logo
Oracle Management Consulting’s Performance Management System will deliver  25 to 40% operating improvement/effectiveness.


FAQ


What Is Performance Measurement?
Performance measurement is the framework of strategies, actions, guidelines and indicators that enables effective operational performance that is monitored in an open and transparent manner. It promotes and executes on consistently improving operational performance, and is one of the key contact center drivers to help achieve success towards the company’s strategic plans.

What Are Performance Measures? Performance measures quantitatively tell us something important about our products, services, and the processes that we provide. They are a tool to help us understand, manage, and improve what our organization does. Effective performance measures can let us know:

  • How well we are doing,
  • If we are meeting our goals,
  • If our customer is satisfied,
  • If our processes are in statistical control, and
  • If and where improvements are necessary.

They provide you with the information necessary to make intelligent decisions about what we do.

A performance measure is composed of a number and a unit of measure. The number gives us a magnitude (how much) and the unit gives the number a meaning (what). Performance measures are always tied to a goal or an objective (the target). Performance measures can be represented by single-dimensional units like hours, dollars, number of reports, number of errors, etc. They can show the variation in a process or deviation from design specifications. Single-dimensional units of measure usually represent very basic and fundamental measures of some process or product.

More often, multidimensional units of measure are used. These measures are expressed as ratios of two or more fundamental units. They may be units such as average handle time per call (a performance measure of call performance), average speed to answer (a performance measure or the companies speed to answer a customer’s call), Performance measures expressed this way almost always convey more information than the single-dimensional or single¬ unit performance measures. Ideally, performance measures should be expressed in units of measure that are the most meaningful to those who must use or make decisions based on those measures.

Why Measure Performance?

  • Performance measurement yields many benefits for an organization. One benefit is that it provides a structured approach for focusing on a program’s strategic plan, goals, and performance. Another benefit is that measurement provides a mechanism for reporting on performance to upper management.
  • Measurement focuses attention on what is to be accomplished and compels organizations to concentrate time, resources, and energy on achievement of objectives. Measurement provides feedback on progress toward objectives. If results differ from objectives, organizations can analyze gaps in performance and make adjustments.
  • Performance measurement improves the management and delivery of products and services.
  • Performance measurement improves communications internally among employees, as well as externally between the organization and its owners and stakeholders.
  • Measurement reduces emotionalism and encourages constructive problem solving. Measurement provides concrete data on which to make sound business decisions, thus reducing the urge to manage by gut feeling or intuition.
  • Measurement increases one’s influence. Measurement identifies areas needing attention and enables positive influence in that area. Also, employees perform to the measurement.
  • Improvement is impossible without measurement. If you don’t know where you are, then you can’t know where you’re going and you certainly can’t get to where you want to be. It’s impossible to traveling in unknown territory without a compass or a map. You’re totally lost.

How Is Performance Measurement Used?
Another way of asking this question is what are the benefits of performance measurement? The answer is that performance measurement has many beneficial uses. For example, it can be used to:

  • Set goals and standards
  • Detect and correct problems.
  • Manage, describe, and improve processes
  • Document accomplishments
  • Gain insight into, and make judgments about, the effectiveness and efficiency of programs, processes and people
  • Provide measurable results to demonstrate progress towards goals and objectives
  • Determine the effectiveness of your part of your group/department/division/organization

What are the Types of Classifications of Performance Measures
The four classifications of performance measures. These four are:

  • Cost
  • Quality
  • Service
  • Performance

Know How to Check/Test Your Performance Measures
After developing a performance measure, you will need to check/test them for soundness (i.e., completeness, applicability, usefulness, etc.). Knowing how to perform these checks/tests and, thus, knowing what to look for in a performance measure, will help your team develop sound performance measures from the start. Here is a test from which to use.

The SMART Test
The SMART test to provide a quick reference for determining the quality of a particular performance measure:

  • S = Specific Is the measure clear and focused to avoid misinterpretation? It should include measurement assumptions and definitions, and should be easily interpreted.
  • M = Measurable Can the measure be quantified and compared to other data? It should allow for meaningful statistical analysis. Avoid “yes/no” measures except in limited cases, such as start-up or systems-in-place situations.
  • A = Agreed or Attainable Is the measure achievable, reasonable, and credible under conditions expected?
  • R = Realistic Does the measure fit into the organization’s constraints? Is it cost-effective?
  • T = Trackable Timley, is measurement doable within the time frame given?

SMART

What Performance Measures Won’t Tell You
Four points about what performance measures won’t tell you. Consider the first when your measurement program is going well. Consider the second and third when your performance program is going poorly. Bear the fourth and fifth in mind in either case.

The Cause and Effect of Outcomes Are Not Easily Established.
Outcomes can, and often do, reveal the impact of the progress, but without collaborating data, it is difficult to demonstrate that your progress was the cause of the outcome(s).

Poor Results Do Not Necessarily Point to Poor Execution.
If performance objectives are not being met, it is obvious that something is wrong, but performance information itself does not always provide the reason. Instead, it raises a flag requiring investigation. Possibilities include performance expectations that were unrealistic. The organization should be able to explain performance results and to define and address the contributing factors.

Numerical Quotas Do Not Fix Defective Processes.
There is also a danger when performance objectives become numerical quotas. The setting of numerical goals and quotas does nothing to accomplish improvements in the process. Identify the challenges and changing the processes are what is needed to improve performance and achieve desired outcomes.

Measurements Only Approximate the Actual System.
Performance measurement provides a valuable tool for management and continuous improvement. However, people might try to game the system in a way that will make them look good. Additionally, accurate data may not be available. These are among the reasons why you need to recognize the fact that the measured system is not the same as the actual system.