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IntroductionSyllabus / Lecture Plan
• Lecture 1 - Unit 1
• Lecture 2 - Unit 2
• Lecture 3 - Unit 3
• Lecture 4 - Unit 4 /5
• Lecture 5 - Assignment
• Lecture 6 – Unit 6
• Lecture 7 - Unit 7
• Lecture 8 – Unit 8
• Lecture 9 - Exam
1
Define, Role ,
Scope of FM
FM Performance
BCP
Facilities Management Principles
Value / Risk Management / IT
Facilities Management 1 [D39FM]
Unit 4
FM Performance
Facilities Management Performance
Overview
• Key Performance Indicators (KPIs)
• Problems of Identification and Application of A Generic Set
of Performance Parameters
• A Methodolgy for Developing KPI (Management by
Variance Tool)
Facilities Management 1 [D39FM]
Unit 4
Facilities Management Performance
Learning Outcome
• Appreciate the problems with contemporary approaches to
the performance assessment and benchmarking of FM
operations
• Learn to develop an alternative technique of performance
assessment
Facilities Management 1 [D39FM]
Unit 4
Facilities Management Performance
4.6 Introduction
• Based on a case study research done by the University for the premises department of Major Financial Service Company, Standard Life Assurance
• Pertinent Info on the case:– Responsibilities: Mtce Mgt, Space Mgt, Proj Mgt, Gen premises
Mgt of buildings, Admin of associated support svcs
– 27 buildings & 6000 employees
– Premise Manager and supporting managers
– In-house team with external contractors – in house team single skilled environment 10%.
– Planned & reactive maintenance & other works supporting the core business departments
– Competitive bidding for projects and partnering approach for service contract
– Need set of key performance indicators (KPI) to evaluate performance
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.8 Current & Previous Approach to Performance
Assessment
• Limitation of current application of KPIs
• Industry or Organisation Specific
• Applicable for monitoring the management of FM tasks
• Gap in understanding of the metrics (standards of
measurements) between customers & FM
• Metrics have no or little link with the performance of
business
• Significance of FM on the business unnoticed
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
Evolution of the Performance Assessment Framework
• Realisation of need to develop a more holistic approach linked to
business:
– Benchmarking
– Use of non financial indicators instead of using just financial
indicators
• Include indicators relevant to business- oriented customer
• Indicators can be presented graphically for comparison between
desired and actual performance
• Ranking or prioritisation of KPIs required in terms of the strategic
significance of strategic objectives
• Important to iron out the difference in perception between FM and
customer.
• Performance measurement must be dynamic
• Performance profiling for effective communication and improvement
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
Evolution of the Performance Assessment Framework
Facilities Management 1 [D39FM]
Unit 4
KPI
FM
Expectation
Customer
Expectation
- Business
Approaches
What is the
GAP?
Management
by Variance
Facilities Management Performance
4.9 Concept of The Alternative Framework
• Based on Becker’s 1990 concept and Scale of Framework suggested
by Slater(1997) i.e A set of definitive KPIs within a manageable
framework.
• Tool designed for a graphical profiling for easier use and application
• Indicators selected for the tool were to be created using a combination
of premises department and business customer views (done using
a case study application – action research).
• In the absence of a comprehensive alternative, a bespoke tool would
be developed using a bespoke set of performance indicators. (172
indicators)
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
• Use key literature sources to identify KPIs (Varcoe, Kay, Wang,
Slater, Palvia, Grover etc)
• Varcoe 1993
– cost , quality , delivery
– Limitation of cost per area
– Number of performance indicators should be minimised
– Best to have 5-6 biz objectives and 4-6 facilities performance
• Wang 1992
– Lack of agreement on KPI
– Best to have bespoke set of KPI
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
• 172 KPIs identified
• Narrowing down KPIs
• Some Issues identified:
– Mix and weighting of measures determined by a combination
by of factors (business env, bz strategy & type of service) and
size of customer base
– Problem of correlation of performance and criticality to
business or customer satisfaction
– Question of severity of gap between actual and he
benchmark
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
Facilities Management 1 [D39FM]
Unit 4
KPI
Phase 1 – Clarifying The Performance Assessment
Context
Phase 2 – Developing the Bespoke Performance
Assessment Tool
Phase 3 – Prioritisation of KPI
Phase 4 – Rating of FM Performance
Management
by Variance
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 1 – Clarifying the Performance Assessment Context
• Clarify the nature & priority of the performance parameters by expert panel
• Expert panel - equal number of staff from Premises Dept & Customer
• Consensus View using techniques- questionnaire, group feedback, scenario workshop, discussion to prioritise set of KPIs and rank this shortlist
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 2 – Developing The Bespoke Performance Assessment Tool
• Select a comprehensive & coherent list of PIs from the
long list
• Shorten list (by polling) by 1st classifying into categories of
essential, only desirable and of only tertiary importance &
then eliminating the last 2 categories
• Further refinement from 59 to 30 and finally to 23 KPIs
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 2 – Developing The Bespoke Performance Assessment Tool – issues found
• Definition of KPIs strongly influenced by corporate culture
– confirm difficult for generic set of KPIs
• Orientation of KPIs depends on corporate culture –
customer focus KPI in this case
• KPI chosen may be due to currency of issue (eg energy
usage)
• KPIs selection dependent on level of representation in the
management hierarchy (result in low strategic focus)
• Subjectivity and omission of KPIs
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 3 – Prioritization of Key Performance Indicators• Allocate grade (1 to 10 mark for each KPI) in the context
of strategic relevance to business• KPIs on top of list – of more strategic importance• KPIs at the bottom – more operational• Difficulty of distinguishing KPIs at top end• the very and supremely important KPIs• Subjectivity in according marks• Mixed bag of indicators, strategic, operational & customer
orientated arrived at and ranking subjective• Difference in perception (eg cleaning)
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 4 – Rating of Facilities Management Performance
• Semantic scale of rating – Unsatisfactory, satisfactory,
good, excellent
• Plot result ( figure)
• Issues:
• Datum scale affect shape of graph
• Respondent may be skewed in their response due to
perception and assessment approach
• Biasness may be presence depending on which
department conducts the performance appraisal – 3rd
party may be the answer
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
Concept
• ‘At a glance’ picture of the level of performance in key areas
• Main KPIs and Sub-KPIs instead of a generic set of KPIs at
departmental (latter ineffective)
• Rationale - Strategic level of performance in form of main KPIs
will, through measurement of sub-KPIs, contribute to continuous
improvement of the department
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
Architecture of the Tool
• Selected KPIs – plot difference in perception (variance) by
customer and the Premises Department.
• Application – can track performance over time though
several performance assessment
• Gap (variance) identify problem area.
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
• Snap-Shot Application
– Useful for identifying problems
• Trend or variance analysis
– Useful for identifying changes in performance over time
– Correlate such changes to company’s policies and plans