Always expect the best from employees. 

 

ü      Maintain ongoing communication and feedback.  Continuous feedback includes reinforcing an employee who exhibits what the organization believes will help it achieve business goals.  Foster a culture with communication and feedback integrated into the day-to-day work.

 

ü      Encourage the spirit of play.  Play is vital to creativity and innovation and many people need this kind of stimulus to keep the mental gears turning.

 

Ultimately, performance evaluation is just one component of the overall strategy for assessing performance in an organization.  Performance management is directly linked to every area of an organization, all of which need to be included to add value to the organization.  The competition to attract and retain quality staff is only going to increase. Having an effective performance evaluation system, that recognizes employees, as the most valuable resource of an organization, can be a powerful weapon in your arsenal. 

 

Works Cited 

 

Westbrook Stevens, LLC.  The Linked Management Models “Building a Foundation with the Seven Attributes of Excellent Management.”  August 2, 2005. http://www.westbrookstevens.com/step_1.htm

 

Hersey, Paul, Kenneth H. Blanchard, Dewey E. Johnson, Management of Organizational Behavior: Leading Human Resources. New Jersey: Prentice-Hall, Inc., 2001. 

 

     Management by Objectives (MBO)

 

     Although viewed by many as risky, leaders use MBO to integrate the goals and objectives of an organization to all individuals.  This concept, designed by Peter Drucker, begins when senior and junior managers identify common goals together, define each individual or department’s responsibility, and measures results by the guidelines initially designed by the managers.  Before managers form any objectives, they must clarify all of the common goals with those involved.  Furthermore, those responsible must periodically compare progress with the actual goals.  Organizations, regardless of size, practice this concept on many different levels and achieve successful outcomes.  Unfortunately, other organizations find this concept unsuccessful.  When considering this route of leadership/Performance Measurements, managers should carefully monitor goals and provide employees with the necessary resources to meet their objectives and provide input (Hersey 139).                                                                                

Eric Dunford (TNU 2006) 

 

Paul Hersey and Kenneth H. Blanchard, Management of Organizational Behavior: Leading Human Resources 8th Ed. Upper Saddle River: Prentice Hall, 2001.

 
The Values and Pitfalls of MBO
A Review of the article, “The Values and Pitfalls of MBO ” by James Owens

By: Pamela Cohea, Caterpillar Insurance Services Corporation, (TNU 2007)
 
            Mr. Owens introduces the reader to the managerial technique MOB (Management by Objectives) and gives some historical background information.  He states that MBO has been praised as the ultimate solution to managerial problems in some organizations.  However, some organizations reject the technique and decided that MBO did more harm than good to their organization.  Mr. Owens proposes the question to the readers, “Why did MBO work miracles in some organizations, while failing in others?”  He reviews the essential elements of a typical MBO Program in stages.
 
Stage One  -Management defines the Organizational Goals       

The top management team set specific and measurable goals for the program. 

Stage Two – Organizational Goals are Delegated

The goals of the program are to prioritize, support, achieve, and analyze each person’s contribution to the organization.

The assignments of the program are delegated to each unit for completion.  Decisions are made as to who will do what, when and with what degree of authority within the program.

The management team should be participative, supportive, and provide the data and resources needed for the program.  The management team must include all peers and subordinates assigned to the program in the decision-making process.

Stage Three – The Agreement Phase of the Performance Contract

A performance contract is drawn up between the manager and their subordinate.  The contract states the agreement of specific job performance goals, functions, tasks, responsibilities, authorities, and resources.  All of the goals should be listed that will need to be met during the duration of the contract.
 
The performance contract is the most important part of the MBO program.  The manager communicates his/her goals for the subordinate, and then the subordinate communicates their version of what goals and results that he/she can deliver.  They also note the authority and resources that they will need to be successful.  The manager and the subordinate begin discussing the variations between the two versions of the contract.  The goal of the discussion is for the two people to arrive at an agreement that both persons believe are realistic and obtainable for the stated contract period.

Stage Four – Implement the Plan

The MBO program will have numerous performance contracts throughout the organization.  Each contract should be a contributing factor in the success of the MBO program.

The manager’s role in this stage includes helping the subordinate fulfill their performance contract obligations.  Their help and assistance can include counseling, coaching, and training efforts.

The overall theme is a relationship between managers and subordinates that enables the organization in hitting their performance targets.
Stage Five - Review Results

The subordinate should assess their actual performance to the performance agreed upon in the contract using a process of self-examination.  If a deviation or discrepancy is detected the subordinate needs to acknowledge the gap and seek the help and assistance of their manager in correcting the issue in a timely manner.

If the failure to meet the goals of the performance contract is due to changes in the situation and not that of the subordinate, the manager and subordinate should abandon the existing performance contract and re-negotiate a new contract.  The new contract should be inline with realistic goals.  As soon as a problem or failure surfaces, both parties need to frankly discuss and realistically resolve the issue.  Failure to address the shortfalls of the performance contract will have a negative outcome and may increase tension between the two parties.

Mr. Owen continued to discuss the values and benefits of a MBO program in an organization.  He believes that when an organization introduces the spirit of a MBO program to the workforce in a positive manner it can be successful.  Recent research confirms that when people understand the goals set before them, they then become motivated to meet the goals.  People who are given vague goals usually lack interest in the program and do not meet their personal potential.  However, if a person is given clear and concise goals and can focus their attention and energy to meeting the goals.  They can be very success and valuable team members in the organization.  A MBO program can improve an organization’s team-building skills.  The management team needs to create an atmosphere of honesty, participation, trust, and openness.  The mutual help and cooperation the MBO program can be a very successful tool for the organization.
 

Work Cited
 
Owens, James.  The Values and Pitfalls of MBO

OTHER 

INTERESTING 

PERFORMANCE MEASURES 

INFORMATION

 

 

Performance Measures Links:

  1. http://www.fpm.com/journal/mattison.htm, (found by Josiah Wedgewood, UoP 2005)

  2. http://www.smallbiz-enviroweb.org/perfmeas/perf.html, (found by Josiah Wedgewood, UoP 2005)

 

 


 

Management By Objectives (MBO)

 

 

MBO According to the Wikipedia dictionary, “Management by Objectives (MBO) is a process of agreeing upon objectives within an organization so that management and employees buy in to the objectives and understand what they are” ( http://en.wikipedia.org/wiki/Management_by_objectives ). “MBO” lays the foundation for the manager and the employee to work toward the objective together. This concept allows the leaders, and employees to set their sights on the same goal for the organization. MBO sets guidelines for both employee and leader to follow that provides instruction to reach any given objective. This concept helps to develop unity within the organization and create a synergy between employee and manager. According to the article, “The Values and Pitfalls of MBO” by James Owen, there are three stages of an MBO program and they are; management defines organizational goals, organizational goals are delegated down the hierarchy, manager and subordinate agree on the subordinate’s contract, implement the plan, and review results.

Darla Sansom (TNU 2005)

United States. Wikipedia, the free encyclopedia. http://en.wikipedia.org/wiki/Management_by_objectives.

 

Other possible MBO stages:

 

Management By Objectives (MBO) is a type of performance measuring tool.  However, there are a lot of problems with MBO and most of it relates to the lack of involvement by the employees.

 

 

Management by Objectives (MBO)

 

Eileen Tremblay (TNU 2005)

 

Peter Drucker introduced the business world to the concept of goal setting and measurement. MBO requires managers to identify the goals they share and how each unit will work to meet those goals. Performance toward meeting the goals becomes the benchmark to assess how the organization is progressing.

 

The system works properly when managers and employees jointly develop employee goals and team or group goals for a specified period. The goals may be "output variables or intervening variables or some combination of the two" (Hersey 139).  The goals are set and at the end of the specified period, and performance analyzed to reach the goals.

 

Before anything else happens, establish the organization's goals. Only then can individual supporting goals be set. Measurement should be on going. Monitor progress during the period and make adjustments if needed. Some goals may be unworkable or unattainable.

 

The negative side of MBO is that employees are sometimes skeptical of the process. MBO may also involve more work for employees, to document goals and progress. If goals are too easy to reach or do not seem relevant to the work, the process will quickly be rejected. As stated in class, managers should concentrate on goals and measure what is important. They should definitely not measure everything.

 


 

Project Management Related Performance Measures

 

 

 

Earned Value

 

BCWP - budgeted cost of work performed

 

Ø

ACWP - actual cost of work performed

 

ØBCWS - budgeted cost of work scheduled

 

ØSTWP - scheduled time for work performed

 

ØATWP - actual time of work performed

 

Four Types of Variances Used in EV Analysis:

 

 AV (accounting) = BCWS - ACWP

 

 SV (scheduling)  = BCWP - BCWS

 

 CV (cost) = BCWP - ACWP

 

 TV (time) = Review Date - date BCWP = BCWS

 

Performance Indices to Assess Project’s Progress:

 

 SPI (Schedule Performance Index) = BCWP / BCWS

 

 CPI (Cost Performance Index) = BCWP / ACWP

 

 TPI (Time Performance Index) = STWP / ATWP

 

Variances are also formulated as ratios rather than differences.  Good when comparing different projects.

 

EXAMPLE

 

Total Project Budget: BCAC = $100k

At Review Date:

 

 Budgeted Cost for Work Scheduled: BCWS = $60k

 

 Actual Cost for Work Performed: ACWP = $80k

 

 % Actual Work Completion = 83%

 Budgeted Cost for Work Performed: BCWP = EV act 

 

        BCWP = 0.83 x BCWS = 0.83 x $60k = $50k

 

 

 

 

 

Sponsors and Services

Microsoft Partner Service and Products

 

MS Partner Services

MS Products Discounts

 

 

Training/Consulting  Support

 

Successful Change

 

Project Management

PMP Training

Basic PM

Advanced PM

PMO Development

PM Support

 

Business Analysis

BA Basics

 

Strategic Planning

Configuration Management

Value Engineering Change Management

Future Organizations

Risk Management

Audit Support

 

Managing Stress while in the Storms of Chaos

 

Excellent Management

The Workshop

 

Building Leaders

Supervisor Skills

Project Management

Motivation

Employee Retention

Customer Service

 

Problem Solving

Improvement

Statistics (SQC)

Productivity

Process Improvement

Performance Measures

 

Business Planning

OD Support

 

Engineering

 

Industrial Engineering

Systems Engineering

 


Soft Skills

 

Stress Management

Body Language

Building Teams

Communication Conflict

Controlling Anger

First Impressions

Interpersonal Skills

Listening Skills

 

Enter-Tain-Ment

 

Training and Facilitation


Training
Facilitation
Recent Workshops
Schedule

 


Finding Investments

 

Grants Management

Glossary

Workshops

 

Connecting Investment Capital With Entrepreneurs and Sound Businesses

 


Business Art

 

Home of the

"B. Stone" Artists

from the

Geronimo Stone Series

 

 

Craig A. Stevens

 


Student Support

 

Classy Photos
UoP Students
Trevecca Students
 

 


Finding Investments

 

Grants Management

Glossary

Workshops

 

Connecting Investment Capital With Entrepreneurs and Sound Businesses

 


Interesting Projects

 

 

Water Hyacinth Project - Mission: Turn the Aquatic Weeds Problem into a Blessing.

 

email Craig Stevens

 for a password.

 


Faith-Based Support

 

Faith-Based Technical Assistance Center

 


 

Book 1

Book 2

Theresa Heflin

Love Letters From God

 



Books & POD Casts


www.bizpods.mobi

 Coming Soon by WBS

 

WBS Books

and Materials

 

 

Geronimo Stone,

His Music, His Love, and  the Mobile of Excellent Management.

 

 www.Geronimo

Stone.com

 

Buy Paperback

Buy Hardcover

Free Ebook

 

 

7 Attributes of Excellent Management Workshop

 

 

Geronimo Stone,

Vol 2,

The Storms of Chaos

 


 

"...and another thing!"  

 

Need Help Staying Awake During Work or Classes?

 

711821

 

Because of Popular Demand

Here is Where you Can Get Craig's Energy Drinks

 


Healthy Chocolates

 

 

For Your Own

Chocolate

Business Call

Irene at

(615) 300-8531

 

 

Send Questions (or Good Answers) to Customer_Service@westbrookstevens.com.  Copyrights © 2001-9.  Contact: Craig A. Stevens (COO) (615) 834-8838 

Westbrook Stevens, LLC, a Woman Owned Small Business.

 

Innovative Resources and Systems, a Service Disabled Veteran Owned Small Business. 

 

Our goal is for all we do to be Christ-centered and consistent with Judeo-Christian values.

 

"Guard against the impostures of pretended patriotism."

George Washington, Farewell Address, September 19, 1796