Performance management
Performance managementA local council has just received approval for �15 million from the National Lottery to build a new Arts, Media and Cultural Centre but it needs to find the matching capital Money for the project. It has also to find the annual running costs of �1 million for the new facility at the same sound as it needs to reduce its total Leisure and Arts budget by �5 million.
How can performance management and review processes assist with this complex decision and ensure that effective delivery of the project if agreed?
The local council has three main problems to resolve from this scenario. These are:
1. Matching the capital money and running costs of the proposed project.
2. Significantly reducing the leisure and arts budget, the sector in which the proposed project is in.
3. Keeping all major interest groups internally and externally from the project, relatively content.
However, the problems involving the interest groups are virtually impossible to resolve. This is due to people's contradicting needs; this creates the task of catering for each individual group’s needs, which is unobtainable. Therefore, the council must take an interest in the most significant party, the public; this includes the implications of the other major problems.
Performance management and review can be an aid to this project, by analysing the various options and solutions and deciding on the best course of action. Each of the three main problems may be divided into a list containing various sub problems, which create the overall problems. Each of these problems must be solved by prioritising in order of importance, in order to produce the most effective solution to the project.
Performance management has been defined as “a strategic and integrated approach to delivering sustained success to organisations by improving the performance of the people who work in them and by developing the capabilities of teams and individual contributors: (Armstrong and Baron 1998). Another definition however is that performance management is the systematic design, collection, analysis and review of information. In order to manage there is a need to establish and quantify what may be managed and how.
For the ability to use performance management within the project, it needs to be segmented into various sections that can possibly be measured over the duration of the project. The project has multiple objectives that need defining. These objectives are usually defined and the outcomes normally judged using the five E’s:
Economy: The effective acquisition of inputs, largely a value for money concept.
Efficiency: The ratio of inputs to outputs. The efficiency level will be increased if the output is consistent while input levels fall, or output is raised while input while input remains consistent.
Effectiveness: The extent of goal acheivement
Equity: Observance of criteria of fairnesss. This is probably the most significant condition for good performance.
Electability: Political affirmation of good performance that will prove essential for survival.
These five factors aid...
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