Install pms in moccis - a proposal

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Installing the performance management system in MOCCIS

Arriffin Mansor©2009

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Contents of this proposal

• What is performance management system and its benefits.

• The PMS development steps and its Gantt Chart.

• What you get with the PMS we install– Corporate planning– Performance planning– Performance appraisal

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Contents - continue

• What other benefits– Individual performance card– Compensation based on performance– Improvement in Training Management

• Who are we?• Our unique selling proposition• Our proposed fee

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What is PMS

• A system of participative management where efficiency measures are installed at all management levels and for all processes in the organisation with the ultimate objective of getting maximum results.

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1 Clearly defined corporate growth objectives2 Coordinated, cascaded and aligned corporate strategies3 Identifying Critical Success factors / Key Result Areas4 Performance measurement and reward culture5 Competency gap analysis and training needs6 Justifying and prioritising interventions7 Improve commitment and leadership of all.8 Improve customers service and satisfaction9 Finally, improve productivity and profitability

© Arriffin Mansor 2009

Benefits of the PMS

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10 integrating the strategies towards corporate goals11

PROJECT GANT CHART - PMSACTITIVITIES / MONTHS

Evaluate past performance and market opportunitiesDefine corporate goals Identify Critical success factors

20 mandays

6 months period

Individual Scorecard

20 mandays

20 mandaysSet departmental goals and establish key result areasperformance tools and role plays for supervisors -seminarCascade the metrics to lower unitsWriting performance action plansCalculating the key performance indicator ratios

performance tools and role plays for managers - seminar

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BASIC TOOLS IN PMS1 Identifying Corporate and other stakeholders2 Defining and setting SMART goals*3 Performance improvement metrics4 Corporate Strategic Maps and action metrics5 Critical Gap Analysis6 Rewards and incentive plans7 Performance value8 Key Result AREas*9 Competency gap analysis

10 Key Performance Indicators or scorecard measures*

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11 Individual Scorecard12 Performance Gap Analysis*13 Input output Analysis14 Manpower planning15 Setting performance targets and benchmarkings*16 Performance improvement cycle17 Corporate Scorecard18 Departmental Strategic maps and action plans19 Production gap analysis (variance analysis)20 Du Pont ROE chart as KPIs21 Recognising performance*

BASIC TOOLS IN PMS - continue

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Who are we?

• ABM consult is a firm headed by Dr Arriffin Mansor

• He has associate consultants who are involved in other consultancy projects plus those teaching at various universities and Excel College of which he is the chairman.

• Dr Arriffin lectures on performance management at public and in house programs.

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Our unique selling proposition

• Our performance analysis is in simple graphic input output analysis.

• 90% of our proposed KPIs are drawn from the financial system of the company.

• Our Performance Improvement matrix shall be used at all levels in the organisation.

• The Du Pont return on equity template shall be used to diagnose for SWOT.

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Our unique selling proposition

• We use financial information as a basis of our key performance indicators.

• We use excel based templates which could be applied by all staff.

• Our input output graphic analysis enable true performance analysis.

• Our system installation information is uploaded in the internet for easy on line reference.

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What is corporate planning?

• Setting clear corporate objectives and goals with the metric network linking the 4 key departments

• Agreeing on the strategic maps linking the 4 BSC perspectives

• Setting the basic strategies in terms of Du Pont Return on equity format where marketing, working and fixed capital strategies are highlighted.

• Resource planning and sourcing

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What is performance planning

• Setting objective and goals for all working unit• Identifying key result areas• Identifying key performance indicators• Identifying the right stakeholders.• Establishing performance targets• Implement the performance action plans

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What is Performance Appraisal

• Monitoring and recording performance• Evaluate and analyse performance gaps• Key Performance Indicators as performance

measures• Identify true performance and justify

intervention costs• Recognise and reward performance

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Inte

rnal

Pro

cess

Stak

ehol

der

Lear

ning

& G

row

th

Reduce Re-Activities thru ABC/M

Establish Web Based Self Services

Knowledge Management

Human Capital

Improved Returns on Investments

More rapid and accessible services

Leadership Development

Inve

stm

ents

Strategy Map: Capture a Cause Effect Relationship from the Bottom Up

IT InfrastructureFacilities and Fixed Assets

Economic Model Process

Expand Global Facility Reach

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• Articulates how the organization creates value for its constituents and legitimizing authority

• Displays key priorities and relationships between outcomes (the "what") and performance enablers or drivers (the "how")

• Provides a clear view of "how I fit in" for sub-organizations, teams, and individuals

• "Cascading the scorecard throughout the organization, and clearly mapping the various units and functions back to the organization or agency-wide map is critical to leveraging and ensuring alignment"

Key Benefits of Strategy Maps

Detailed statement of what is critical to

successfully achieving the

strategy

How success in achieving the

strategy will be measured and

tracked

Key action programs

required to achieve

objectives

The level of performance or

rate of improvement

needed

Objective Description Target

2 per setup per month each Outlet Office

InitiativeMeasure

Number of Reworks

Strategy Map

Stak

ehol

der

Inte

rnal

Pro

cess

L&G

Faster Service Access

Self Service Applications

Web Enable Technologies

Process and ValueMap Analysis

Lean Processes

Inve

stm

ents

Invest in IT

Extend the Map into Measurements, Targets, key result areas and Initiatives

Lean / Six SigmaEliminate waste, reworks, and other errors in our processes

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Make sure the components of your scorecard fit together. We want to create a tight model for driving execution of your strategy.

Goal / Objective

Key Result Areas

Measurement Target Initiative

Maximizes Return on Equity

Profit MarginAsset TurnoverEquity Multiplier

Key Performance Indicators =

Return on Equity

ROE = 40% Increase leverage

Outsourcing to reduce

costs

Alignment of Scorecard Components

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Stakeholder / Customer Internal Processes

Learning and Growth Investments• % of facility assets fully funded for upgrading• % of IT infrastructure investments approved• # of new hire positions authorized for filling• % of required contracts awarded and in place

• Percentage employee absenteeism• Hours of absenteeism• Job posting response rate• Personnel turnover rate• Ratio of acceptances to offers• Time to fill vacancy

• Number of unscheduled maintenance calls• Production time lost because of maintenance

problems• Percentage of equipment maintained on schedule• Average number of monthly unscheduled outages• Mean time between failures

• Current customer satisfaction level• Improvement in customer satisfaction• Customer retention rate• Frequency of customer contact by customer

service• Average time to resolve a customer inquiry• Number of customer complaints

Examples of Measurements by Perspective

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Leading

Definition

Lagging

Input

Output

Outcome

Objective / Quantitative

Example

Intermediate outcomes that predicts or drive bottom-line performance results

Measure Type

Bottom-line performance results resulting from actions taken

Amount of Investments, assets, equipment, labor hours, or budget dollars used

Units of a product or service rendered - a measure of yield

Resulting effect (benefit) of the use or application of an output

Empirical indicators of performance

Subjective / Qualitative

Perceptions and evaluations of major customers and stakeholders

Employee turnover rate

Employee satisfaction rating

Number of Value Meal orders fulfilled

Customer satisfaction rating

Wait time

Customer complaints received as a % of total customers served

Number of cashiers

Types of Measurements

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The Measurement Pyramid

Goal

Outcome Performance

Measures

Program

Program Performance Measures

Program Components

Program Component Performance Measures

Activities

Activity Performance Measures

Strategic/GPRA GoalsEnd-Outcomes

Longer-Term IntermediateOutcomes

Shorter-TermIntermediateOutcomes& Outputs

Outputs& Inputs

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Some Tools for Determining What to Measure

Inputs Process/System Output Intermediate

OutcomesEnd

Outcome

Program Logic Model

DesiredOutcome

Causal AnalysisProcess Flow

ResultsOf

Testing

Not AcceptableAcceptable

PrototypeProduct

Back to Laboratory

To Market

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Corporate GoalsSales1,689,429,000$

Cost of GoodsSold + Extra Taxes Net Profits

384,153,000$ After Taxes358,612,000$ Net Profit

Operating MarginIncome Expenses 21.23%

Statement 731,891,000$ NI/SALESSales Return on

Interest 1,689,429,000$ Total AssetsExpense (ROA)

13,641,000$ 26.17%NPM X TAT

Taxes201,132,000$ Sales

1,689,429,000$ Total AssetTurnover

1.23 Return onCurrent SALES/TA Equity (ROE)Assets 33.96%

709,360,000$ Total Assets ROA X FLM1,370,157,000$

Net FixedAssets & Other Stockholders'

660,797,000$ EquityBalance 1,055,920,000$ Financial

Sheet Current LeverageLiabilities Multiplier (FLM)

265,661,000$ Total 1.30Liabilities Total Liabilities TA/EQUITY

Long Term 314,237,000$ & Stockholders'Debt Equity = Total

3,270,000$ AssetsStockholders 1,370,157,000$

Other EquityLiabilities 1,055,920,000$

45,306,000$

Du pont ROE Chart

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• Past performance trends per historical data.• Performance levels of similar organizational units at a

comparable level that facilitates benchmarking. • Best practices across the agency, the public sector or the

private sector. Must be at a pre-existing high level of performance before you use this approach.

• For newly launched services, may have to establish a baseline per a prototype test and extend out from this point forward.

• For major strategic shifts, may have to set directly per the plan itself without regard for hard data.

How to Set Targets

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• Targets match up with measurements, one to one. • Targets require improving current levels of performance. • Targets are a stretch, but achievable: they may require

improvements to existing processes.• Targets are quantifiable so that the target communicates if

the expected performance was met.• Long-term targets are established before short-term targets.• Financial/Budget related targets are established before non-

financial targets.

Checklist for Setting Targets

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Our services include

• Providing training services for all managment and staff on the proposed PMS.

• Helping the CEO in preparing the performance corporate plans.

• Coach and guide managers and staff to prepare their own performance cards.

• Coach and guide managers and staff in performance evaluation.

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PERFORMANCE MEETINGS

(Boss subordinate meetings and relationship)

1. Begin with goal setting with performance action plans2. Progress with performance monitoring and

coaching3. End with performance analysis, evaluation and

appraisal4. Recognition and reinforcement with rewards and

promotion

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FORMS USED IN PMS(assist practitioners in the application of the PMS)

1 Writing objectives on smart - stackholders2 Key Result Areas - how to identify the right3 Key Performance Indicators - chose the right KPIs4 The 4 phases of the value chain5 Performance Targets / standards / Past achievement6 Gap Analysis - to separate the impact of volume and efficiency7 Performance Planning meeting8 Performance Review meeting9 Strategic Map and Action Metrics for supervisors and managers.

10 Improvement metrix11 TNA through cause effect ralationship of the 4 perspective12 Marketing matrix

to be filled by the respective departmental staff

13 Production matrix14 Finance Matrix15 HR Matrix16 Individual scorecard - Managers17 Individual scorecard - Supervisors18 Individual scorecard - Staff

© Arriffin Mansor 2009

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PERFORMANCE ANALYSIS

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24 hours communication with our consultants

• Our handphone is open 24 hours• Our gmail is available 24 hours• Written group discussions through

yahoogroups on line real time• Written groups discussions where video and

photographs are displayed through ning groups.

• Our blogspot internet reference materials

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Our Reading materials available at blogspot

1The importance of performance measures2The corporate performance structures3Performance perspectives metrics4Cascading the metrics5Input output analysis6The key performance indicators7The key departmental metrics

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PMS basic tools

• Writing clear performance objectives and goals

• Identifying key result areas• Setting challenging performance targets• Choosing the right key performance indicators• Evaluate performance precisely for

recognition and improvement.• Participation and teamwork is the culture

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Performance Management is a System where ..........

• Performance planning are more quantified and proper measures put in place.

• Participation and commitment are the attitude and culture of the organisation.

• Key attention areas are identified and forcused.• Performance reviews and appraisal are

objective.• Performance improvement is continuous.

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• Setting Clear Objectives and goals• Identifying key result Areas

Planning

PERFORMANCE MANAGEMENT

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corporate performance and strategy review

Workshop on basic performance tools

Cascading goals and Strategic Mapping

Performance planning for each staff

Performance Appraisal for each staff

The PMS has 5 key activities

Performance Improvement

© Arriffin Mansor 012-2786282

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Business objectives

Key ResultAreas

Critical SuccessFactors

PerformanceIndicators

Performancestandards

Strategicinitiatives

PerformanceActuals

Change

Performance Improvement

design strategic programs

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Benefits of PMS

• Management by objective• Continous improvement attitude and culture• Best practices, problem solving and

innovative solutions• Leadership development with learning,

training, coaching and mentoring.• Objective appraisal and fair reward

management.

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The staff shall learn the following:-

• Able to understand and write his own performance card

• Able to appraise own before discussing with the boss

• Able to participate in setting own goals and objectives

• Participate in searching for the right key result areas and solutions.

• Linking his performance with that of his boss

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Our proposed fee structure

– Seminar Fees RM3,500 x 2 days x 1 time = RM7,000

– Corporate Planning 10 days x RM2,500 = RM25,000

– Performance planning 10 days x RM2,500 = RM25,000

– Performance Appraisal 10 days x RM2,500 = RM25,000

– TOTAL= RM82,000

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Thank you for giving us the opportunity to serve your

organisation.Dr Arriffin could be contactable

at 012-2786282 [email protected]