Embed Size (px)
Citation preview
The impact of performance measurement in a service factory
Presentation at the PMA 2012 Conference Cambridge, 11th of July 2012
Joachim Sandt and Christoph Hoffmann
How performance measurement impacted employee behaviour and performance of the housekeeping operations of a British luxury hotel
2 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
1 Motivation
2 Performance measurement, management control and management control systems as a package
3 Performance measurement and management control in the housekeeping operations of a British luxury hotel
3.1 Status quo ante 3.2 Performance measurement and control initiatives 3.3 Results and behavioral impact of initiatives
4 Summary and conclusion
3 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Motivation
§ In the hotel industry customer and service orientation is paramount.
§ Performance measurement and management control can contribute to better manage operations in a hotel by supporting decision-making and directing employee behavior.
§ However, in the hotel industry performance measurement and management control systems still seems to have potential for improvement (e.g., Atkinson & Brander Brown 2001, Evans 2005)
§ Performance measurement and management control initiatives in a luxury hotel are analyzed by describing the status quo ante and status quo post with a framework of management controls and looking at the results and the impact on employee behavior of the initiatives.
4 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
1 Motivation
2 Performance measurement, management control and management control systems as a package
3 Performance measurement and management control in the housekeeping operations of a British luxury hotel
3.1 Status quo ante 3.2 Performance measurement and control initiatives 3.3 Results and behavioral impact of initiatives
4 Summary and conclusion
5 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Management control systems should be viewed comprehensively, i.e. As a package
Frameworks of management control systems
§ Ouchi (1975, 1979, 1980): output, behavior, and clan control
§ Mechant and Van der Stede (2007): results, action, personnel, and culture control
§ Simons (1995): diagnostic, interactive, belief, and boundary controls
§ Malmi and Brown (2008): planning, cybernetic, reward and compensation, administrative, and cultural controls
Several researches have called for viewing management systems (MCS) as a package
§ Otely (1980) “It is often impossible to separate the effect of an AIS [accounting information system] from other controls.“ (p. 422)
§ Flamholtz , Das and Tsui (1985)
§ Dent (1990)
§ Chenhall (2003) “A difficulty in studying specific elements of MCS in isolation from other organizational controls is the potential for serious model underspecification.“ (p. 131)
§ Malmi and Brown (2008)* “While much management accounting research has studied accounting-based controls and this typically focussed on formal systems, there is still limited understanding of the impact of other types of control (such as administrative or cultural) and whether/how they complement or substitute for each other in different contexts.“ (p. 288)
6 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
The framework of Merchant & Van der Stede will be used to describe the situation in a specific case
People controls Action controls Results controls
Personnel controls
Cultural controls
Non- financial
Financial
Form
al
Info
rmal
7 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
1 Motivation
2 Performance measurement, management control and management control systems as a package
3 Performance measurement and management control in the housekeeping operations of a British luxury hotel
3.1 Status quo ante 3.2 Performance measurement and control initiatives 3.3 Results and behavioral impact of initiatives
4 Summary and conclusion
8 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Status quo ante
Housekeeping – turning dirty rooms into clean inspected rooms on a daily basis • set amount of rooms not reflecting the size or set up
• satisfied when (enough) team members showed up to complete the daily workload
• quality of work only controlled through constant presence of the housekeeping management
• shortfalls were dealt with on the spot by addressing the issues with the individuals directly
• no track of (individual) performance was kept; incidences not compiled in a formalised way.
• the overall satisfaction of guests with regards to the cleanliness of the hotel and/or rooms was not analysed and communicated by the housekeeping management team.
9 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Management controls – status quo ante
People controls Action controls Results controls
Personnel controls
Cultural controls
Non- financial
Financial
Form
al
Info
rmal
Management controls in use – status quo ante
10 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Performance measurement and control initiatives
Credit System
11 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Performance measurement and control initiatives
!
!
Daily Attendance Tracking – Monthly Reporting
12 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Performance measurement and control initiatives
Quality Control Check Lists
13 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Performance measurement and control initiatives
Monthly League Table
14 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Performance measurement and control initiatives
Guest Feedback Tracking
!
15 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Management controls – status quo post
People controls Action controls Results controls
Personnel controls
Cultural controls
Non- financial
Financial
Form
al
Info
rmal
Management controls in use – status quo ante
Additional management controls
16 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Results and behavioral impact of initiatives
Credit System: • Distributing the workload in a fair transparent way • No favour towards certain team members Attendance Tracking: • Data “forced” the housekeeping management to look into the matter and implement changes • Follow up with the individuals: “Return to work interviews” were reinforced • Educated the housekeeping team; better understanding of the impact on team members • Tougher management based on data League Table: • Creates a positive competitive environment • True reflection of the performance of each team member • Communication tool • Opportunity to track performance over a period of time • Numerical feedback used in annual performance reviews • Basis to create personal development plans (e.g. Key Maids) for the team members
17 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
Results and behavioral impact of initiatives
Communication:
• Regular housekeeping communication meetings are held • Ensuring that each team member understands the direct impact on the guest experience. • Communication of “hard facts” instead of subjective observations of the management team • Instead of “just cleaning rooms every day” the team can work towards to hotel’s goal and see
how the hotel is performing.
KPI system: • Changed the way the hotel housekeeping management team manages itself • Changed the way the contracted service partner is managed • Transparent department • Focus on strategic continuous improvement
!
18 Joachim Sandt & Christoph Hoffmann The impact of performance measurement in a service factory PMA Conference 2012 Cambridge
1 Motivation
2 Performance measurement, management control and management control systems as a package
3 Performance measurement and management control in the housekeeping operations of a British luxury hotel
3.1 Status quo ante 3.2 Performance measurement and control initiatives 3.3 Results and behavioral impact of initiatives
4 Summary and conclusion
