Page 277 - DMGT522_SERVICES MANAGEMENT

Services Management

Notes You also need to set targets for each Key Performance Indicator. A company goal to be the
employer of choice might include a KPI of “Turnover Rate”. After the Key Performance Indicator
has been defined as “the number of voluntary resignations and terminations for performance,
divided by the total number of employees at the beginning of the period” and a way to measure
it has been set up by collecting the information in an HRIS, the target has to be established.
“Reduce turnover by five percent per year” is a clear target that everyone will understand and
be able to take specific action to accomplish.

Self Assessment

Fill in the blanks:

6. If a ........................ Indicator is going to be of any value, there must be a way to accurately
define and measure it.
7. Key Performance Indicators, also known as KPI or ........................ (KSI), help an organisation
define and measure progress toward organisational goals.
8. A key goal of ........................, too, is to report progress back to those in your organisation
responsible for carrying out the work.
9. ........................ performance measurement gives you an opportunity to assess the quality
or effectiveness of your work right now.

10. The nice thing about pragmatic ........................ is that day-to-day roles and responsibilities
and lines of authority are the key ingredients in successfully contributing to meeting the
large, big-picture goals for which you are also, in part, accountable.

Task Discuss the Key Performance Indicators.
13.5 Process Analysis

An operation is composed of processes designed to add value by transforming inputs into useful
outputs. Inputs may be materials, labor, energy, and capital equipment. Outputs may be a
physical product (possibly used as an input to another process) or a service. Processes can have
a significant impact on the performance of a business, and process improvement can improve a
firm’s competitiveness.
The first step to improving a process is to analyse it in order to understand the activities, their
relationships, and the values of relevant metrics. Process analysis generally involves the following
tasks:

Define the process boundaries that mark the entry points of the process inputs and the exit
points of the process outputs.

Construct a process flow diagram that illustrates the various process activities and their
interrelationships.
Determine the capacity of each step in the process. Calculate other measures of interest.

Identify the bottleneck, that is, the step having the lowest capacity.
Evaluate further limitations in order to quantify the impact of the bottleneck.
Use the analysis to make operating decisions and to improve the process.

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