...THE USE OF OPERATIONS OBJECTIVES AND PERFORMANCE MEASURES IN PRIVATE AND PUBLIC ORGANIZATIONS White Paper February 15, 2010 Prepared for: Federal Highway Administration Federal Transit Administration FHWA-HOP-10-029 Quality Assurance Statement The Federal Highway Administration (FHWA) provides high-quality information to serve Government, industry, and the public in a manner that promotes public understanding. Standards and policies are used to ensure and maximize the quality, objectivity, utility, and integrity of its information. FHWA periodically reviews quality issues and adjusts its programs and processes to ensure continuous quality improvement. Technical Report Documentation Page 1. Report No. FHWA-HOP-10-029 4. Title and Subtitle The Use of Operations Objectives and Performance Measures in Private and Public Organizations White Paper 7. Authors Jocelyn Bauer, Kelley Pecheux, Michael Smith, Zachary Fletcher 9. Performing Organization Name and Address Science Applications International Corporation (SAIC) 8301 Greensboro Drive McLean, VA 22102 12. Sponsoring Agency Name and Address United States Department of Transportation Federal Highway Administration 1200 New Jersey Ave., SE Washington, DC 20590 15. Supplementary Notes Mr. Richard Backlund, Federal Highway Administration, COTM 16. Abstract This paper examines lessons and insights from private companies and public organizations that may apply to agencies in the United States working to advance transportation...
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...com/business-school-cases/citibank-performance-evaluation-case-analysis/ Citibank: Performance Evaluation Case Analysis November 21, 2010 James McGaran’s Performance Evaluation. Doing the year-end performance evaluation for James McGaran, the branch manager of the flagship office in the Los Angeles area, was probably one of the most difficult experiences in all my years with Citibank in the capacity of area manager. James has been not just an exemplary employee in our area, but really someone who other branch managers could always look up to. His career with Citibank has been a quick progression through the ranks from the assistant branch manager to the manager position at the most important of all the bank branches in the Los Angeles area – the Financial District office. Until this year his performance exceeded expectations in every single year. His financial results have been truly impressive. However with the introduction of the new performance scorecard which reflected the company’s broadening of the evaluation scope to customer satisfaction score, it became obvious that this was essentially the only area where James’ performance was lacking. At the same time Frits Seegers, President of Citibank California, was convinced that customer satisfaction indicator was important not only for meeting ever-increasing expectations of highly-sophisticated clients, but also for achieving strategic goals of the division, and staying competitive. Since five of the six performance measures in James’ year-end...
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...A Review of Project Performance Measurement Introduction The management of engineering projects in any type of industry is becoming a challenge to professional engineers and technical managers as competitions for business opportunities arise in an increasingly competitive market place for effective project management and control systems in compliance with clients’ contractual requirements. Never before have the pressures on project managers been as great as they are today to successfully satisfy the criteria of time, cost and quality in the completion of the projects for which they are responsible. Delayed Projects cost 1, 64,000 direct jobs and Rs. 2.5 lakh crore investment says ASSOCHAM. India lost the job opportunities of employing more than 1,64,000 people with eighteen major projects in sectors like steel, power, auto getting stuck due to procedures relating to land acquiring and forest & environment clearances, an Assocham Eco Pulse (AEP) Study has stated. According to AEP study “Delayed Projects and lost job opportunities”, the 18 strangled projects of India Inc. to the tune of Rs. 2,44,815.5 crore remained on papers, in the form of MoUs and agreements over the past three-four years, however the smooth implementation could have created job opportunities for at least 1, 64, 000 people directly and 2,70,000 people indirectly. The technology being used in today’s projects is increasing in complexity as the state of the art of technology is being pushed to the limit...
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...Financial Strategy Chapter 6 Objectives and Goals * Financial – not necessarily profits, but return on investment (ROI) – primary focus. * Societal – helping to improve the world around us. * Personal – self-gratification, status, respect. Components of Strategic Profit Model Strategic Profit Model: An Overview It is a method for summarizing the factors that affect the firm’s financial performance as measured by ROA. The model decomposes of two components: 1. Net Profit Margin – is simply how much profit (after tax) a firm makes divided by its net sales. It reflects the profits generated from each sales. 2. Asset Turnover – is the retailer’s net sales divided by its assets. This assesses the productivity of a firm’s investment in its asset and indicates how many sales are generated by each dollar of sales. This two components is determined by two set of activities, profit management and asset management, and that high ROA can be achieved by various combinations of net profit margin and asset turnover Retailing View Summary: Federal Department Stores vs. Costco Federated Department Stores operates two national department store chains, Macy’s and Bloomingdales’s. Like other department store chains, Federated offers a wide variety of fashionable apparel and home furnishings, a relatively high level of customer service provided by its sales associates and an attractive shopping environment. Costco’s warehouse stores, in contrast...
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...Chapter 2 |The Balanced Scorecard and Strategy Map |[pic] | QUESTIONS 2-1 Financial performance measures, such as operating income and return on investment, indicate whether the company’s strategy and its implementation are increasing shareholder value. However, financial measures tend to be lagging indicators of the strategy. Firms monitor nonfinancial measures to understand whether they are building or destroying their capabilities—with customers, processes, employees, and systems—for future growth and profitability. Key nonfinancial measures are leading indicators of financial performance, in the sense that improvements in these indicators should lead to better financial performance in the future, while decreases in the nonfinancial indicators (such as customer satisfaction and loyalty, process quality, and employee motivation) generally predict decreased future financial performance. 2-2 A Balanced Scorecard is a systematic approach to performance measurement that translates an organization’s strategy into clear objectives, measures, and targets. The Balanced Scorecard integrates an appropriate mix of short- and long-term financial and non-financial performance measures used across the organization, based on the organization’s strategy. 2-3 The four measurement perspectives in the Balanced Scorecard are (1) financial, (2) customer, (3) process, and (4) learning and...
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...OF FINANCIAL MANAGEMENT S T A T E O F W A S H I N G T O N PERFORMANCE MEASURE GUIDE BUDGET DIVISION AUGUST 2009 Table of Contents What is a performance measure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Why do we need performance measures? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 What are characteristics of good performance measures? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 Where do we start to develop performance measures? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Are there other types of performance measures we should consider? . . . . . . . . . . . . . . . . . . . . . . . . .8 How many performance measures should we have? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 How do we narrow down the list of potential performance measures? . . . . . . . . . . . . . . . . . . . . . . .10 How do we write a performance measure? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11 How do we set meaningful performance targets? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12 What is the difference between a target and an estimate? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 How do performance measures relate to OFM budget processes? . . . . . . . . . . . . . . ...
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...Economy, Efficiency and Effectiveness as Performance Indicators in Government Agencies Table of Contents Executive summary 3 Introduction 4 Economy 4 Effectiveness 5 Efficiency 6 Conclusion 7 References…………………………………………………………………………………………………………………………………..8 Executive summary Evaluation of performance is part of managing performance. Public agencies use economy, effectiveness and efficiency to determine performance. All these three parameters relate to inputs and outputs of the agency (Cutler, Cutler & Waine, 1997, p. 98). However, measurement of inputs and outputs presents some challenges. Thus, during measurement of performance of a public agency one has to make a choice of what to measure among the three parameters in order for performance to be evaluated effectively. For instance, economy relate to input, efficiency relate to input and output while effectiveness relate to output (Chai, 2009, p. 45). Thus, the effectiveness of these concepts in determination of performance depends largely on the methods adapted to measure indicators of these parameters. Introduction The process of managing performance involves setting social outcomes and strategic plans that entails focusing strategic plan on social outcomes, identifying value drivers, focusing managerial attention on activities...
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...unique performance measures The Accounting Review, 75 (3), 283-389. (on CMD) Overview: Lectures 6 & 7 explore the use of Kaplan and Norton’s Balanced Scorecard (BSC) as a strategic performance measurement and evaluation method. Lecture 6 introduces the BSC by providing the performance measurement context, defining financial and non-financial and lead and lag indicators, and providing an overview of the four perspectives of Kaplan and Norton’s Balanced Scorecard. Lecture 7 explores and demonstrates the process of BSC development via strategy maps and KPI selection, before discussing the key findings of BSC-related research. Lectures 6 & 7 are structured as follows: Lecture 6: 1. Introduction 2. What is the BSC? 3. The four perspectives Lecture 7: 4. Strategy maps 5. Creating a BSC 6. What does the research say? 1. Introduction a) Performance Measurement Performance measurement serves the following purposes: Evaluate performance, and provide rewards Communicate the strategy, plans Allow managers to track their own performance against targets and take corrective action Guide senior managers in developing future strategies and operations. Traditional Performance measurement focuses on financial performance measures. The problems with this include: Financial measures emphasise only one perspective of performance. Conventional financial performance measures focus...
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...Job Analysis Deborah Fischer-Hansen PSY/435 April 16, 2013 Deborah Hesselbein Job Analysis Job analysis refers to an approach for explaining a specific job and the tacks necessary to fulfill the requirements of the job. One of the main goals is to define the requirements and characteristics of a particular job. The job analysis needs to consider who, what, where, when, and how the job might relate to an individual. Many methods provide different types of information about the jobs and human attributes needed for jobs (Spector, 2012). There are two different categories of job analysis; they are job oriented and person oriented (Spector, 2012). Job oriented emphasizes the responsibilities needed for a job, whereas, person oriented concentrates on the individual particular characteristics needed for the job. The author will further discuss a job with Trinity Teen Solutions, specifically life coach for struggling teen girls and young women. Life Coach Job Analysis Life Coaching is a profession that compliments consulting, mentoring, therapy, and counseling. According to "What Is Life Coaching?" (2012), the coaching process addresses specific personal projects, business successes, general conditions and transitions in the client's personal life, relationships or profession by examining what is going on right now, discovering what your obstacles or challenges might be, and choosing a course of action to make your life be what you want it to be. The...
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...elements of the organization’s strategy, including Strategic Results, Strategic Themes, and Perspectives, are developed by workshop participants to focus attention on customer needs and the organization’s value proposition.Step Three: Objectives In Step Three, the strategic elements developed in Steps One and Two are decomposed into Strategic Objectives, which are the basic building blocks of strategy and define the organization's strategic intent. Objectives are first initiated and categorized on the Strategic Theme level, categorized by Perspective, linked in cause-effect linkages (Strategy Maps) for each Strategic Theme, and then later merged together to produce one set of Strategic Objectives for the entire organization. | | | Step Four: Strategy Map In Step Four, the cause and effect linkages between the enterprise-wide Strategic Objectives are formalized in an enterprise-wide Strategy Map. The previously constructed theme Strategy Maps are merged into an overall enterprise-wide Strategy Map that shows how the organization creates value for its customers and stakeholders.Step Five: Performance Measures In Step Five, Performance Measures are developed for each of the enterprise-wide Strategic Objectives. Leading and lagging measures are identified, expected targets and thresholds are established, and baseline and benchmarking data is developed. | Step Six: Initiatives In Step Six, Strategic Initiatives are developed that support the Strategic...
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...products: grinding media and carbon wire rod. In January 1991, a new performance measurement system for Kansas City Works was implemented by Bob Nenni, the Director of Finance, with the aim of providing managers the best information that would better enable them to enhance company performance. According to Mr. Nenni, the new system was designed so that managers would prioritize certain key objectives and not the numerous details provided by the old Operating Statistics Report that they have used in the past. The new system also aims to provide an improved basis for evaluating operating managers and manufacturing supervisors. This includes a balanced set of performance measures, including quality, schedule achievement, and safety, in addition to costs. The cost reports were changed to include only those that are controllable by each individual operating manager. Lastly, one of the most significant changes from the old system is the elimination of the Cost Above measure, therefore decreasing the cost detail in the new performance reports considerably. Although the new system intends to help the managers and increase their focus on relevant data, some are still complaining and dissatisfied because of the lack of information and lack of details that they have been accustomed to. Some actually prefer having the old system back, wherein monthly and annual trends are shown that allows them to compare actual costs with objectives. According to one manager, the old report provided “the minimum...
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...way it provides a structured focus upon the main organizational performance dimensions: the financial, customer, internal processes and learning and growth. Balanced scorecard thinks far beyond the traditional financial system, so that hotel appears the appropriate setting for implementation of the balanced scorecard. The first step in developing a balanced involves is determining a mission or vision. A vision outlines the purpose of an organization. After vision, we need to determine what strategy will be employed to achieve the mission. After strategy we need to translate this strategy into specific strategic objectives. If the strategic objective of staff is to be regarded among most friendly, appropriate performance measures could include: hours s pent to train staff on politeness and friendly customer engagement, customer survey ratings with respect to perceived friendliness of staff. As strategic objectives and performance measures would need to be developed for each of four balanced scorecard’s key perspectives. a] Financial perspective in hotel: The financial perspective contains strategic objectives that are developed from shareholder’s perspective. Kaplan and Norton suggest these objectives can be developed by answering the question: To succeed financially, how should we appear to our shareholders! Once these objectives have been developed, a set of financial measures generated. The financial measures includes departmental cost, cost of providing a room night, hotel...
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...Citibank : Performance Evaluation “Performance management is about creating relationships and ensuring i l i hi d i effective communication Its about focusing on what organisations, managers and team members need to dt b dt succeed” - Robert Bacal Performance Management Why do even best of great strategies fail? A study of 275 professional portfolio managers reported that the ability to execute strategy was more important than the quality of the strategy itself (“Measures That Matter,” Ernst & Young, Boston, 1998) (“M Th t M tt ” E t Y B t In the early 1980s, a survey of management consultants reported that less than 10 percent of effectively formulated strategies were implemented successfully (Walter Kiechel, “Corporate Strategists Under Fire,” Fortune, Dec. 27, 1982). A 1999 Fortune article, in a cover story of prominent CEO failures, concluded that the emphasis placed on strategy and vision created a mistaken belief that the right strategy was all that was needed to succeed The authors concluded that “…in succeed. in the majority of cases—we estimate 70 percent—the real problem isn’t [bad strategy]…it’s bad execution.” (R. Charan and G. Colvin, “Why CEOs Fail,” Fortune, June 21, 1999). , , ) Q 1 : Why has Citibank introduced a Performance Scorecard Components of a Scorecard Perspectives: six perspectives on enterprise performance (Financial, Strategy Implementation, Customer satisfaction, C t l , People and ti f ti Controls P l d Standards Standards) Involvement...
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...follows : A. Determine Specific Sales Objectives of Position to Be included in Plan For a sales commission plan to succeed, it must be designed to encourage the attainment of the business objectives of the component division. Before deciding on the specific measures of performances to be used in the plan, the component should review and define its major objectives. Typical objectives might be : * Increase sales volume * Do an effective balanced selling job in a variety of product lines * Improve market share * Reduce selling expense to sales ratios * Develop new accounts or territories * Introduce new products. Although it is probably neither desirable nor necessary to include all such objectives as specific measures of performance in the plan. They should be kept in mind at least to the extent that the performance measures chosen for the plan are compatible with an do not work against the overall accomplishment of the component’s business objectives. B. J Also, the relative current importance or ranking of these objectives will provide guidance in selecting the number and type of performance measures to be included in the plan. A plan that is difficult to understand will lose a great deal of its motivation force, as well as be costly to administer properly. For those who currently have a variable sales compensation plan(s) for their salespeople, a good starting point would be to consider the measures used in those plans. Although the measurements...
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...Metrics Program Positively Affect a Business? Business Metrics 2 Executive Summary In my paper titled “Can a Metrics Program Positively Affect a Business” I will establish the various reason that it positively can affect a business. A metrics program is defined as a standardized measure with a known boundable definition using a standardized unit of measure that is captured in the same manner every time across time. Metrics programs are typically implemented in a business to show how well the organization process are working, to enable the continuation of the organization, and to ultimately keep our jobs. There are also various parts of the com[any that a metrics program effects. I will go into these in to more depth. There are also various stakeholders that are positively affected thru the metrics program. By establishing that metrics are a positive realm for a business I hope companies will adopt metrics programs more widely. Business Metrics 3 Can a Metrics Program Positively Affect a Business? A metrics program is defined as a standardized measure with a known boundable definition using a standardized unit of measure that is captured in the same manner every time across time. Metrics programs are typically implemented in a business to show how well the organization process are working, to enable the continuation of the organization, and to ultimately keep our jobs. “Metrics allow internal and external evaluation of...
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