Page 269 - DMGT522_SERVICES MANAGEMENT

Services Management Ginni Nijhawan, Lovely Professional University

Notes Unit 13: Performance Measurement in Services

CONTENTS
Objectives
Introduction
13.1 Performance Measurement in Services
13.2 Types of Measures
13.3 Seven Good Reasons to Conduct Performance Measurement
13.4 Key Performance Indicators
13.5 Process Analysis
13.6 Summary
13.7 Keywords
13.8 Review Questions
13.9 Further Readings

Objectives

After studying this unit, you will be able to:
Elaborate the performance measurement concept in services
Discuss the reasons to conduct the performance measure
Describe the various types of measures
Introduction

Faced with stiffening competition, increasingly demanding customers, high labour costs, and,
in some markets, slowing growth, service businesses around the world are trying to boost their
productivity. But whereas manufacturing businesses can raise it by monitoring and reducing
waste and variance in their relatively homogeneous production and distribution processes,
service businesses find that improving performance is trickier: their customers, activities, and
deals vary too widely. Moreover, services are highly customizable, and people—the basic unit
of productivity in services—bring unpredictable differences in experience, skills, and motivation
to the job.

Such seemingly uncontrollable factors cause many executives to accept a high level of variance—
and a great deal of waste and inefficiency—in service costs. Executives may be hiring more staff
than they need to support the widest degree of variance and also forgoing opportunities to write
and price service contracts more effectively and to deliver services more productively.
As with any task or operation, to improve the productivity of services, you must apply the
lessons of experience. Consequently, measuring and monitoring performance (and its variance)
is a fundamental prerequisite for identifying efficiencies and best practices and for spreading
them throughout the organisation.

13.1 Performance Measurement in Services

Performance measurement involves determining what to measure, identifying data collection
methods, and collecting the data. Evaluation involves assessing progress toward achieving
performance expectations, usually to explain the causal relationships that exist between program
activities and outcomes. Performance measurement and evaluation are components of

264 LOVELY PROFESSIONAL UNIVERSITY