Performance Management in 5 Steps
It is easy to read about the fundamentals of a performance management system but what about actually getting a system implemented? What are the steps you need to go through to get a self-sustaining system implemented? Our system has a lot of experience adapting to various performance measure structures. This gives us a unique perspective for people looking to implement them from scratch.
From my experience transitioning new clients to our performance management system, I have found it is important to follow certain steps to get your organization up and running. Mostly it involves getting used to an activity-based cost system. These 5 steps assume you have a system to track PMs involved with the operating, personnel and capital budget so PMs can be evaluated properly. These steps are as follows: - Define your Structure. There are many ways you can define the taxonomy of you performance items. No matter how you choose to define it, you will want to set Budget level PMs and Organization level PMs. You will also want to set levels of PMs so you have an overall goal with mutliple objectives and measure to meet the goal to track it accuraretly.
- Budget & Organization Relationship Levels. Every Organization level PM should be linked with a Budget level PM as a class, category or type to keep things interrelated. For example, in the Fleet Services cost center we have a Fleet Services goal which is related with the Budget level PM of "Equipment Maintenance". Be sure to determine you priority levels
- PM Levels. Every Budget and Organization level PMs should have upper, lower, and lower-detail levels. At upper levels you define overall goals. At lower levels, you define actions needed to meet these goals. At lower-detail levels, you define the actual resources needed to meet the lower level actions whether is labor or material goods.
- Allocate Resources. For each lower-detail level PM you will want to define those resources within your budget which links with each level. For example, you have a Goal "Equipment Maintenance" with an Objective "1. Keep Cars functional" with a Measure "1. Rotate Tires every 6 months for All Cars". You will want to define the person and number of hours required to meet this measure annually. This helps you determine the cost associated with this activity.
- Communicate your Structure. Once you define your PM levels and relationships, each cost center must define their own organization level PMs which relate to the overall Budget PMs. They must ensure all PMs can be collected, validated an evaluated.
- Accountability. In each cost center there must be a responsible party to track all PMs real-time. This ensures work is aligned with desired results, data is accurate and sustainable and PMs can be evaulated in terms of effectiveness.
- Sustainability. All PMs must ensure that they can be easily sustainable in the future based on cost. The highest return for PMs should be investigated to yield higher returns in other areas.
- Define Responsible Persons. For each cost center define a person to handle PM tracking and updating real-time.
- Implement & Track. Using your integrated budget system, ensure that all budget systems or applications enforce the PM rules you have defined. Ensure the responsible person is tracking any PM levels over time to accurately track data.
- Maintain. It is important that all PM levels can be evaluated in terms of budgetary inputs vs. outcomes. As you evaluate, determine if better input vs. outcome measures are needed. Perhaps you need better process or staff management for next year to meet these PM levels? You might need more meetings, follow-up assessments , better data collection and analysis or better benchmarking practices.
- Reward. How do you reward/punish meeting your PMs in a cost-effective manner? Is there a better way to enforce participation? Can you set provisions for meeting/not-meeting performance?
Please review this document and see if it helps you. If not, our team can always help you to implement a better Performance Management system.
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Version 3.0 for 2012!
After gathering specifications from our budget users and surveying departments across the country in budgeting best practices blogs we have gathered a wide range of requests that people want in their budget software. One of the most commonly mentioned item was that people want to easily visualize their data directly from the application and have the ability to extract the visualization into excel or pdf.
In response we will be adding a tool so that users can create varying pivot-grids, charts and perform other data analysis directly within our web-based application without needing to export the data to excel or a report building tool. Users can pull the data they need into rows and columns to create an on-the-fly visual analysis without knowing any code or learning how to create their own reports. No more macros or excel functions - this tool will handle it all utilizing a user interface even the most technological neophyte can understand.
This is just one improvement added to the long list of improvements we announced within our last newsletter:
- Improved Popup Windows - add/edit accounts, line items and text information for your business units within a single page.
- Report Writing - our Report Writing tool allows users to create their own budget reports in addition to our standard Crystal Report offering
- Excel Integration - allows users to pull data from the database into excel, manipulate and analyze data and push the data back into the database
- Document Importing - import all documents whether they be word, pdf, powerpoint or excel associated with any record
- Improved Administrative Tables Navigation - allows for users to make changes to back-end calculations from a single page
- Report Security - restricts data access within reports to the data the user is restricted to access within the application
- Mass Personnel Changes - add raises, benefits and paycodes to large numbers of personnel at once for your one time pay additions.
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