Project_Management_Final_Assignment

Mgt 437 –Project Management Final Individual Assignment Performance Measurement Paper Laura Harper University of Phoenix March 9, 2009 Terry M. Ganzel . The Purpose of this paper is to describe the concepts of performance measurement of a project in project management in the public sector. The concept of Performance Measures may be new to many of the performing Organizations. If there are not performance measurements and it does not exist in an organization, the Project Manager may want to develop a system to help prove the effectiveness of his/her own project. In doing so, the Project Manager might be able to also contribute to the process of many improvements within the organization. Is there any relationship between organizational performance and individual or group incentives to contribute to organizational performance' In many organizations, projects are selected because they enhance operational performance. For example, a project may be intended to reduce cycle time, or improve the time for market or increase customer’s satisfaction. The Project Manager must understand how to extend and to what extent the performance of his/her project is expected to improve organizational performance, and how the project’s effect will be measured. Performance Measures have three ways to measure the performance and this measurement should identify the population to be measured, the method of the measurement, and the data source and time period for the measurement. Each Measurement should also be: (1) objective, (2) easy to understand, (3) controllable by minimizing outside influences (4) timely, (5) accurate (6) cost-effective, (7) useful, (8) motivating, (9) track-able. Listed are several types of performance measurement that will measure performance in projects in the public sector. These measurements are Performance measure, Performance Measurement, and Output measures, and Input measures. Here are the comparisons and the contrast of Performance Measures to Performance Measurement this difference of Measures and Measurement will be explained below as follow: (a) Performance Measures: have ways of measuring quantitative or qualitative in ways to characterize and define performance. These are the tools that are provided, is a tool for organizations to manage the progress towards the organization to achieve predetermined goals, by defining key indicators of organizational performance and the customer’s satisfaction. (b) Performance Measurement is the process where the assessing of the progress made (actual) towards achieving this predetermined performance goals (baseline). Measurement is managed in ways using output measures and outcome measures. I have made a comparison between the Output Measures to the Input Measures, these measures difference will be explained as follows: (c)Output measures are ways that the calculations of recorded activity or whether the effort expressed quantitatively or qualitatively. (d) Outcome measures are an assessment of the results of a program compared to its intended purpose. 4 The Balance Scorecard of the performance measurement There are many different measurement frameworks, The framework includes a balanced scorecard, consisting of an activity based costing, a competitive benchmarking, there’s also a shareholder value added. Each of these scorecards is viewed through a unique and different lens, which views an organization’s performance. Most frameworks by their perspective tend to be of one dimensional. For example, with benchmarking it usually tends to involve taking an external perspective largely, and is often comparing performance with competitors or other best of breed practitioners, or business processes. This kind of activity is pursued frequently to help generate ideas or exercises to obtain commitment to short term improvement initiatives rather than to formalized or design performance measurement system. Whereas, the balanced scorecard is a type of measurement framework which integrates multiple perspectives. The balanced scorecard integrates with four sets of measurements, These measurements consist of complementing traditional and financial measures with those driving the future performance. An organization that’s using this type of framework has been encouraged to develop the metrics that facilitate collections and analysis of information from the following perspectives: These metrics consists of, Financial, Customer, Learning and Growth, The Internal Business Processes. With these implementation of a balanced scorecard being presented an opportunity for the performing the organization to look at all of its existing programs, These existing programs consist of services, and processes. Are we providing the right services to our customers' (Are we doing the right things') Are these processes of implementations are the most efficient with the cost. We have to remember, that these performance measurements is provided with a mechanism for the organization to manage the non- financial and the financial performance of the organization. With this accountability there’s the increased and the enhancement, ensuring that the projects will support the organizational needs and have a better strategy that can make this better services and give the greater satisfaction that can be provided to the customer. The performance that is measured and is reported will improve with time of the effectiveness that they can be measured' (Are we doing the right things'). The specific measures which, is the (metrics) are development which can be analyzed to provide all the answers to these questions. Once the appropriate metrics have been identified, the data collection and the tracking processes are then put in place, the organization can and will begin to adjust its practices and evaluate its performance overtime. There’s a continuous feedback loop formed, in which the organization can use the measurement information to re-align initiatives as needed. The scorecards are the effective way in aligning an organization’s business areas and the activities with its overall strategy, with identifying critical financial and non-financial measures, which is the identifying cause-and effect relationships among these measures, that may aid in the problem of the diagnosis and will encourage accountability across the organization. Performance Measurements in the Public Sector begins while a large initiative to execute and improve organizational business processes in the New York’s Worker’s Compensation Board recognized the need to measure the performance within the organization. This organization dramatically expected to improve their operational effectiveness, but had to find a way to proved it, but how could that be proved' The volume of work that was performed was the only measurement that has being calculated, and this did not reflect any other aspects of organizational performance. By the identification and implementation performance measures the Board decided that it would also be able to measure the effectiveness of the operational business processes for improvements. The business processes for the improvement being implementation were going to affect the entire organization. The Board was challenged with identifying and developing the performance measures that would be widely applicable. The appropriate metrics were needed for the Executive Management, Performing Organization Management, Project Management, and individual Project Team members. It became very apparent that the implementing of the Performance Measures was the level of details required, that would become a project in itself! The Board assembled a Project Team That was in charge with: Defining Performance Measures - Team members then quickly realized that while there were many ideas and methods for performance measurement already existing, it would require some effort to find the ones that would work best for them. Section II: 4 NYS Project Management Guidebook Formulating the Project Scope - The team needed to identify the business areas that would be involved in or that will be affected by the project and obtain the buy-in from the appropriate members of Executive Management. Identifying the Project Approach - Two teams were formed. The Measures Team was responsible for the developing measurements, the analyzing measurement results, the recommending processes for improvement, and the producing deliverables. The Strategy Team was the liaison between the Measures Team and Executive Management and would ensured regular communication and the contact among all involved parties. Developing a Plan - The team assembled a plan that would be documented a phased approach to implementing Performance Measures within the organization. Earlier phases concentrated on measurements at a conceptual level. Detailed measures, measurement targets, data, and required reports were also defined during subsequent phases. The outcome of the project was to be a set of all the detailed reports containing the information that would drive the process improvements; this would be consistent with the strategic vision of the organization. To enable the integration of the performance to be measures into management programs within the organization, these reports would need to be readily produced and very easily available to managers and to the staff. By identifying Risks - early in the project, the team identified and also documented potential risk events that might be the barriers to the success of the project, and just might be formulated plans to mitigate the risks if this should occur. Some of the risk factors included: Organizational inertia, was: Fear, Availability of funding, Availability of data, Lack of skills necessary to implement process Improvements, Evaluating Best Practices - The team then contacted state agencies and other public sector entities to gather and to evaluate existing best practices for Performance Measures. During these beginning stages of the Worker’s Compensation Board project, however, during this very few, successful implementations existed in the public sector. Section II: 4 NYS Project Management Guidebook Without a system of Performance Measures available “out of the box,” the team then formulated a methodology that drew heavily upon the concepts of the balanced scorecard. The team discovered that there are a number of factors affecting measuring the performance in a public sector the enterprise that require a customized approach to implementing the balanced scorecard. Most public sector organizations are in the business for the policy, not for the profit, whereas for-profit organizations this would supplement extensive and standard measures of the financial performance with the other perspectives of the scorecard. In addition, it was difficult to reconcile the business processes and the improvement notion to "measure the process, not the people" within a system of measuring performance, that would encourages the linkage between strategy, which is the process and individual performance. Also, the limited number of measures that will be recommended by the methodology may not necessarily allow a public sector organization to meet the public’s demand for the information on how the organization was performing. Once this upfront planning is complete, then the team categorized the business and the functional areas that would be measured and would be developed, there would be a mission statement for each. Team members will then agree upon the criteria against which all proposed Performance Measures that would be assessed. Depending upon the factors that are to determine success of the business or any functional areas being measured, the potential measurement criteria were then narrowed down to a key set. The team then refined the key set of measures by defining and expressing them in terms of the target goals, based on the long-term vision of Executive Management. These goals were then refined throughout the course of the project. The list of measures numbered up to only 50, but when the data was leveled, then trended, sliced, and diced, it translated into 300 reports! It was then also necessary for the team to define a way to deliver the information that was contained in the reports in a way that would be meaningful and could be translated into process improvements. Data were then grouped into reports that were appropriate to the selected audience: Executive Management, Performing Organization Management, Project Management, and individual Project Team members. Standards were also defined to report data in a valid, which is a user-friendly way, of displaying the information as it’s related to defined target goals. With the support of Executive Management, these business process improvements was based upon the data collected and reflected in Section II:4 NYS Project Management Guidebook For example: As for the report, the average time that was required after the results of the re-engineering into a index case at the Board dropped from 31.4 days to 16.5. After the implementing Performance Measures for this process, the average days dropped again to 6.7, with the ongoing best practices district achieving an average of only 3.4 days. The number of cases resolved through these informal processes increased from 2100 per month to 3750 per month. Shortly after implementing Performance Measures, with fewer claims examiners, the number increased to 5000. Despite a an increase in volume of 300% of Administrative Determinations that was produced by Worker’s Compensation Claims Examiners, the Administrative Determinations approval rate remains above 95%. Every area of the Board’s operations related to handling claims for benefits and saw the improvement almost immediately after implementing Performance Measures. Although the Board’s Electronic Case Folder which is (the technological cornerstone of the OPTICS project) which is nearly 4years old, through continuous improvement activities through the Performance Measures the Board continues to see great improvement in its business processes. There is areas not yet measured which continued and was noted by the Worker’ Compensation as a result of successfully implementing a performance measure system which in terms was an important lesson well learned. The Performance Measures system: Strong executive sponsorship is critical in order to resolve policy and strategy issues that arise when an organization attempts to implement a successful Performance Measures system. In fact, some propose that “Leadership” should be added as a fifth perspective to the balanced scorecard for public sector organizations. Measures should come in sets. Measures drive behavior and, therefore, balance must exist not only between the components of the framework but within each component. It is easy to develop measures – the challenge is defining the right set of measures that tie directly to the strategic vision for the organization. Section II: 4 NYS Project Management Guidebook. Measures must be few in number, have quantifiable goals, and be derived from what drives operational success in the organization a Set targets! If you cannot establish a target for a proposed measure you must ask the question “Why do we measure this'” If meeting the performance goals of the strategic vision is not possible at the outset, establish pragmatic targets for today. Review these targets periodically and increase them over time until they meet the vision. If you do this, you have established a culture of continuous improvement! Measures must be produced more frequently than an annual report these reports should be produced within set times which should be earlier than an annual report. By reporting standards can reduce the learning curve and ease the process of implementing Performance Measures in the field. Measures should, wherever possible, be involved in the individual performer; but supervisors and managers must not confuse a scorecard with a report card. Performance Measures supplement the traditional performance evaluation process. When implemented correctly, an organization should see the greatest improvements in every area that was measured. What is the Importance of Performance Measurement' There are many important performance measurement concepts, with these measurements we are to convince the organization how important these concepts of measurements are, and lead or manage an organization using metrics and measurement. The importance of performance measures is that it helps to identify the population to be measured, the method of the measurement, and the data source and time period for the measurement. Each measure should also be: an objective, easy to understand, controllable by the minimizing outside influences, timely, accurate, cost-effective, useful, motivating, and tractable. Performance Measures are also quantitative or qualitative are ways to characterize and define performance. They provide a tool for organizations to manage progress towards achieving predetermined goals, defining key indicators of organizational performance and Customer satisfaction. Another concept of Performance Measurement is the process of assessing the progress made (actual) towards achieving the predetermined performance goals which is the (baseline). Whereas, the measurement is also managed using output measures and outcome measures. Output measures are calculations of recorded activity or effort expressed quantitatively or qualitatively. Outcome measures are an assessment of the results of a program compared to its intended purpose. Reference: Section-II: 4 – Performance Measures 53 NYS project Management Guidebook4.1 the Balanced Scorecard: Retrieved on March 8, 2009 from: http://www.oft.state.ny.us/pmmp/guidebook2/Performance.pdf