Research Topics: Performance Measurement For Management

Developing an Integrated Measurement System and Balanced Scorecard

Balanced Scorecard                 The balanced scorecard identifies and integrates four different ways of looking at performance (financial, customer, internal business, and innovation and learning perspectives) (, 2002, ). The Balanced Scorecard (BSC) was first devised by  and  (1992) as a measurement framework that was expected to overcome some of the deficiencies of traditional performance systems. It gives a holistic view of the organization by simultaneously looking at four important perspectives (financial, customer, internal processes, innovation and learning). Apart from being a measurement framework, the BSC achieved recognition as a strategic management system (, 2002, ). The BSC is distinct from other strategic measurement systems in that it contains outcome measures and the performance drivers of outcomes, linked together in cause-and-effect relationship ( and , 1996, cited in , 2002, ). One of the reasons the BSC is such a powerful tool is precisely that it stresses the linkages for achieving outstanding performance in related measures, rather than concentrating on isolated measures. As some people suggest, ‘the added value of the balanced scorecard is in the drawing together of all the key business areas and identifying the linkages that deliver success’. Thus, the scorecard helps to fight sub-optimization by forcing managers to consider all key measures that collectively are critical for the success of the organization and highlighting the need to analyze trade-offs (, 2002, ).   Balanced Scorecard in a Service Firm             The organization is a service firm that gives its customers with managed business solutions such as integrating outsourcing options with systems design and support. The company has developed a customized information system that effectively incorporates diverse outsourcing options with the client’s on hand internal support systems. The management had helped the highly skilled, highly trained, and highly independent staff of consultants to become an exceptional team of experts, capable of handling the most difficult customer demands. Development of strong interpersonal relationships had become the defining characteristic of the organization. Thus, the company’s success depended on the internal relationships the staff maintained among themselves as much as the external relationships they built with customers. The management and the staff had created a vibrant, knowledge sharing, collaborative work community that thrived on the lifelong-learning and personal growth initiatives that had become so familiar to anyone involved in the company. The company’s growth called for a more effective measurement system that will not harm what the management and the staff have worked for. The main concern of the management is to protect the company’s autonomous, collaborative work environment while continuing to grow the customer base and the staff. When the company was just starting out, the management had no difficulty assessing the progress of the employees through individual observation and the related company results. However, the number of the employees has grown and the one-on-one type of performance measurement that the management used to employ is not effective and efficient anymore. Now that the company’s corporate intellectual assets (the employees’ collective knowledge and strengths) were well established as the company’s primary competitive advantage, the management was searching for a way to measure and guide the process of sutaining that advantage.             The company uses a customer-intimacy strategy, which emphasizes the value of long-standing customer relationships. This strategy seeks to create and maintain customer loyalty by continually tailoring services to the precise needs of the customer. Customer-intimacy requires flexible and responsive business processes and a highly educated, capable and empowered, staff who partner closely with customers to develop and implement solutions that work. The company’s effective and efficient development and implementation of system solutions for customers depended on knowledge sharing among employees. The management developed four specific strategic objectives: 1. Company growth 2. Understand customers’ needs 3. Promotion of knowledge sharing 4. Maintain an open and collaborative culture in order to attract and retain employees           Balanced Scorecard Alignment             Balanced scorecard could be used to align an organization’s strategy with key performance measures, providing forward-looking performance management with adequate consideration of employee contributions to corporate success. The balanced scorecard can be used to address the performance criteria typical of organizations competing with intellectual assets. The firm was able to attract experienced employees who are complex problem solvers capable of dealing with very diverse , dynamic situations. The management recognized that these talented, motivated employees could easily find employment elsewhere, potentially at a higher salary. To succeed with a customer intimacy strategy, the firm had to retain its expert staff. These highly skilled consultants needed a collaborative, supportive environment with considerable freedom at the point of customer contact in order to make effective decisions in a timely manner. The firm’s core values provide the foundation and infrastructure to accomplish its customer intimate mission. These core values are: 1. Balance 2. Authenticity 3. Service over Self Interest 4. Empowerment 5. Diversity             The recent growth of the company forced the firm to employ a new performance measure that is more effective and efficient. The management chose the balance scorecard as an innovative performance measurement process. The strategy and vision of a firm is the center of the balanced scorecard. These strategic objectives are translated into measures that the management use to track how they create value for customers, how the internal processes of the business can be improved, and how the investment in people supports improved future performance. Balanced Scorecard Perspectives     Source:   1. Customer Perspective – focuses on the external environment to understand, discover and emphasize customer needs. Common measures are customer satisfaction, customer loyalty, and customer retention. 2. Internal Business Processes Perspective – focuses internally along a value chain comprising innovation, operations, and post sale service processes. Common measures are research and development expenditures, sales from new products, productivity, cycle time, and throughput efficiency. 3. Learning and Growth Perspective – provides the foundation, or infrastructure, needed to meet the objectives fro the other two operational perspectives. Common measures are employee satisfaction, dollars spent on training, and voluntary turnover. 4. Financial Perspective – Focuses on shareholders. Common measures are economic value added, return on investment, and net income (, 2001).               The balanced scorecard may be the appropriate tool to link performance measurement to the essential internal elements that have led to the firm’s success with a customer-intimacy strategy.             The significance of the balanced scorecard is that it aids in the progress of an agreement around the firm’s vision and strategy, permitting managers to communicate the firm’s strategy throughout the organization and forces managers to focus on the most critical measures. This communication guarantees that employees comprehend the long-term strategy, the relations between different strategic objectives, and the connection between the employee’s actions and the selected strategic goals. The balanced scorecard can also aid firms in the allocation of resources and setting priorities based on the initiatives’ role in achieving the long-term strategic objectives. It is also expected to give strategic feedback and promote learning through the monitoring of short-term strategic results ( and , 1996 cited in  and , 2003 ). A successful balanced scorecard program should be a change process ( and  2001 cited in  and , 2006 ). The balanced scorecard can help an organization in six ways ( and , 2006). These are: 1. Promotion of Growth – owing to focus on long-term strategic outcomes, not just short-term operational results 2. Performance Tracking – individual and collective results can be tracked alongside targets in order to correct and improve 3. Focus – when measures are aligned to a few critical strategies, the balanced scorecard gives focus on what is vital to the company 4. Goal Alignment – alignment occurs across the organization when the important factors to success are measured and the measures support each other 5. Goal Clarity – the balanced scorecard respond to the question, “How does what I do daily contribute to the goals of the enterprise?” 6. Accountability – individuals are assigned as owners of metrics in order to provide clear accountability for results       The business balanced scorecard are often employed by consultants especially those with financial services backgrounds as a change lever to help organizations build the cornerstone of their strategic management system. It is used as a means to translate an organization’s vision into operational actions. It provides a balanced approach for uniting strategic, operational, and organizational perspectives in planning. It offers guidelines for integrating performance management into strategy, organization, and operations components. In translating the vision into these components, the organization’s behavior is guided, the components are linked in meaningful ways, and strategy is operationalized in ways that are significant to the organization’s members (, 2002 ).                       Bibliography:             Credit:ivythesis.typepad.com

Developing an Integrated Measurement System and Balanced Scorecard

Balanced Scorecard The balanced scorecard identifies and integrates four different ways of looking at performance (financ...

Intellectual Capital

Problematic Situation: Failure to meet monthly sales quota             Our company is owned and headed by a foreign businessman.  As a sales manager, I am responsible to cater the major needs of our distributors as well as stimulate big projects.  Aside from this, I am also responsible to manage three sales coordinators who in turn resolve minor difficulties of distributors and entertain project queries.  Half of the long-time distributors are foreigners and I have been doing business with them for five years now.  At least half of the big projects are given to these long-time distributors while the remaining projects are provided to new distributors which are both intended to flare their enthusiasm to continue pushing our products.  From distributor’s orders, our team derives monthly sales performance.                    The challenging part for me is to nourish the relationship using my technical, managerial and personal relation skills within a familiar but complex and ever-changing working environment.  My experience shows that merely maintaining and improving distributor relations does not automatically result to excellent monthly sales performance (in which my team regularly gets during my early years), or at least, meeting the monthly sales quota.  I am aware that sales is a very dynamic job but I performed well in the first two to three years as reflected by my team performance.  I also came into this bathroom fixtures company as a sales manager already but it seems year-on-year my team performance go from constant to declining.               This is a problematic situation for me because I feel that my falling performance does not reflect my capability and experience.  Aside from this, I feel that I am not compensated for the effort I have done for a specific month whenever my team fails to meet the quota.  I loose my monetary incentives, chance of promotion, professional gratification and self-esteem.  This created a vicious cycle of de-motivation (I am oftentimes irritated that I intentionally pressure and make my subordinates uneasy), lost of work focus (I admit I almost apply to a direct competitor for higher compensation and new work environment) and sometimes financial trouble.  Failure to meet monthly quota is a problematic situation since it is the only quantitative, and at most times, rational way to evaluate sales managers’ performance.   Choosing Relevant Metaphors and Evaluation Criteria             Metaphors are useful to determine critical issues in a problematic situation which can aid decision-makers in implementing an effective solution.  However, there can be numerous ways to view the problematic situation that makes metaphor pool doubtful in use.  In view of this, there is the need to highlight only those relevant metaphors.  Using creative thinking, “Failure to meet monthly sales quota” can be viewed in three ways: namely: “falling star dilemma”, “fleet retreat scenario” and “unfilled fisherman’s net”.  First, when the star player of a basketball team looses an important match, he becomes frustrated because the expectations of his coach, team players and fans are not met.  In addition, his skills and efforts are undermined by the loss.  In view of the effect to the person and output responses, “Falling star dilemma” is relevant to the problematic situation as there is an immediate emotional setback felt by the star player with respect to the expectation on how he will carry his team towards the win.               The second metaphor is the position of a surviving ancient war commander after retreating from a confrontation.  “Fleet retreat scenario” is relevant primarily because of the characteristics of the commander and nature of the task.  The commander has technical and leadership skills as well as experience when going into a war.  However, his remarkable qualities are basically useful to boost the moral not the fighting abilities or armory of his fleet.  The nature of the task is to win in whatever means that can undermine his brilliance or charisma in favor of confrontation outcomes.  In this example, he is likely to receive applause or punishment to his king depending on the palace strategy.  In effect, even though he thought he done the right thing as the enemy is heavily loaded with ammunitions, the reward is blurred.               Finally, when a fisherman did not catch the level of fish he expects even though he learned that the water is full of those, he would think that he was told a lie.  However, the task environment might not be favorable on that specific day.  Tide is too high or it is off-season or other fishermen already got the bulk of fish before him.  “Unfilled fisherman’s net” is relevant to the problematic situation since the task environment is affected by many factors in which the fisherman can be aware but no choice but to try his luck due to the vitality of the task. The Major and Minor Metaphor             To identify the major and minor metaphors is crucial in accomplishing the latter stages of the total systems intervention (TSI).  Since major metaphor has direct relation to the problematic problem, vital issues to consider can be recognized that will help us in choosing the most appropriate model and methodology to arrive at a solution.  Also, distinguishing major and minor metaphor can polish our knowledge on what specific issues should be addressed with immediacy.  In doing so, we can pinpoint the areas of the organization (may it be in finance, human resource, sales, manufacturing, etc.) from these identified issues that might need restructuring/ reinforcement.  There should be a dependent (minor) metaphor to be able to come-up with specific and concrete findings that the dominant (major) metaphor has.  The distinction is merely a technique to highlight critical issues that will aid in decision-making.                            As we have identified the crucial elements/ criteria for evaluating the listed metaphors (see below), we have already tapped critical issues although in general terms such as people, process and environment.  By using figure 1, we can define the major and minor metaphors based on how they relate to the criteria of the problematic situation.  By merely looking the table, it is obvious that the “falling star dilemma” should be the major metaphor as it is highly related to the 4 and 5 criteria of the problematic situation while maintaining an acceptable level of relatedness to 1, 2 and 3.  However, 4 and 5 criteria are at the end of a flow chart (see figure 2).  The impact of responses and its perceived effect may   Figure 1: Benchmarking Criteria   Situation Characteristics of the main person (1) Nature of the task (2) Task environmental factors (3) Nature of Output Responses (4) Effect to the main person (5) Failure to meet monthly sales quota Customer-driven, uses leadership and relational skills; Has limited control with sales coordinators performance; Bounded with corporate policies Formalized internally but informal/ negotiation-based to distributors; Team-based; Minor issues of distributors has a potential to evolve especially on relationship/ behavioral matters; Firm and distributors are profit-driven  Sanitary sector sensitive to price changes; Organizational change can “shock” distributors; Distributors communication can be initiated by other employees Direct accountability to owner and customer; Member de-motivation; Absence of monetary incentives; Loss of promotional criteria; Peer comparison Professional; Personal; Emotional; Monetary  Falling star dilemma Driven by self-motivation; Can enhance other players by passing the ball; Can bypass coach rules but not the rules of the game ** Dynamic; Can change approach depending on the instances; Team-Based; Past games are irrelevant to future evaluation except on key games ** Injuries and other court events can instantly loose the change to advance; Changes affect team performance *** Highly related Highly related Fleet retreat scenario Highly related Highly related War is highly dependent on the capabilities of conflicting sides; On the contrary, plan leakage, unprepared defense and “surprises” can undermine capabilities ** Accountable to the king but not the public; Can increase battalion capability and plan for revenge; Blurred outcome * Blurred; Can even increase motivation to revenge * Unfilled fisherman’s net Uses experience and some technical abilities; Driven by economic motivation; Independent without strict rules *       Informal; If no catch today, it does not follow that this will repeat tomorrow; Result- and luck-based * Highly related No accountability as the task is bounded by the rules of nature * Monetary and economic; Rare emotional or personal effect * Note: * Not related, ** Quite related, *** Fairly related     Figure 2: Flow Chart of “Failure to meet monthly sales quota”             not follow their obvious results to the person if the star player/ sales manager are aware that their characteristics and the execution are affected by outside forces beyond their control.  In the contrary, the “unfilled fisherman’s net” highly satisfies this lacking.  Although this is the only related factor of this metaphor to the problematic situation, it should be noted that it is a one-man task whereas the two other metaphors are team effort.               Again, the purpose of finding major and minor metaphors is to determine critical issues of the problematic situation and not to find a condition that merely conforms to the nature of its main actor, task, task environment, responses and main actor effect.  If figure 1 will be read vertically, it will be observed that the three metaphors are related to the problematic situation under the task environmental factor criteria.  Astonishingly, the non- team-based situation “unfilled fisherman’s net” recorded highest relatedness.  This means that even in non-team setting the criteria is relevant to the main actor’s level of success in completing the task and gets his desired responses/ recognition.  This rationale makes “unfilled fisherman’s net” the major metaphor while “falling star dilemma”.                     The “fleet retreat scenario” is dropped because it is focused on the obvious and manageable criteria 1 and 2 while it has unclear explanation of 4 and 5.  Although it is highly related in 1 and 2, this can be undermined because such factors are already recognizable to the sales manager as he noted in the introduction that he has the “skills and five-year experience” while sales department is “dynamic”.  However, it is to be assumed that he already tried to maximize his abilities to address the problematic situation and truly aware on how to handle the dynamism of the job to make be able to undermine these criteria.  In addition, with reference to the environmental ambiguities of the task, it is assumed (and is actually experiencing) that information systems of the company is limited to quantitative data and major qualitative ones.  In effect, it relies not only on the initiative of the manager, and more importantly, to the luck of the company that outside forces would be favorable or somehow controllable.                              The Methodology for the Task Environmental Factors             After we have identified the major metaphor, the focus now is on the critical factor of the problematic situation.  Metaphors are merely means to creative thinking while determination of critical factor is the end.  Task environmental factor (onwards will be called as outside factors) is under a complex system since the interaction of the sales manager and distributors is largely loose while the former and the company owner are undetermined since their relationship and company policies are customer-driven.  In addition, the system is evolving due to product cycles and relationship building, it is highly influenced by behavior and largely open to environment.  With regards to participants dimension, outside factors operate within a pluralist relationship.  This is because participants (sales manager, owner and distributors) have basic compatibility of interest to maximize product sales.  Although there are conflicts in addressing extra-distributor’s requests, compromise is possible (see figure 3).  Figure 3: The System of System Methodologies Table             Being a complex-pluralist of the problematic situation, soft systems methodology (SSM) will be used (1999).  As SSM will serve as the methodology, rich picture, CATWOE determination and conceptual model should be derived and evaluated.  As shown in figure 4, the sales manager serves as the middleman between the business relationship of the owner and distributor.  As observed, the owner’s only reference of his performance is sales quota.  However, outside forces that was resolved by the sales manager was hardly included in the evaluation.  As he also cannot identify and address the all order hindrances created by the outside forces including the independence of distributor decision, the resolution effort will totally be unmerited/ awarded.  He does not receive monthly incentives, performance appraisal, recognition and even subordinate trust.    Using figure 5, the root definition of the sales system will be, “The sales manager is the intermediary, under the direction of the owner, to resolve any conflicts regarding their distributor policies and relations in any way possible as Figure 4: Rich Picture (Sales Managers’ Tasks) Figure 5: CATWOE Determination   Sales Manager Distributor Owner Customer (Beneficiary) All All All Actor (Performers) All All All Transformation (Core activity) Intermediary between parties Ordering Monitoring/ Action Worldview (Underlying system’s belief) I can resolve any conflicts by negotiation skills Customer is always right We need customers to sustain business Owner (The Appraiser) Owner Owner Owner Environment (Constraints) Obtaining quota Also have other businesses Also have other concerns   to foster customer-driven approach.  Otherwise, we (distributors) will not further order or resort into a direct communication with the owner for more abrupt action.”  As the sales manager and owner are customer-centered, the conceptual model in figure 6 (see below) becomes significant.  This illustration does not define the real world yet because there are also versions of the sales manager and owner’s view of the system.  As illustration 5 is regarded as operational activities, its use is appreciated when these activities are decomposed to monitor their achievement and control the quality of each activity execution (2004).   Figure 6: The Conceptual Model of the Business System (Distributor’s View)                                Credit:ivythesis.typepad.com

Intellectual Capital

Problematic Situation: Failure to meet monthly sales quota Our company is owned and headed by a foreign businessman....

Non-Financial Performance Measures

Non-Financial Performance Measures Customer Satisfaction             The evaluation of the value of a company is traditionally based on financial performance measures. However, this type of information indicates what the company has achieved in the past, but the real value of the company must include future perspectives. What we need is non-financial performance measures, which can tell us about what is going to happen with the financial results in the future, so the evaluation of the value of the company can be based on actual financial success and forward-looking non-financial performance measures. Also inside the company, managers require a measurement system, which provides forward-looking information, and by it early warning, and which makes it possible to carry out the necessary adjustments to the processes before they turn into unwanted business results. This is what modern measurement of total quality is all about (2002).             The successful experiences of the Swedish and American customer satisfaction indices have inspired recent moves toward creating a European Customer Satisfaction Index (ECSI), founded by the European Organization for Quality (EOQ), the European Foundation for Quality Management (EFQM), and the European Academic Network for Customer Oriented Quality Analysis, and supported by the European Commission (DG III).       European Customer Satisfaction Index (ECSI)             The basic ECSI model is a structural equation model with unobservable latent variables. The model links customer satisfaction to its determinants, and, in turn, to its consequence, namely customer loyalty. The determinants of customer satisfaction are perceived company image, customer expectations, perceived quality, and perceived value (value for money). Perceived loyalty is conceptually divided into two elements: hardware, which is consists of the quality of the product or service attributes and human ware, which represents the associated customer interactive elements in service such as personal behaviour and atmosphere of the service environment. Each of these seven latent variables is operationalized by a set of measurement variables, observed by questions to customers, and the entire system is estimated using Partial Least Squares (PLS) method. Application: Specific Measurements             When introducing the specific measurements into the model, two alternative strategies may be applied. One possibility is to substitute the generic questions by the specific questions and then run the model again. Another possibility is to estimate the model and the indices using the generic questions alone and then analyze the relationship between the estimated indices and the specific questions. The advantage of the first procedure is that you get an estimate of the full model. However, you get indices that are not necessarily identical to the indices obtained for the generic model. The advantage of the second procedure is that you only get one set of indices. Implementation:             All respondents must be asked to answer both the generic and the specific questions. Using the generic questions, the ECSI model will then be estimated and the seven indices must be computed once and for all. Subsequently a statistical analysis of the relationship between a computed index and its specific indicators must be performed using a combination of principal component analysis and multiple regression analysis. In order to investigate the area in more detail, the generic questions must be supplemented by the following type of questions: 1. Is it an honest company? 2. Is it a company doing a good job for society? 3. Is it a professional company? 4. Is it a customer-oriented company? 5. Is it an environmentally oriented company? 6. Is it an economically sound company? 7. Is it a company with a positive press? 8. Is it a good place to work? These questions will be used as regressors with the estimated image index as dependent variable.       Advantages of ECSI             As national customer satisfaction indices reliably and constantly measure customer satisfaction and quality perceptions for many companies within a variety of industries, the ECSI has the potential to be an excellent platform for comparisons between companies, industries, sectors, and countries. Benefits and practical implications of the ECSI would be evident at different level. For individual companies, ECSI will be a useful tool in three different ways: 1. Tracking performance over time 2. Benchmarking 3. Diagnosing the effects of various quality initiatives The ECSI will be able to answer the key questions in today’s business environment: 1.  What are the customers’ perceptions of quality of products and services? How satisfied are they? How loyal are they?  2.  Is customer satisfaction and perceived quality improving or declining for the company?  3.  How is the company performing relative to competitors in the industry? And relative to companies in other industries, sectors and countries?  4.  What is the economic value of the customer base?  5.  What are the drivers of customer satisfaction and customer loyalty? What is the impact of the different drivers?  6.  What is the effect of different quality initiatives on customer satisfaction, customer loyalty, and the value of the customer base?  7.  What is the optimal allocation of resources across alternative quality initiatives?  8.  What will the consequence be to improve perceived quality and customer satisfaction?     Basic ECSI model   Credit:ivythesis.typepad.com

Non-Financial Performance Measures

Non-Financial Performance Measures Customer Satisfaction The evaluation of the value of a company is traditionally based on...

360 Degree Feedback on the Internet

360 Degree Feedback on the Internet             As developmental tools, 360-degree feedback interventions have received a lot of attention in human resource management during recent years. Developmental feedback provided by these interventions is maximally useful if feedback recipients not only react to the interventions with favorable attitudes, but also if they respond to the feedback by pursuing constructive developmental activities designed to enhance their skills. (1995) have discussed how feedback can lead to subsequent skill development and how variables such as individual differences and situational conditions can moderate this relationship. However, relatively little research has examined the linkages between 360-degree feedback and subsequent developmental responses by participants, therefore little is known about which feedback recipients will respond most constructively to and about which types of work contexts are likely to foster constructive responses.             One purpose of 360-degree feedback is to heighten the manager’s serf-awareness of his/her skills. This is partially accomplished by allowing the manager to compare his/her own self-ratings to those of other raters. Thus, the discrepancy between self and others might be an important aspect of the 360-degree feedback intervention. Managers who rate themselves highly but who receive low ratings from others might become distressed by the negative discrepancy between their rating and the feedback (1991). As a result, individuals presented with negative feedback from others tend to rate the feedback less favorably (1995). Furthermore, the distress motivates individuals to reduce the negative discrepancy (1999; 1996).             In the traditional performance appraisal process, supervisors and subordinates develop a work plan at the beginning of performance cycle, the subordinates carries out the work plan, the supervisor provides a midcycle review, and, at the end of the cycle, the supervisor provides feedback indicating how well the subordinate has fulfilled his or her work plan. However, with this process it may not have all of the information needed to provide complete and accurate feedback to the subordinate. If the individual is a manager who supervises others, these subordinates may be the best source of information on delegation, communication, and leadership skills. Peers may be in the best position to provide feedback on skills such as working with others, decision-making and technical capability. Finally, customers may be the best source of input on quality of work and service orientation.             An Internet-based 360 degrees feedback system can also produce the information needed for coaching and individual developmental plans much faster than the typical paper-and-pencil evaluation. The speed gives added time for coaching and the fresh data adds the employee motivation. In addition, the data from 360-degree feedback can lead to improved leadership when combined with effective coaching that yields solid individual development plan.             However, once the internet-based 360 degrees feedback system is implemented, there are some problems realize by Otis Elevator. These involve intranet firewall, browser, old and new versions of software, the computer sophistication of appraisers and customers and the ability of employees to process feedback.             Like some other corporate computers, Otis was protected by an elaborate firewall and in order to get access this requires the work of Technical Computer services to eventually permit network access to all appropriate parties.             Another problem involved several appraisers who experienced problems with the internet/intranet browser compatibility. They needed to use common browser software. Rapid development of new software makes compatibility an ongoing issue.             In addition, some appraisers could not access and complete surveys. Another is that appraisers had overstated their skills. All appraisers who were not very familiar with computers had to buddy up with other knowledgeable employees to help them catch up. Another problem involved customers who were invited to do rating but were completely unfamiliar with accessing the internet using their computers.             Moreover, another key issue arose when employees received their feedback profiles. Many had trouble understanding their feedback and many lacked the skills needed to produce a solid individual development plan (IDP) using their feedback.             In conclusion, this case demonstrates that Internet-based 360-degree feedback provides clear advantages to assess the leadership skills of managers. Advantages include minimizing paperwork, saving employees’ time, preserving employee anonymity and providing timely, informative feedback that facilitates development. Implementing 360-degree feedback via the Internet breaks down the barriers imposed by traditional assessment systems. However, it presents its own obstacles, especially related to the interaction between people and technology, or in other words, the “human factor.”             Internet-based implementation of 360-degree feedback is definitely worth pursuing if the organization is prepared to deal with the human factor and ready to follow up with coaching and development.       How can the management of diversity affect a company’s performance? Explain.                 Managing diversity is a long-run investment, and an organization faces a level of adaptation and transformation equivalent to that encountered during deregulation or a major technological change ( 1993). However, despite these trends, research related to diversity practice’s impact on organizational performance remains lacking. Workforce diversity has been depicted as a field absent a theoretical foundation (1995). (1996) point out that the word diversity means “variety” and the degree that things differ. Thus, diversity management implies the ability to manage heterogeneous groups.             Diversity becomes a significant organizational objective and diversity management becomes particularly salient because of the natural tendency toward homogeneity in organizations. (1987) Attraction-Selection-Attrition hypothesis (ASA) suggests that organizations tend to attract, hire, and retain similar types of people. The model then suggests that diversity affects firm effectiveness depending upon business and human resource strategy, as well as the environment. Diversity represents bringing different backgrounds, cultures, and generations into the same organization. This variety of perspectives can foster creativity. On the other hand, this variety of perspectives generates inefficiencies in that diverse groups lack a shared understanding, potentially making communication slow and laborious.              (1996) reviewed the diversity literature and drew several important conclusions. Racial and gender diversity can have negative effects on individual and group outcomes. For example, group members who differ from the majority tend to have lower levels of psychological commitment, higher levels of turnover intent and absenteeism than do majority members. Also, group coordination costs, such as increased communication time, appear to increase with diversity. However, evidence exists that these effects diminish with time (1993).             There are number of studies that have found out that diversity negatively affects organizational processes and performance. Group heterogeneity, for example, has been associated with stereotyping, in-group/out-group effects, affective conflict, and turnover (2000; 1996;1992). In addition, empirical research shows that in-group demographic preference exists in organizations ( 1975; 1979; 1982). In-group preference involves favoring interaction with in-group over the out-group.  (1992) findings reveal that diversity leads to organizational detachment among white male employees.  (1996) suggest that increasing demographic variation within firms did not in itself increase organizational performance.  (1998) conclude that mismanaged diversity initiatives can negatively affect both process and outcomes             However, in contrary, more diverse groups appear to make higher quality decisions (1996). Creativity, consistent counter arguments, and the introduction of new perspectives enhance the decision-making process. (1996) also suggest that more diverse groups mirror environmental complexity and respond to its demands.               (1991) noted that effective diversity management enhances organizational flexibility. More diverse groups consider a wider variety of perspectives. As diversity policies and practices become instituted, increased fluidity and flexibility result in an organizational culture that can react to environmental changes. Thus, a diversity orientation has more positive implications for performance under conditions of environmental uncertainty than under states of environmental certainty, which suggests an interaction effect between diversity and the environment.             In sum, diversity appears to create additional coordination and control costs. However, these negative effects may diminish with time and are offset by better quality and more creative decisions. Thus, to effectively model the diversity orientation-performance relationship, the role of contingent or moderating variables deserves consideration. A diversity orientation may yield positive performance effects through the genuine integration and acceptance of diverse employee perspectives which leads to a reduction in turnover and absenteeism.           Credit:ivythesis.typepad.com

360 Degree Feedback on the Internet

360 Degree Feedback on the Internet As developmental tools, 360-degree feedback interventions have received a lot of attenti...

Measures of Operational Performance: McDonalds

Measures of Operational Performance: McDonalds    Introduction   Operational performance of McDonalds will be the focus of this essay particular on certain measures of the operational performance, as indeed there will be discussions on the supply chain performance measures and customer satisfaction performance measures as ideally functioning for McDonald’s business environment. There can be process of choosing appropriate supply chain performance measures which can be due to the complexity ofMcDonalds measures of performance. There research integration of the measuring of supply chain like, Beamon (1996), presented number of characteristics as found within effective performance measurement as analyzing the measures based on McDonald’s effectiveness, the operational performance measurement have changed over the years and that McDonalds will need to always consider the basis of performance operation measurement as there places a factor for supply chain and customer satisfaction performance that can be necessary in order to present relevant measures as McDonalds need upon Iimproving world class restaurant business performance.   Main Points: The two measures A.    Supply chain performance measure for McDonalds Supply chain management, analysis, and improvement for McDonalds is becoming important of which sector the company belongs as the measuring of supply chain depends on the supply chain logistics management at McDonalds as well as the measuring of supply chain process affecting McDonalds real world applicability. The customer responsiveness measures include lead time, stock out probability as well as the fill rate as corresponding to the operational performance measures used by McDonald as appropriate for supply chain analysis, the measuring of customer satisfaction (Christopher, 1994) with ample base pointing to supply chain performance measures (Johnson and Randolph, 1995). The use of single performance measure is attractive for McDonalds because of the simplicity and the company must ensure that if a single performance measure is utilized, the measure is being adequately describes the McDonalds system performance. Thus, Beamon (1996), have identified and evaluated various individual supply chain performance measures noted that, significant weaknesses were present into the performance measures evaluated, based on measurability and consistency. Aside, Maskell (1991) suggests that the type of performance measures required for McDonalds can be directly related to the customer service strategy chosen by the company and determine if McDonalds operational performance is meeting strategic goals and that, the performance measure will steer McDonalds business direction. For example, product quality at McDonalds can be measured in many different ways. Although it may be difficult to choose the individual performance measures, it is vital that the performance measures are related to the strategic goals of McDonalds. Consequently, important supply chain characteristics at McDonalds thus measure better customer related resources, as an integral part of McDonalds supply chain. Furthermore, flexibility is vital to the success of McDonalds supply chain, since the supply chain exists in an uncertain environment (Slack, 1991). For example, a reduction in McDonalds system resources may negatively affect their supply chain’s flexibility as McDonalds supply chain measure may be currently utilizing its resources efficiently, producing in desired output, but will McDonalds supply chain be able to adjust to changes in, for instance,  McDonalds product demand, customer service unreliability, the introduction of innovative products and or supply shortages, truly flexibility serves as an important consideration in McDonalds supply chain performance measure. B.     Customer satisfaction measures for McDonalds The customer relations manager at McDonalds is responsible for collecting the customer satisfaction information from the fast food, restaurant areas in order to access guest satisfaction information and take appropriate operational performance measures as well as impeding positive action for satisfaction performance. The McDonalds manager may routinely circulate through the restaurant and the need to talk to their customers as they are receiving performance services at its best. This is perceived to be the most critical measure for operation performance at McDonalds placing in certain solution to customer problems and improving McDonald’s current level of satisfaction. The McDonalds managers believe that observing at the time of service and talking to the customers on real-time serves as crucial element of monitoring satisfaction level of McDonald’s customer. McDonalds believe that great customer satisfaction as well as information is a valuable decision making tool as the McDonalds customer remains on the restaurant premises, encourages McDonalds  employees and managers to be responsive and communicative with customers. Amiably, feedback from McDonald’s customers after their visit, such as fax and letters is also considered as an important indicator of guest satisfaction. The real-time decision-making is implemented by McDonalds operating departments that have large degree of customer interface such as fast food services and the customer relations, as there is service delivery at McDonalds involving high degree of customer interface as McDonalds managers prefer to monitor customer satisfaction using ways of communication and observation by personal presence. As Fisher (1992, p. 21), argue that setting standards for performance measures may impose conflicts with continuous improvement at McDonalds as he noted that, ‘if standards were not carefully set, they had the effect of setting norms rather than motivating satisfaction improvement” (p. 22). However, although McDonalds has wealth of services and products that can be measured and assessed, the most critical aspect is seen to be the overall impression gained by the customers during their use of the place to dine and other reasons. McDonalds operational performance management are required to strike in strong balance between providing an overall customer satisfaction experience and operating in to several restaurant product and services and McDonalds  will achieved the success in satisfaction measure through continuous observation and real time supply chain measures by McDonald heads. The main effort of McDonald’s performance management and McDonald’s employees is to satisfy their customers on a real time basis (Fitzgerald and Moon, 1996) and essential for customer satisfaction measures at McDonalds to talk constantly to their loyal customers and receiving their reactions and responses are seen as key satisfaction measurement indicators, helpful in gaining an awareness of problems and possible complaints. Conclusion In conclusion therefore, operational performance measures for McDonalds supply chain and customer satisfaction performance integrates a solid weight in keeping the restaurant intact into the business arena despite several economic crisis that the companies face today as McDonalds current supply chain performance measurement serves an adequate measure and are being consistent with McDonalds the strategic goals and does consider the value placed by customer satisfaction grounds although the use of McDonalds supply chain performance measures may be commonplace in real restaurant settings but, not common within supply chain modeling. The next step for McDonalds can be to develop framework for measuring supply chain performance linking to satisfaction modes of customers that can be in terms of McDonald’s decision process and operational performance pattern which requires real time performance measures during operation and communication within McDonald’s operation areas  Thus, performance measurement practice in the case of McDonalds implies to customer satisfaction from within there indicates performance operation levels and McDonalds financial measures from the effective management stature. References Beamon, B.M (1996), “Performance measures in supply chain management”, Proceedings of the 1996 Conference on Agile and Intelligent Manufacturing Systems, Rensselaer Polytechnic Institute, Troy, New York, NY Christopher, M. (1994), Logistics and Supply Chain Management, New York, NY Fisher, J. (1992), “Use of non-financial performance measures”, Journal of Cost Management, Vol. 6 pp.31-8. Fitzgerald, L., Moon, P. (1996), Performance Measurement in Service Industries: Making it Work, CIMA, London Johnson, J.B. , Randolph, S (1995), “Brief: making alliances work – using a computer-based management system to integrate the supply chain”, Journal of Petroleum Technology, Vol. 47 No. 6, pp.512-13 Maskell, B.H. (1991), Performance Measurement for World Class Manufacturing, Productivity Press, Portland, OR Slack, N. (1991), The Manufacturing Advantage, Mercury Books, London     Credit:ivythesis.typepad.com

Measures of Operational Performance: McDonalds

Measures of Operational Performance: McDonalds Introduction Operational performance of McDonalds will be the focus of this essay par...