PERFORMANCE MANAGEMENT
(HBS Solutions Ltd. July 2006 by Bora Büyük)

 Managing plant operations has become ever more complex. It demends extreme efficiency and high quality production, while remaining flexible to changes. Required response times are becomming extremely short. At the same time production management and process control are becomming digitized and networked. Job tickets and logging on paper is disappearing.

 Organizations have been doing performance management for years, arguably even before computers arrived on the scene. However, the traditional version of performance management involved an implicit management strategy that was followed up by measurements of customer service, sales and order-fullfilment functions. It did not seek to integrate the varied components of performance or to develop proactive core processes. Today, organizations realize they must integrate methalogies and their supporting systems, visually display measurements and apply predictive analytics to all their processes. This is the new version of performance measurement.

 As organizations realize that performance measurement is really much more about, improving performance, rather than just controlling and managing it, they begin asking, “ Where do we begin to take what we already do to, a much higher level?”

 In this changing enviroment, proper understanding of how to automate and improve the effectiveness of workforce process is significantly impeded by the lack of leader ship and investment in organizations. Assesing the potential of workforce management practices to automate and improve the processes and performance of employees is rapidly becomming a top issue for finance and operations executives. Leveraging employees as human capital assets is essential for improving business and operational performance. The challange is that this imperative is not always a priority and is not given enough credence and investment to ensure an optimal outcome.

 Organizations need to determine where to link their process and system investments for optimal workforce management. To take a workforce management initiative seriously, you must fully asses performance management, meaning ability to provide flexible reporting and analyses of employees from a cost and performance perspective to determine their potential value. It is clear that measuring and monitoring true performance will automate and improve business process will increase the value employees bring to the organization.

 For true performance management first of all employees must know what they need to do to perform their jobs successfully. Expectations of employee performance are established through targets and standarts contained in employee performance plans. Targets tell employees what they have to do and standarts tell them how well they have to do it. Developing targets and standarts that are understandable, measurable, attainable, fair and challanging is vital to the effectiveness of performance management.

 If a true peformance and efficiency management system is ongoing management will be generally satisfied that;
* The team or shift leader periodicly initiates ways to reduce costs,
* The team or shift leader provides dicipline fairly and consistently,
* Employees understand the department’ s goals and how their performance effect these goals,
* Employees understand how they are performing against their individual targets and standarts; and
* Employees receive rewards for good performance.

Also developing successful performance measurement systems is a lengthy but rewarding process. Lessons learned by organizations with effective balanced measurement systems include;

* Design the measurement system with clear, agreed upon strategy,
* The leadership team must be involved in and support the measurement system,
* Keep it simple- develope measures that everyone can understand,
* Communicate the results of the measures in order to reinforce the strategy,
* Link the measurement system to teams and individuals so that they have a clear line of sight to organizational goals,
* Make the measurement system the centerpiece of the management review process.

 Manufacturers across all vertical sectors are seeking higher and higher levels of performance on the plant floor through greater agility, more throughput, improved quality, higher levels of efficiency, increased availability, and enhanced safety. At this point organizations need good communication channels and they need innovative tools. For true performance management the key point is setting the standarts, clearifiying performance targets and manage through data collection systems. And when they use flexible, realtime based and proactive  performance management tools they can just leverage the benefits they gain through the system.