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IntroductionSyllabus / Lecture Plan
• Lecture 1 - Unit 1
• Lecture 2 - Unit 2
• Lecture 3 - Unit 3
• Lecture 4 - Unit 4 /5
• Lecture 5 - Assignment
• Lecture 6 – Unit 6
• Lecture 7 - Unit 7
• Lecture 8 – Unit 8
• Lecture 9 - Exam
1
Define, Role ,
Scope of FM
FM Performance
BCP
Facilities Management Principles
Value / Risk Management / IT
Facilities Management 1 [D39FM]
Unit 4
FM Performance
Facilities Management Performance
Overview
• Key Performance Indicators (KPIs)
• Problems of Identification and Application of A Generic Set
of Performance Parameters
• A Methodolgy for Developing KPI (Management by
Variance Tool)
Facilities Management 1 [D39FM]
Unit 4
Facilities Management Performance
Learning Outcome
• Appreciate the problems with contemporary approaches to
the performance assessment and benchmarking of FM
operations
• Learn to develop an alternative technique of performance
assessment
Facilities Management 1 [D39FM]
Unit 4
Facilities Management Performance
4.6 Introduction
• Based on a case study research done by the University for the premises department of Major Financial Service Company, Standard Life Assurance
• Pertinent Info on the case:– Responsibilities: Mtce Mgt, Space Mgt, Proj Mgt, Gen premises
Mgt of buildings, Admin of associated support svcs
– 27 buildings & 6000 employees
– Premise Manager and supporting managers
– In-house team with external contractors – in house team single skilled environment 10%.
– Planned & reactive maintenance & other works supporting the core business departments
– Competitive bidding for projects and partnering approach for service contract
– Need set of key performance indicators (KPI) to evaluate performance
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.8 Current & Previous Approach to Performance
Assessment
• Limitation of current application of KPIs
• Industry or Organisation Specific
• Applicable for monitoring the management of FM tasks
• Gap in understanding of the metrics (standards of
measurements) between customers & FM
• Metrics have no or little link with the performance of
business
• Significance of FM on the business unnoticed
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
Evolution of the Performance Assessment Framework
• Realisation of need to develop a more holistic approach linked to
business:
– Benchmarking
– Use of non financial indicators instead of using just financial
indicators
• Include indicators relevant to business- oriented customer
• Indicators can be presented graphically for comparison between
desired and actual performance
• Ranking or prioritisation of KPIs required in terms of the strategic
significance of strategic objectives
• Important to iron out the difference in perception between FM and
customer.
• Performance measurement must be dynamic
• Performance profiling for effective communication and improvement
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
Evolution of the Performance Assessment Framework
Facilities Management 1 [D39FM]
Unit 4
KPI
FM
Expectation
Customer
Expectation
- Business
Approaches
What is the
GAP?
Management
by Variance
Facilities Management Performance
4.9 Concept of The Alternative Framework
• Based on Becker’s 1990 concept and Scale of Framework suggested
by Slater(1997) i.e A set of definitive KPIs within a manageable
framework.
• Tool designed for a graphical profiling for easier use and application
• Indicators selected for the tool were to be created using a combination
of premises department and business customer views (done using
a case study application – action research).
• In the absence of a comprehensive alternative, a bespoke tool would
be developed using a bespoke set of performance indicators. (172
indicators)
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
• Use key literature sources to identify KPIs (Varcoe, Kay, Wang,
Slater, Palvia, Grover etc)
• Varcoe 1993
– cost , quality , delivery
– Limitation of cost per area
– Number of performance indicators should be minimised
– Best to have 5-6 biz objectives and 4-6 facilities performance
• Wang 1992
– Lack of agreement on KPI
– Best to have bespoke set of KPI
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
• 172 KPIs identified
• Narrowing down KPIs
• Some Issues identified:
– Mix and weighting of measures determined by a combination
by of factors (business env, bz strategy & type of service) and
size of customer base
– Problem of correlation of performance and criticality to
business or customer satisfaction
– Question of severity of gap between actual and he
benchmark
Facilities Management 1 [D39FM]
Unit 4
KPI Management
by Variance
Facilities Management Performance
4.10 Selection of KPIs
Facilities Management 1 [D39FM]
Unit 4
KPI
Phase 1 – Clarifying The Performance Assessment
Context
Phase 2 – Developing the Bespoke Performance
Assessment Tool
Phase 3 – Prioritisation of KPI
Phase 4 – Rating of FM Performance
Management
by Variance
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 1 – Clarifying the Performance Assessment Context
• Clarify the nature & priority of the performance parameters by expert panel
• Expert panel - equal number of staff from Premises Dept & Customer
• Consensus View using techniques- questionnaire, group feedback, scenario workshop, discussion to prioritise set of KPIs and rank this shortlist
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 2 – Developing The Bespoke Performance Assessment Tool
• Select a comprehensive & coherent list of PIs from the
long list
• Shorten list (by polling) by 1st classifying into categories of
essential, only desirable and of only tertiary importance &
then eliminating the last 2 categories
• Further refinement from 59 to 30 and finally to 23 KPIs
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 2 – Developing The Bespoke Performance Assessment Tool – issues found
• Definition of KPIs strongly influenced by corporate culture
– confirm difficult for generic set of KPIs
• Orientation of KPIs depends on corporate culture –
customer focus KPI in this case
• KPI chosen may be due to currency of issue (eg energy
usage)
• KPIs selection dependent on level of representation in the
management hierarchy (result in low strategic focus)
• Subjectivity and omission of KPIs
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 3 – Prioritization of Key Performance Indicators• Allocate grade (1 to 10 mark for each KPI) in the context
of strategic relevance to business• KPIs on top of list – of more strategic importance• KPIs at the bottom – more operational• Difficulty of distinguishing KPIs at top end• the very and supremely important KPIs• Subjectivity in according marks• Mixed bag of indicators, strategic, operational & customer
orientated arrived at and ranking subjective• Difference in perception (eg cleaning)
Management
by Variance
KPI
Facilities Management Performance
Facilities Management 1 [D39FM]
Unit 4
Methodology of the Alternative Performance Assessment
Tool
Phase 4 – Rating of Facilities Management Performance
• Semantic scale of rating – Unsatisfactory, satisfactory,
good, excellent
• Plot result ( figure)
• Issues:
• Datum scale affect shape of graph
• Respondent may be skewed in their response due to
perception and assessment approach
• Biasness may be presence depending on which
department conducts the performance appraisal – 3rd
party may be the answer
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
Concept
• ‘At a glance’ picture of the level of performance in key areas
• Main KPIs and Sub-KPIs instead of a generic set of KPIs at
departmental (latter ineffective)
• Rationale - Strategic level of performance in form of main KPIs
will, through measurement of sub-KPIs, contribute to continuous
improvement of the department
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
Architecture of the Tool
• Selected KPIs – plot difference in perception (variance) by
customer and the Premises Department.
• Application – can track performance over time though
several performance assessment
• Gap (variance) identify problem area.
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
Facilities Management Performance
4.11 Management By Variance Tool
• Snap-Shot Application
– Useful for identifying problems
• Trend or variance analysis
– Useful for identifying changes in performance over time
– Correlate such changes to company’s policies and plans
– Prompt action and prioritise action
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
Facilities Management Performance
4.11.4 Example Case Results
Facilities Management 1 [D39FM]
Unit 4
Reliability (7)
Professional Approach
of Premise Staff (8)
Responsiveness to
Problems (9)
Management of
Maintenance (11)
Satisfactory Physical
Working Conditions
(14)
Deviation of Premise Dept
and Customer
Management
by Variance
KPI
Facilities Management Performance
4.11.4 Example Case Results
Facilities Management 1 [D39FM]
Unit 4
Management
by Variance
KPI
1. No loss of Biz due to failure of premises
service
2. Customer satisfaction
3. Completion of project to customer
satisfaction
4. Provision of safe environment
5. Effective utilisation of space
6. Reliability
7. Professional approach of premise staff
8. Responsiveness to problems
9. Competence of staff
10. Management of maintenance
11. Responsiveness of PD to change/
requirements
12. Value for money
13. Satisfactory physical working conditions
14. Equipment provided meets biz needs
15. Equipment provided meets biz needs
16. Suitability of premises and functional env
17. Quality of end product
18. Effectiveness of helpdesk service
19. Achievement of completion deadlines
20. Correction of faults
21. Standards of cleaning
22. Management information
23. Energy performance