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PERFORMANCE MANAGEMENTAUDIT REPORT
ALPHA COMPANY
May 2017 73 Pages
A DIVISON OF
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INDEMNITY STATEMENT
© 2017 The KPI Institute Ltd. All Rights Reserved.
This audit report is the result of primary research conducted by The KPI Institute through
the Global Performance Audit Unit, with the support offered by Alpha Company.
Indemnity statement
The KPI Institute has taken due care in preparing the analysis contained in this report.
However, noting that the data used for the analysis has been provided by third parties, The
KPI Institute offers no warranty that the information collected is otherwise accurate, reliable
and that it indeed fits the purpose intended. The KPI Institute shall have no liability for errors,
omissions or inadequacies in the information contained herein or for interpretations thereof.
The data presented and the recommendations provided herein are based on the information
collected from the Alpha Company and The KPI Institute’s consultancy experience.
Report Contributors:
Head of Performance Audit Services: Alin Sonda
Director of Research Programs: Cristina Tarata
Research Team
Head of Research: Marcela Presecan
Business Research Specialist: Ana Lechintan
Internet Research Specialist: Amalia Rosdia
Graphic Design Team
Head of Graphic Design: Javier Rocha
Junior Graphic Designer: Andrei Popoviciu
Provided by:
Global Performance Audit Unit, a division of The KPI Institute
Life.lab Building
198 Harbour Esplanade, Suite 606
Melbourne Docklands, VIC 3008, Australia
Telephone (international): +61 3 9028 2223
E-mail: [email protected] | [email protected];
www.kpiinstitute.org | ww.GPAUnit.org
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
TABLE OF CONTENTS1. Audit scope 2. Executive Summary 3. How to use the Audit Outputs 3.1 Purpose of the reports, dashboard and infographic 3.2Readershipprofile4.PerformanceMaturityModelFrameworks 4.1StrategicPlanning 4.2 Performance Measurement 4.3 Performance Management 4.4PerformanceCulture5.PerformanceManagementSystemAuditMethodology 5.1 Evidence-based assessment 5.2Perception-basedanalysis 5.3Interview-basedanalysis 5.4ScoringMethodology 5.5 Limitations 6.PerformanceManagementSystemMaturityLevels 6.1Initial 6.2 Emergent 6.3 Structured 6.4 Integrated 6.5 Optimized 7.Auditfindings 7.1StrategicPlanning 7.1.1 Strategy Envisioning 7.1.2StrategyFormulation 7.1.3StrategyFocus 7.1.4StrategyArticulation 7.1.5 Strategy Review 7.1.6 Strategy Governance & Communication 7.2 Performance Measurement 7.2.1KPISelection 7.2.2 KPI Documentation 7.2.3 Target-setting
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7.2.4 Data Gathering 7.2.5DataVisualization 7.2.6 KPI Governance 7.3 Performance Management 7.3.1DataAnalysis 7.3.2 Reporting 7.3.3Decision-making 7.3.4 Initiative Management 7.3.5 Learning & Improvement 7.3.6 Performance System Governance 7.4PerformanceCulture 7.4.1IntegratedPerformanceCapability 7.4.2 Communication & Leadership Support 7.4.3 Creativity & Education 7.4.4Education&Knowledge 7.4.5Benefits&Recognition 7.4.6Happiness&Wellbeing8.ConclusionsAppendix 1
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Audit Scope
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1. AUDIT SCOPE
2. EXECUTIVE SUMMARY
The Performance Management System Audit is meant to assess the current
maturity level of the Alpha Company, in terms of the overall Performance
Management System in the organization.
The Audit Report is intended to provide valuable information about the
processes, tools and practices that stand at the basis of Alpha Company’s
Performance Management System, while collecting insight from Alpha
Company’s main stakeholders and the characteristics of related internal
documents,which are reviewedwhen assessing the organization’smaturity
level.
TheauditfindingsindicatethestrengthsandweaknessesofAlphaCompany’s
Performance Management System and they justify further efforts needed
to elevate the organization to the nextmaturity level. By analyzing current
practices, improvement recommendations were made to support the
developmentoftheperformancemanagementandmeasurementcapabilities.
The audit methodology used includes an internal documentation analysis,
thePerformanceManagementMaturityModel Survey and interviewswith
keystakeholderswithintheorganization.Informationwascollectedfromtop
management/senior managers, department heads and supervisors.
TheassessmentrevealedanemergentPerformance
Management System within the Alpha Company,
with an overall score of 2 for the assessed
capabilities.Theresultsshowthehighestscoreof
2.6 achieved for theStrategicPlanning capability,
followedby the scoreof2.1 for thePerformance
Measurement capability,1.8 for thePerformance
Measurementcapabilityand1.6forthecapability
ofdevelopingaPerformanceCulture.
Overall Performance Maturity Level Level 2
0 1 2 3 4 5
Performance Management 1.8
Performance Culture 1.6
Performance Measurement 2.1
Strategic Planning 2.6
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Strategicplanningisusedwithintheorganization,butnotoptimallyarticulated
andimplemented.Themissionandvisionoftheorganizationareclearandwell-
formulated,whilethestrategyreviewprocessfollowsaspecificmethodology
andinvolvestherightstakeholders.Strategyisverballycommunicatedonlyto
UnitHeadsandSupervisorswhiletheorganizationdoesnothaveamedium
Strategic Planning Level 2
0 1 2 3 4 5
Strategy Envisioning 3.3
Strategy Formulation 2.6
Strategy Focus 2.8
Strategy Articulation 1.7
Strategy Review 3.8
Strategy Governance & Communication 1.5
• Developamediumand long-termperspective in termsofstrategyand
documentitinthestrategicplan;
• Formulateanddocumentstrategicobjectives,whichshouldbestructured
in multiple layers (e.g. pillars, directions) and perspectives (e.g. financial,
customer,internalprocesses,learningandgrowth);
• Developaone-pagestrategymapwiththestrategicobjectivesdisplayed
inlayersandwithcorrelations(causeandeffectrelationships);
• AssociateKPIs and targetswith strategic objectives, to track progress
withstrategyexecution;
• Develop and implement a communication plan that clearly states the
frequency of communication and a break-down of information, based
on the different types of audiences, to raise the level of awareness and
transparencyonstrategy;
• Develop a Portfolio of Initiatives to centralize and monitor initiatives.
Clearlystatetheowner,statusanddeadlineofeachinitiative.
Recommendations for improvement based on the main findings of the Strategic Planning assessment:
and long-term perspective. There is no Portfolio of Initiatives to centralize
andmonitor strategic initiatives,while theobjectives andKeyPerformance
Indicators(KPIs)arenotcascadedatthedepartmentalandemployeelevels.
Furtherdevelopmentneedstobeconsideredtoensurestrategyexecutionis
effectivelymonitoredthroughKeyPerformanceIndicators(KPIs)
Executive Summary
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In terms of Performance Measurement, it was identified that targets for
sales are established based on previous results and those for production
are based on orders. The data gathering process relies on the accounting
software, standardized templates, clear deadlines and accountability. All
the performance reports contain visual representation of data, the graphs
and tables are designed on data visualization good practices. Performance
• EstablishaKPIselectionprocessfortheobjectivesoftheorganization;
• Assignatleast2KPIsforeachobjectiveandfocusonabalancebetween
financialandnon-financialKPIs;
• UseastandardizedKPIDocumentationForm,forallKPIsmonitored,that
containsrelevantinformation(e.g.KPIname,definition,calculationformula,
target);
• EstablishtargetsforallactiveKPIsandthresholdswhereverapplicable.
Organize target-settingworkshops and invite the employees responsible
measurementisusedwithintheorganization,butfocusedonfinancialmetrics
and limited to production, inventory and sales.KeyPerformance Indicators
(KPIs) are not used, the organization relies on reports generated using the
accounting software and themonthly achievement evaluation reports. The
current framework only supports performancemeasurement on corporate
anddepartmentallevel,withouttheoptiontomeasureindividualperformance.
0 1 2 3 4 5
Performance Measurement Level 2
KPI Selection 1.7
KPI Documentation 1.6
KPI Governance 1.6
Target Setting 2.2
Data Gathering 2.1
KPI Visualization 3.1
Recommendations for improvement based on the main findings of the Performance Measurement assessment:
for reaching the targets and those responsible with collecting data for
measuringtargetachievement;
• AssignanddocumenttherolesofKPIownersanddatacustodiansforthe
employees involved in the performancemeasurement process, to assure
accountability;
• Provide dedicated training and/or coaching programs on performance
measurementforallkeyemployees.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
• Organizemonthlyorquarterlyperformancereviewmeetingsandinvite
bothdecisionmakersandKPIownerstoattend;
• Foreachdecisionmadeduring theperformance reviewmeeting, set a
cleardeadlineandassignaresponsibleperson;
• Centralize and monitor the decisions from one performance review
meetingtoanother;
Performance Management relies on data analysis and reporting. Average
valuesformetricsordeltavaluesbetweenactualandtargetedperformance
levelsarerecordedinmonthlyperformancereports.Theresultsarediscussed
duringmonthlymanagementmeetings,butwithafocusonsales,production
(errors),marketing(awareness)andcustomercomplaints.Althoughdecisions
are made, they are not captured in meeting minutes and communicated
only verbally to those present. Actions/initiatives are not consolidated in a
portfoliotosupporttrackingprogress,theyareonlyverballycommunicated
to Unit Heads and monitored by the Management Representative. The project
management framework within the organization is not clearly established
nordocumented,andthereisnocommunicationplanforinitiativestatusand
performanceresults.
Recommendations for improvement based on the main findings of the Performance Management assessment:
• Develop a standardized initiative documentation form with relevant
information that supports implementation (e.g. initiativename, startdate,
enddate,initiativeownerandstatus);
• Consolidate the initiatives in a portfolio and all of the initiative
documentationformsinalibrarytotrackprogress;
• Developcommunicationplansforinitiativestatusandperformanceresults.
0 1 2 3 4 5
Performance Management Level 2
Initiative Management 1.6
Reporting 2.4
Decision Making 1.6
Data Analysis 2.3
Learning & Improvement 1.6
Performance System Governance 1.6
Executive Summary
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Level 2
0 1 2 3 4 5
Integrated Performance Capability 1.6
Communication & Leadership Support 1.7
Creativity & Innovation 1.6
Education & Knowledge 1.6
Benefits & Recognition 1.5
Happiness & Well Being 1.6
Performance Culture
• Develop and implement a communication plan that clearly states the
frequencyofcommunicationandbreaksdowninformation,basedondifferent
typesofaudiences,toraisethelevelofawarenessandtransparencyregarding
performanceresultsandthebenefitstheseprovidefortheorganization;
• Openatleastonechannelforemployeestosubmittheirinnovationideas
andassignacommitteeresponsiblewithassessingallinnovation/improvement
ideasproposedbystaffmembersanddecidingonfurthercoursesofaction;
Leadership is involved inpromotingaPerformanceCulture,asmanagement
meetings are held monthly and performance results are included in the
meetingagenda.Althoughdiscussed,communicationofperformanceresults
is limited tomiddlemanagement andUnitHeads/Supervisors.Effortswere
made towards offering a safe working environment for its employees, and
investmentsinmoderntechnologyweremadetoimproveworkingconditions
andperformance.Therearenochannelsopenedforallemployeestoexpress
innovation/improvementideas,noristhereacommitteeorgroupresponsible
for assessing any proposed ideas and deciding on further courses of action.
Gamificationactivities(internalcompetitions)arenotorganizedbytheentity.
Adequate allocation of resources is needed to establish knowledge sharing
practicesandensureaninternaldatabasewithinformativematerials,meantto
aidallemployeeswiththeirindividualprofessionalimprovement.
Recommendations for improvement based on the main findings of the Performance Culture assessment:
• Organize gamification activities (internal competitions) and share the
outcomesandthenameofthewinnerstoallemployees;
• Developaninternallibraryofresources(e.g.workinstructions)andmakeit
availabletoallemployees;
• Offer each employee access to educational programs (e.g. trainings,
workshops,conferences,summits),foratleast4to8hoursperyear;
• Organizeinternalknowledgesharingsessions.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
• PerformanceAuditReportandExecutiveDashboard;
• Roadmap for Improvement Report and Infographic.
The performance management systems maturity auditing generates two
reportsandvisualrepresentationsthroughDashboardsandInfographics:
3. HOW TO USE THE AUDIT OUTPUTS3.1 Purpose of the reports, dashboard and infographic
The reports contain valuable insights and improvement recommendations
that support the development of performance management systems. The
dashboard and infographic tools are designed to help organizations track
progress from one audit to the next one.
The Audit Report contains findings and recommendations on the assessed
capabilities.Ithighlightsthestrengthsandweaknessesofyourperformance
management system in a comprehensive manner.
3.2 Readership profile
The Audit Report and the Roadmap for Improvement Report are intended for
TopandMiddleManagement,aswellastheUnitHeadsandSupervisorsthat
are engaged in performancemanagement-related activities (data gathering,
target-setting,performancereviewetc.).
TheExecutiveDashboardisavisualrepresentationofthescoresobtainedfor
eachauditedcapability.Itisatoolthatcanbedistributedtotopmanagement
andusedforcomparisonwithfutureauditsintermsofresults.
TheRoadmapforImprovementReportrepresentsaguideonhowtoimplement
the improvement recommendations from the Audit Report, prioritizing the
findings that should be implemented first, in order to progress to the next
maturitylevel.Recommendationsaremadeforalltheassessedcapabilities.
The Roadmap for Improvement Infographic is a tool designed to help
organizationstracktheprogressoftheirinitiativesduringPerformanceReview
Meetings.Itsupportstheimplementationoftherecommendationsmadefor
performance improvement.
TheExecutiveDashboardisintendedforTopManagement,whiletheRoadmap
for Improvement Infographic is intended for the department or the position
assigned responsible for governing the Performance Management System
within the organization.
Performance Maturity Model Frameworks
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4. PERFORMANCE MATURITY MODEL FRAMEWORKS
The assessment was structured on 4 modules, each analyzed through 6 dimensions.
4.1 Strategic Planning
Strategic Planning is the process of defining the long-term
strategyofanorganizationandoptimizingresourceallocation,
inordertoreachthecommongoal.Italsogivestheorganization
the opportunity to estimate future events and to develop a
strong competitive advantage.
4.3 Performance Management
The performance management system relies on efficient
decision-making and project implementation.We also assess
theabilitytodevelopandchangebasedoncurrentresults,so
as to improve performance.
4.2 Performance Measurement
PerformanceMeasurementreflectstheuse,documentation
andvisualizationofKPIstoanalyzehowstrategyisexecuted,
how to effectively establish targets and collect information
onKPIresults.
4.4 Performance Culture
The Performance Culture represents an assessment of the
practicesemployedtocreatethenecessaryconditionsforthe
organization’s PerformanceManagement System to become
functional, to operate efficiently and be integrated into the
overallorganizationalculture.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
5. PERFORMANCE MANAGEMENT SYSTEM AUDIT METHODOLOGYThepurposeoftheauditinitiativedeployedbytheGlobalPerformanceAudit
UnitforAlphaCompanyistoshowcasethestrengthsandweaknessesofthe
currentperformancemanagement system, toprovideanoverviewofAlpha
Company’smaturitylevels,intermsofmanagingperformanceandimproving
current practices.
Themethodologyusedincludesprimaryresearch,bothquantitative(surveys)
andqualitative(interviews),aswellassecondaryresearch(documentsanalysis).
These3perspectivesprovideacomprehensiveoverviewofthematuritylevel
of the performance management system within the organization.
• Evidence-basedassessment;
• Perception-basedanalysis;
• Interview-basedanalysis.
• DirectorandManagementRepresentative;
• Unit Heads and Supervisors engaged in performance management
relatedactivities(datagathering,target-setting,performancereviewetc.).
The Performance Management System Audit Report relies on insights
collectedfromthreesourceswhicharefurtherdetailedthroughoutthereport:
5.1 Evidence-based assessment
5.2 Perception-based analysis
The evidence-based assessment relied on the submission and review of
relevant internal documents. The documents selected for analysis are
presented in Appendix 1.
Theevidence-basedassessmentreliedonthaTheperception-basedanalysis
was based on a survey designed to reflect the opinion of employees on
performance related practices. The survey contained 129 statements that
reflectedbestpracticesandwereratedonascalefrom1to5,basedonthe
extent to which they applied in the organization. e submission and review
of relevant internal documents. The documents selected for analysis are
presented in Appendix 1.
Thesurveywassenttothefollowingkeyinternalstakeholders:
The answers were analyzed and interpreted by the Performance Audit
Practitioner.Theoverall scorewascalculatedas theaverageof thescores
for each statement.
Anumberof92statementsthatreflectbestpracticesandcapturethemain
characteristics of the performance management process were scored by the
PerformanceAuditPractitioneronascalefrom1to5.Theoverallscorewas
calculatedastheaverageofthescoresforeachstatement.
Performance Management System Audit Methodology
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5.3 Interview-based analysis 5.5 Limitations
5.4 Scoring Methodology
The interview-based analysis was based on an interview guide reflecting
boththeevidenceandperception-basedanalysisresults,designedtoensure
consistencyinresultsandtogainabetterunderstandingoftheauditfindings.
The existence, use and characteristics of relevant internal documentswere
discussedduringtheinterviews,whilethemattersreflectedinthestatements
withhighvariationinsurveyresponseswereclarified.
Giventhemethodologyused,thefollowing limitationsshouldbeconsidered
whenanalyzingtheauditfindings:
Guidelines were provided to support objectivity in the perception-based
assessment, while the statements were presented in the survey in English
language.
There was a high level of support and commitment from the company
representatives towards the objective assessment of the performance
management system.
Thematurityleveloftheperformancemanagementsystemisdeterminedby
theoverall scores of both the evidence andperception-based assessments.
The evidence-based assessment weighs 75% of the final score, while the
perception-based assessment 25%.
>4.51 Optimized
Final Score Modules
3.71 - 4.5
2.71 - 3.7
1.51 - 2.7
1 - 1.5
Emergent
Initial
Integrated
Structured
• Most of the internal documents submitted for review as part of the
evidence-basedassessmentweretranslatedtoEnglishinordertobeanalyzed;
• Datacollectionthroughsurveyscanbebiased,duetothesubjectivityof
respondentsandtheirlevelofunderstandingofthestatements;
• The interviewswere held by the PerformanceAudit Practitioner,with
onlyonepersonassignedbytheorganization.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Business management does not rely on a clear strategy and performance
measurementisnotacommonpracticeintheorganization.Decision-making
is seldom using performance data as a reference point and there is limited
alignmentbetweenwhatneeds tobeachievedanddailyactivities.Learning
and improvement are not coordinated processes and there is no performance
cultureintheorganization.
Strategy planning takes place within the organization, but is not a regular
or well-articulated process. Performance measurement practices are used
mainlyatstrategiclevel.Althoughdataiscollected,itisnotextensivelyusedin
thedecision-makingprocesstoensureimprovement.Awarenessinregardsto
usingKPIsislimitedtotopmanagement.
Strategy is aligned across all business units, departments and individuals.
KPIsareusedbyallorganizationalfunctionsanddatacollectionisfacilitated
by technology. Performance improvement relies on extensive data analysis.
ThePerformanceManagementSystem is integratedsuccessfullywithother
organizationalsystemsandthesenseofaperformancecultureisembeddedin
theworkingenvironment.
An optimized Performance Management System implies the consolidation
of all efforts around strategy and provides agility in decision-making. The
PerformanceManagement System is constantly updated to meet business
needsandfullyalignedtostrategy.Advanceddataanalysismethodsareused
to extract valuable information from data. A strong performance culture is
embeddedinthebehavioranddemeanorofeachemployee.
Strategy formulation is a current practice, combining short and long term
perspectives. Measuring performance has been disseminated at operation
levels as well, for several critical departments or business units. Gathering
datareliesonMicrosoftExcelandtosomeextentitisusedindecision-making,
butnotatitsfullpotential.Althoughtoolstomanageperformanceareused,
there may be the case of misalignment between different approaches or
6. PERFORMANCE MANAGEMENT SYSTEM MATURITY LEVELS6.1 Initial
6.2 Emergent
6.4 Integrated
6.5 Optimized
6.3 Structured
instrumentsusedbydepartments/businessunits.Aperformancecultureis
unevenlydevelopedintheorganization,assomepartsofthecompanymaybe
moreresultorientedthenothers.
Audit findings
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Referstocorporateidentityelementslikevision,missionandvalues.Looksintohowtheyrelatetotheentity’spurposeandprovideasenseofdirectiontowardsthedesiredstateofevolution.Evaluateswhethertheywereformulatedinasimple,butcomprehensivelanguageandwhethertheyareembeddedinemployees’behaviors.
Containsstatementsmeanttorevealhowthestrategicplanningprocesstakesplace,which stakeholders are engaged and what instruments are used to perform theexternalenvironmentalscananddefinethecurrentstateoftheentity.
Providesanoverviewonthepracticesusedtoconvertstrategyintosimpleactionableobjectives, to assign KPIs to track objectives achievements and to connect plans(strategicobjectives)andactions(initiatives).
Indicates whether the strategy is aligned and integrated across all levelsand functions of the entity. Looks at the tools and instruments used in theimplementationprocess.
Presents the ability of the entity to adapt to changes and keep anupdated strategy,throughathoroughreviewprocessthatinvolvesallstakeholders.
Reflectstheefficiencyofthestrategycommunicationprocess,thelevelofawareness,transparency and understanding in regard to the roles and responsibilities forcascadingandaligningthestrategyacrosstheorganization.
Strategy Envisioning
Strategy Formulation
Strategy Focus
Strategy Articulation
Strategy Review
Strategy Governance & Communication
7.1 Strategic PlanningMaturity Audit
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
A. Strategy Envisioning. Score: 3.3
B. StrategyFormulation.Score: 2.5
C. StrategyFocus.Score: 2.7
Legend Strategic Planning Evidence-based Assessment
D. StrategyArticulation.Score: 1.1
E. Strategy Review. Score: 4
F. Strategy Governance & Communication. Score: 1
The score for the evidence-based assessment was 2.4, while the score for the
perception-based assessment was 3.1. As the evidence-based assessment weighs 75%
ofthefinalscore,whiletheperception-basedassessment25%,thefinalscorewas2.6.
Thisindicatesalevel2maturityscore(Emergent)fortheStrategicPlanningcapability.
7.1 Strategic Planning
Strategic Planning Assessment
0 1 2 3 4 5
A3.3
2.6B
2.8C
1.7D
3.8E
1.5F
Level 2
Strategic Planning Evidence Based Assessment
0 1 2 3 4 5
A3.3
2.5B
2.7C
1.1D
4E
1F
Theevidence-basedassessmentresultsshowalevel2maturityscoreintermsofthe
strategicplanningprocesstakingplacewithintheAlphaCompany.Thishighlights
thefactthatstrategicplanningisusedwithintheorganization,butitisnotoptimally
articulatedorimplemented.Specifically,thereisnoPortfolioofInitiativestocentralize
andmonitorstrategicinitiatives,whileobjectivesandKeyPerformanceIndicators
(KPIs)arenotcascadedatthedepartmentalandemployeelevels.Moreover,the
organizationdoesnothaveamediumandlongtermperspectivewhenitcomesto
strategy.Strategy iscommunicatedverballyonlytoUnitHeadsandSupervisors,
whilethestrategyreviewprocessdoesnotstartinpreparationoftheorganizational
budget.Theprocessesrelatedtostrategicplanningarenotmapped.
Audit findings
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The data set for Strategic Planning reveals the highest gaps between the
actual and perceived maturity level regarding strategy articulation, strategy
governance& communication,which strongly relate to the findings from the
evidence-basedassessment.Assuch,thereseemstobesizeablegapsinstrategy
focusandstrategyreviewwithinAlphaCompany.Thiscanbeattributedtoa
limitedunderstandingofthestepsfollowingthestrategicplanningprocess,while
theadequatetoolsandtechniquesneededtoclarifyandfacilitatetheenactment
0 1 2 3 4 5
Strategic Planning Assessment
A 3.33.1
C 2.73.3
F 13
B 2.52.7
E 43
D 1.13.3
Theperception-basedassessmentresultsdepictalevel3maturityscorein
termsofstrategicplanning.
Strategic Planning Perception Based Assessment
0 1 2 3 4 5
A3.1
2.7B
3.3C
3.3D
3E
3F
ofsuchstepsarefewormissingcompletely.Continuouscommunicationacross
organizational levels is imposed to smoothen the transition to a long-term
strategyandtomanagethechangebroughtaboutbytheimplementationofa
performance management system that aids the execution of strategy.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Strategy Envisioning analyzes the extent to which an organization has
successfullyshapedanidentityandcreatedavisiontoengageitsinternaland
externalstakeholders.Havingthemission,visionandvaluesclearlyidentified
inanorganizationensurestheabilitytoachievesustainabledevelopmentin
the upcoming years.
Onecannoticefromthedatacollectedthatvariability intermsofstrategy
envisioning is quite low, which is consistent with the general perception
regardingthematuritylevelforthiscluster.
7.1.1 Strategy Envisioning
A. Evidence-based Assessment B. Perception-based Assessment
Legend Strategy Envisioning Assessment
Strategy Envisioning Assessment
0 1 2 3 4 5
A3.3
3.1B
The vision and mission statements published on the company’s website
were reviewed. Vision: Alpha Company is aiming to become a world class
manufacturingofMedicalDevicewithgoodreputation,andthebestpartner
ofourstakeholder.
Mission: Alpha Company provides the good quality Medical Equipment
andHospitalFurnitureProductwith thegoodservicesandsupportsat the
best value to guarantee the satisfaction of customers andmeet regulatory
requirementaswell.
Strategy Envisioning Evidence Based Assessment
0 1 2 3 4 5
A5
4B
1C
A. Thevisioniswellformulatedandprovidesexplicitguidanceonwhattheorganizationaimsto achieve. Score: 5
B. Themissionreflectswhytheorganizationexistsanditspurpose.Score: 4
C. Thevaluestatementsaremeaningfulandreflectsbeliefs,commitmentsandexpectations.Score: 1
Legend Strategy and Business Planning
Audit findings
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Anaveragescoreof3.1intheperception-basedassessmentshowsthatthereisonlymoderateconsentregardingthevisionandmissionoftheorganization.
Moreover,internalawarenessaboutcorporateidentityandculturehasyettoberaised.
Strategy Envisioning Perception Based Assessment
0 1 2 3 4 5
A3.2
3.2B
3.2C
3D
3E
3F
Findings Recommendations
• The vision is clear, concise, future-oriented, stable, challenging and
abstract(generalenoughtoencompassalltheorganization’sinterestsand
strategicdirection);
• Themissionisclearandconcise,ithighlightscontributionsandidentifies
keystakeholders,butitdoesnotsupportdistinctionasitisnotexplicitabout
whatmakestheproductsunique;
• AlphaCompanyhasyettodefinetheentity’svalues,whicharemeantto
drivetheiremployees’behavior.
• Review the mission statement to support distinction, by referring to what
makestheproductsunique;
• Define, document and publish the entity’s values, which are meant to
drivetheiremployees’behavior.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Strategy formulation is the process that relies on the quintessential role of
stakeholders in formulating the strategy. It refers to the strategic planning
cycleandthe instrumentsusedtoperformtheexternalenvironmentalscan
anddefinethecurrentstateoftheentity.
Strategicplanningtakesplaceintotheorganizationtosomeextent.However,
the approach to formulate the strategy may be improved. There are no
techniquesortoolstotransformthestrategyintoanoperationalinstrument.
The organization’s strategic plan, environmental scan reports and
performance reports were reviewed to assess the strategy formulation
processandthestrategicplanningcycle.
7.1.2 Strategy Formulation
Strategy Formulation Assessment
0 1 2 3 4 5
A2.5
2.7B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Strategy Formulation Assessment
Strategy Formulation Evidence Based Assessment
0 1 2 3 4 5
A3
2B
A. Thestrategyformulationprocessiswellarticulatedandthoroughlydocumented.Score: 3
B. Theorganizationhasbothashortandlongtermperspectiveintermsofstrategyformulation.Score: 2
Legend Strategy Formulation Evidence-based Assessment
Audit findings
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Anaveragescoreof2.7intheperception-basedassessmentshowsthatthestrategicformulationprocessisanemergentone,whiletheroleofthestrategicplanning
capabilityisnotyetperceivedasfundamentalbyinternalkeystakeholders.
A. A. Relevantexternalstakeholders(clients,suppliers,externalregulators)areengagedduringstrategyformulationbycollectingtheirinputs.Score: 2.8
B. B. Theorganization’sstrategicplanisconnectedtoandreflectstheorganization’smediumtolongtermstrategicdirectionsanditsvision.Score: 2.8
C. C. AllrelevantInternalkeystakeholdersacrossdifferenthierarchicallevelsareengagedduringthestrategyformulationprocess.Score: 2.6
D. D. Thestrategicplaniswellarticulated.Score: 2.6
Legend Strategy Formulation Perception-based Assessment
Strategy FormulationPerception Based Assessment
0 1 2 3 4 5
A2.8
2.8B
2.6C
2.6D
Findings
• References to data analysis were identified in terms of product
quality, complaints and customer satisfaction, compliance with product
requirementsandsupplier’sperformance;
• Insights are collected from both internal and external stakeholders to
supportthestrategyformulationprocess;
• Theevidence-basedassessmentshowsthattheorganizationonlyhasa
short-termperspective(uptooneyear)intermsofstrategyformulation;
• No internal analysis is performed to support the strategy formulation
process(e.g.SWOTanalysis),whilethestrategyformulationprocessisnot
supported by a process map.
Recommendations
• Developamediumandlong-termstrategyperspectiveanddocumentit
inthestrategicplan;
• Conduct and document an internal analysis to identify the strengths,
weaknesses, opportunities and threats for the organization’s current
activities;
• Develop a strategic planning process map to ensure effectiveness, by
clarifying the activities that are being carried out and the roles of those
involved.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Strategy Focus assesses the manner in which strategic objectives are
formulated, documented, measured and used within the organization, in
ordertodriveprogress.Italsoreflectsonthedegreeofcohesionbetween
objectives,KPIsandsuitableinitiatives.
Strategic objectives are not clearly expressed and displayed in a strategy
map.Thestrategyisnotstructuredinmultiplelayersandperspectives,does
not have a combination of both financial and non-financial objectives and
causeandeffectrelationsclearlyestablishedbetweenthem.
Theorganization’sstrategicplanandperformancereportswerereviewedto
assessthestrategyfocus.Theorganizationhasn’tdevelopedastrategymap.
7.1.3 Strategy Focus
Strategy Focus Assessment
0 1 2 3 4 5
A2.7
3.3B
Legend Strategy Focus Assessment
A. Evidence-based Assessment B. Perception-based Assessment
Strategy Focus Evidence Based Assessment
0 1 2 3 4 5
A5
2B
1C
Audit findings
22 www.gpaunit.org | [email protected]
An average score of 3.3 in the perception-based assessment shows that the topics of mapping, prioritization and appropriate association of objectives, KPIs
andinitiatives/projectsareyettobefullycomprehendedandacknowledged.
Strategy Focus Perception Based Assessment
0 1 2 3 4 5
A3.6
3.4B
3.2C
3D
Findings
• Onlyqualityobjectivesareformulatedanddocumentedinthestrategicplan.
• Thereisnolinkbetweeninitiatives/actionsandobjectives.
• Nostrategymapwasdevelopedtodocumenttheprimarystrategicgoals.
Recommendations
• Formulate and document strategic objectives structured on multiple
layers (e.g. pillars, directions) and perspectives (e.g. financial, customer,
internalprocesses,learningandgrowth);
• Associate KPIs and targetswith strategic objectives, to track strategy
executionprogress;
• Developaone-pagestrategymapwiththestrategicobjectivesdisplayed
inlayersandwithcorrelations(causeandeffectrelationships).
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
StrategyArticulation looks into the toolsusedtoexecuteandmonitor the
strategy, aswell as into how it is aligned to the organization’s operations.
This section indicates the extent to which there is consistency between
the strategies used at different levels in the organization, including the
contributionofeachemployeetotheexecutionofstrategy.
In the case of Alpha Company, there is no articulation of objectives and
toolsusedtomakeitsstrategyactionable.Theorganizationdoesnotrelyon
instruments such as scorecards or dashboards to ensure strategy execution
iseffectivelymonitoredthroughKPIs.
7.1.4 Strategy Articulation
Strategy Articulation Assessment
0 1 2 3 4 5
A1.1
3.3B
Legend Strategy Articulation Assessment
A. Evidence-based Assessment B. Perception-based Assessment
Theorganization’s strategic plan,monthly achievement evaluation reports
andperformancereportswerereviewedtoassessstrategyarticulation.
Strategy Articulation Evidence Based Assessment
0 1 2 3 4 5
A2
2B
1C
1D
1E
1F
G1
1H
1I
1J
1K
1M
1L
1N
Audit findings
24 www.gpaunit.org | [email protected]
A. Theorganizationusesascorecardtomonitorstrategyimplementation.Score: 2
B. KPIsarecascadedtodepartmentallevel.Score: 2
C. Each objective is measured through KPIs. Score: 1
D. Theorganizationusesdashboardstomonitorotherimportantmetricsfordecision-making.Score: 1
E. TheorganizationusesaPortfolioofInitiativestocentralizeandmonitorstrategicinitiatives.Score: 1
F. Objectivesarecascadedtodepartmentallevel.Score: 1
G. Departmentalobjectiveshaveinitiativesassociated.Score: 1
H. Objectivesarecascadedatemployeelevel.Score: 1
I. KPIarecascadedtoemployeelevel.Score: 1
J. StrategyMapsareusedatdepartmentallevel.Score: 1
K. Scorecardsareusedatdepartmentallevel.Score: 1
L. Dashboardsareusedatdepartmentallevel.Score: 1
M. PortfolioofInitiativesareusedatdepartmentallevel.Score: 1
N. Scorecardsareusedtoemployeelevel.Score: 1
Legend Strategy Articulation Evidence-based Assessment An average score of 3.3 in the perception-based assessment shows that
thereislimitedunderstandingaboutstrategybeingoptimallyarticulatedand
implementedacrosstheorganization.
Strategy Articulation PerceptionBased Assessment
0 1 2 3 4 5
A3.6
3.4B
3C
3D
A. Initiatives/Projects are prioritized according to their strategic importance for the organization. Score: 3.6
B. TheKPIsreflectingobjectivesachievementarerelevantandclearlydefined.Score: 3.4
C. Thereisastrongperceptionofstrategyclaritythroughcascadingacrosstheentireorganization. Score: 3
D. Theperformancemanagementsystemisverywellalignedandintegratedacrosstheentire organization. Score: 3
Legend Strategy Articulation Perception-based Assessment
25
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Findings
• Amonthlyachievementevaluationreportisusedtomonitortasks(mostly
reporting responsibilities), sales and quality objectives. The table contains
theassociatedtarget,achievementsandtrends(instrumententitledLaporan
EvaluasiPencapaianBulanan);
• KeyPerformance Indicators (KPIs), scorecards,dashboardsandstrategy
mapsarenotusedwithintheentity;
• TheorganizationdoesnotuseaPortfolioof Initiatives to centralizeand
monitorstrategicinitiatives;
• Theobjectivesarenotcascadedatthedepartmentalandindividuallevels.
Recommendations
• Develop a Portfolio of Initiatives to centralize and monitor initiatives.
Clearlystatetheowner,statusanddeadlineofeachinitiative;
• DevelopScorecardsandDashboardsatthecorporate,departmentaland
individuallevelstomonitorstrategyimplementationandsupportdecision-
making;
• CascadeobjectivesandKPIsat thedepartmentaland individual levels,
to ensure consistency between the strategies at different levels of the
organization,includingthecontributionofeachemployeetotheexecution
of their associated strategy.
StrategyReviewreflectsontheabilityoftheorganizationtoadapttochanges
andkeepanupdatedstrategy,bymeansofarigorouscontinuousstrategyreview
7.1.5 Strategy Review
Strategy Review Assessment
0 1 2 3 4 5
A4
3B
Legend Strategy Review Assessment
A. Evidence-based Assessment B. Perception-based Assessment
Theorganization’sstrategicplanwasanalyzedtoassessthestrategyreview
process.
Legend Strategy Review Evidence-based Assessment
A. Thestrategyreviewprocessiswellarticulated.
Strategy Review Evidence Based Assessment
0 1 2 3 4 5
4A
process.Strategyreviewisawell-establishedpracticeintheorganization.The
reviewfollowsaspecificmethodologyandinvolvestherightstakeholders.The
auditfindingsindicateastructuredapproachtoreviewingstrategy.
Audit findings
26 www.gpaunit.org | [email protected]
Anaveragescoreof3intheperception-basedassessmentconfirmsthefindingsoftheevidence-basedassessmentandthefactthatalthoughthestrategy
reviewprocessiswell-established,thereisstillroomforimprovement.
Strategy Review Perception Based Assessment
0 1 2 3 4 5
A3.2
3B
3C
2.8D
A. Thestrategicplanisupdatedbasedonthedecisionsapprovedduringthestrategyreviewprocess. Score: 3.2
B. Thereviewedandupdatedstrategicplanisanaccuratereflectionofthecurrentbusinessenvironment and expected trends. Score: 3
C. Allrelevantadjustmentsofthestrategyarecommunicatedacrosstheorganizationtoallkeystakeholders.Score: 3
D. Thestrategyreviewandrealignmentisconductedwiththeinvolvementofallkeystakeholders.Score: 2.8
Legend Strategy Review Perception-based Assessment
Findings
• Thereisaformalstrategyreviewprocessthattakesplaceonanannualbasis;
• The senior andmiddlemanagement are involved in the strategy review
process,whileinputiscollectedfromlowerorganizationallevelsandexternal
stakeholders;
• The strategy review process does not start in preparation of the
organizationalbudget;
• The changes incurred by the review are verbally communicated only to
Unit Heads and Supervisors.
Recommendations
• Reviewthestrategyinpreparationoftheorganizationalbudget,toensure
thattheapprovedchangestothestrategyareincludedinthescopeofthe
budget;
• Documentthechangesincurredbythereviewandofficiallycommunicate
themtoallkeyinternalstakeholders.
27
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Strategy Governance & Communication reflects the efficiency of the
strategy communication process, the level of awareness, transparency and
understanding regarding the roles and responsibilities for cascading and
aligningthestrategyacrosstheorganization.
Theorganizationismanagingstrategyinformally,asitisonlycommunicated
verballytoUnitHeadsandSupervisors.Theorganizationshouldtakeactions
toraisethelevelofawarenessandtransparencyregardingstrategy.
The organizational chart and job descriptions were reviewed to assess
strategy governance. No documents were presented to assess the strategy
communication process.
7.1.6 Strategy Governance & Communication
Strategy Governance & Communication Assessment
0 1 2 3 4 5
A1
3B
Legend Strategy Governance & Communication Assessment
A. Evidence-based Assessment B. Perception-based Assessment
Strategy Governance & Communication Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
1D
A. Thereisawell-developedgovernanceframeworkfortheStrategyPlanningprocess.Score: 1
B. Thereisacomprehensivemanualorchapterofamanualreflectingallthekeyorganizationalstrategicplanningproceduresandtools.Score: 1
C. Theorganizationhasanextensivestrategycommunicationplan.Score: 1
D. Allprocessesrelatedtostrategicplanningaremapped.Score: 1
Legend Strategy Governance & Communication Evidence-based Assessment
Audit findings
28 www.gpaunit.org | [email protected]
An average score of 3 in the perception-based assessment shows that
the organization is managing strategy informally and that strategy is
communicatedwithoutaclearandwell-designedplan.Thefindingsconfirm
the moderate awareness level among employees regarding the strategy’s
importance or existence.
Strategy Governance & Communication Perception Based Assessment
0 1 2 3 4 5
A3
3B
3C
3D
3E
Findings
• Thegovernanceframeworkisinaninitialstate,asthereisnodedicated
StrategyManagementOfficeorrole/positionwithintheorganization;
• Thereisnostrategycommunicationplan;
• There is no manual/procedure on how the strategy is formulated,
articulatedandcommunicated intheorganization,while itsprocessesare
notmapped;
• Accountabilityformeetingstrategicobjectivesisnotclearlyestablished.
Recommendations
• Officiallyassigntheresponsibilityforstrategygovernancetoadepartment
orapositionwithintheorganization;
• Define and document the roles and responsibilities of all stakeholders
involvedinthestrategicplanningprocesstoensureaccountability;
• Develop and implement a communication plan that clearly states the
frequency of communication and a break-down of information, based on
differenttypesofaudiences,toraisethelevelofawarenessandtransparency
regardingthestrategy’simportance.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Consistsinevaluatingtheprocesses,toolsandtechniquesemployedbytheentitytoselectKPIs.Statementsrefertotheusage,thestandardizationoftoolsandpractices,butalsototherelevancyandalignmentofKPIstothestrategy.
KPI Selection
AimstoidentifywhetherKPIsaredocumentedintheentityandhowthisprocesstakesplaceintermsoftoolsused,peopleinvolved,governanceandkeepinginformationuptodate.
KPI Documentation
Assesses the extent to with target-setting relies on data and manages to create astimulatingenvironmenttoreachandexceedtargets.
Target Setting
Refers to the data collection process in terms of data sources, data timeliness andaccuracy.Italsolooksintotheusageofsoftwaresolutionstoenabledatagathering,modellingandreporting.
Data Gathering
Provides an evaluation on the entity’s approach in terms of visual design of data.Instrumentsassessed fromtheperspectiveofdatavisualizationgoodpracticesarescorecards, dashboards and performance reports.
Data Visualization
Incurs the assessment of internal accountability levels over performancemeasurementprocessessuchasKPISelection,KPIDocumentation,Target-settingand Data Gathering. It refers to the overall process of owning and distributingresponsibilityforperformancemeasurement.
KPI Governance
7.2 Performance MeasurementMaturity Audit
Audit findings
30 www.gpaunit.org | [email protected]
Thescorefortheevidence-basedassessmentwas1.6,whilethescoreforthe
perception-based assessment was 3.5. As the evidence-based assessment
weighs75%inthefinalscore,whiletheperception-basedassessment25%,
thefinalscorewas2.1.Thisindicatesalevel2maturityscore(Emergent)for
thePerformanceMeasurementcapability.
Theevidence-basedassessment results showa level2maturity score, thus
showcasing what type of performance measurement process takes place
7.2 Performance Measurement
Performance Measurement Assessment
0 1 2 3 4 5
A1.7
1.6B
2.2C
2.1D
3.1E
1.6F
A. KPISelection.Score 1.7
B. KPI Documentation. Score 1.6
C. Target-setting. Score 2.2
D. Data Gathering. Score 2.1
E. DataVisualization.Score 3.1
F. KPI Governance. Score 1.6
Legend Performance Measurement Assessment
A. KPISelection.Score 1
B. KPI Documentation. Score 1
C. Target-setting. Score 1.8
D. Data Gathering. Score 1.7
E. DataVisualization.Score 3
F. KPI Governance. Score 1
Legend Performance Measurement Evidence-based Assessment
Performance Measurement Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1.8C
1.7D
3E
1F
within the Alpha Company. Specifically, Key Performance Indicators (KPIs)
are not used and the organization relies on reports generated through its
accountingsoftware&itsmonthlyachievementevaluationreports.Thisshows
that performance measurement is used within the organization, but focused
onfinancialmetricsandlimitedtoproduction,inventoryandsales.Thecurrent
framework only supports performancemeasurement of the corporate and
departmental levels,without theoption tomeasure individualperformance.
Theprocessesrelatedtoperformancemeasurementarenotmapped.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
A. KPISelection.Score 3.7
B. KPI Documentation. Score 3.6
C. Target-setting. Score 3.5
D. Data Gathering. Score 3.6
E. DataVisualization.Score 3.3
F. KPI Governance. Score 3.2
Legend Performance Measurement Perception-based Assessment
The perception-based assessment results show a level 3 maturity score
regarding performance measurement.
Performance Measurement Perception Based Assessment
0 1 2 3 4 5
A3.7
3.6B
3.5C
3.6D
3.3E
3.2F
The data set for Performance Measurement reveals the highest gaps
between the actual and the perceived maturity level in KPI selection, KPI
documentationandKPIgovernance,whichstronglyrelatetothefindingsfrom
theevidence-basedassessment.Assuch,thereseemstobesizeablegaps in
target-setting and data gathering within Alpha Company. Financial reports
from the accounting software were presented as KPIs and this stands to show
that there is need for a comprehensive and coherent approach towards the
useofKPIs,whichwillrepresentthenextstageofstrategyimplementation.
0 1 2 3 4 5
Performance Measurement Assessment
A 13.7
C 1.83.5
F 13.2
B 13.6
E 33.3
D 1.73.6
A. KPISelection. Score: 1 (Actual) | 3.7 (Perceived)
B. KPI Documentation. Score: 1 (Actual) | 3.6 (Perceived)
C. Target-setting. Score: 1.8 (Actual) | 3.5 (Perceived)
Legend Performance Measurement Assessment
Actual Perceived
D. Data Gathering. Score: 1.7 (Actual) | 3.6 (Perceived)
E. DataVisualization. Score: 3 (Actual) | 3.3 (Perceived)
F. KPI Governance. Score: 1 (Actual) | 3.2 (Perceived)
Audit findings
32 www.gpaunit.org | [email protected]
KPI Selection consists of evaluating the processes, tools and techniques
employed by the entity to select KPIs. Statements refer to the usage &
standardizationoftoolsandpractices,butalsototherelevancyandalignment
of KPIs to the strategy.
Theevidence-basedassessment indicated that therewasnoKPIselection
process in place, a fact that was not consistent with the results of the
perception-based assessment, showing that the responses to the survey
variedbasedoneachperson’sexperienceandunderstandingofKPIs.
Theperformancereports,monthlyachievementevaluationreportsandalist
offinancialreportswerereviewedtoassesstheKPIselectionprocess.
7.2.1 KPI Selection
KPI Selection Assessment
0 1 2 3 4 5
A1
3.7B
A. Evidence-based Assessment B. Perception-based Assessment
Legend KPI Selection Assessment
KPI Selection Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
1D
A. TheKPIsetisbalancedbyassigningatleast2KPIsforeachobjective.Score: 1
B. TheKPIsetbalancedthefocusbetweenfinancialandnon-financialKPIs.Score: 1
C. KPI names are standardized. Score: 1
D. TheKPIselectionprocessiswell-articulated.Score: 1
Legend KPI Selection Evidence-based Assessment
33
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Anaveragescoreof3.7intheperception-basedassessmentshowsthatthetopicofKPIselectionisyettobefullycomprehendedoracknowledged.
KPI Selection Perception Based Assessment
0 1 2 3 4 5
A4
3.8B
3.8C
3.6D
3.6E
3.6F
3.4G
Findings
• ThereisnoKPIselectionprocessinplace;
• KPIs are not assigned to objectives.
Recommendations
• EstablishaKPIselectionprocessfortheorganization’sobjectives;
• Ensure that KPI names are standardized, do not include targets and
indicate how the objective is measured and not the purpose of the
measurementoranyactionstobetakeninthisregard(e.g.“#Timetoprocess
request”,insteadof“-timeefficiency”);
• Assignatleast2KPIsforeachobjectiveandfocusonabalancebetween
financialandnon-financialKPIs.
Audit findings
34 www.gpaunit.org | [email protected]
The section aims to identify whether KPIs are documented in the entity. It
looksintothemannerinwhichthisprocesstakesplaceintermsoftoolsused,
peopleinvolved,governanceandkeepinginformationupdated.
The evidence-based assessment indicated that there was no KPI
documentationprocessinplace,afactthatwasnotconsistentwiththeresults
of the perception-based assessment, showing that the responses to the survey
variedbasedoneachperson’sexperienceandunderstandingofKPIs.
NorelevantinternaldocumentswereprovidedtoassesstheKPIdocumentation
process.
7.2.2 KPI Documentation
KPI Documentation Assessment
0 1 2 3 4 5
B3.6
A1
A. Evidence-based Assessment B. Perception-based Assessment
Legend KPI Selection Assessment
KPI Documentation Evidence Based Assessment
0 1 2 3 4 5
A1
B1
C1
D1
A. TheentityusesastandardizedKPIDocumentationForm.Score: 1
B. AlltheKPIsmonitoredhavethresholdswhereverapplicable.Score: 1
C. TheKPIdocumentationprocessiswell-articulated.Score: 1
D. AninternalrepositoryordatabaseisusedforthecentralizationofallKPIDocumentationForms.Score: 1
Legend KPI Documentation Evidence-based Assessment
35
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
An average score of 3.6 in the perception-based assessment shows that the
topicofKPIdocumentationisyettobefullycomprehendedoracknowledged.
KPI Documentation Perception Based Assessment
0 1 2 3 4 5
A3.8
B3.8
C3.4
D3.2
A. AllKPIsaredocumentedpriortoKPIactivation(datagathering).Score: 3.8
B. TheKPIdocumentationtemplateiswelldesignedanduseful. Score: 3.8
C. TheKPIinternaldatabaseprovidesreliableinformationasitisconstantlyupdated.Score: 3.4
D. ThebenefitsofdocumentingKPIsareunderstoodamongkeystakeholderssuchasKPIOwners and Data Custodians. Score: 3.2
Legend KPI Documentation Perception-based Assessment
Findings
• ThereisnoKPIdocumentationprocessinplace;
• The entity does not use a standardized KPI documentation form.
Recommendations
• EstablishaKPIdocumentationprocess;
• Use a standardized KPI Documentation Form that contains relevant
information(e.g.KPIname,definition,calculationformula,target);
• DocumentalltheKPIsthataremonitored
This section assesses the extent to which the target-setting process relies
on actual data, and the extent to which it manages to create a stimulating
environment for employees to reach and even exceed targets within the
organization. As the entity does not use KPIs, the assessment of the target-
setting process was conducted on the metrics monitored by the entity. Targets
forsalesareestablishedbasedonpreviousresults,whiletargetsforproduction
areestablishedbasedonorders.
7.2.3 Target-setting
Target Setting Assessment
0 1 2 3 4 5
A1.8
3.5B
A. Evidence-based Assessment B. Perception-based Assessment
Legend KPI Selection Assessment
Audit findings
36 www.gpaunit.org | [email protected]
Theperformancereportsandmonthlyachievementevaluationreportswere
reviewed to assess the target-setting process.
Target Setting Evidence Based Assessment
0 1 2 3 4 5
A4
1B
1C
1D
Target Setting Perception Based Assessment
0 1 2 3 4 5
A3.8
3.8B
3.6C
3.4D
3.4E
3.4F
3.4G
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Findings
• Approximately83%ofthetasksfromthemonthlyachievementevaluation
reportshadtargetstobemet;
• Targetsforsalesareestablishedbasedonpreviousresultsandthosefor
productionbasedonorders;
• Nobenchmarkingdataisusedforestablishingtargets.
Recommendations
• EstablishtargetsforallactiveKPIsandthresholdswhereverapplicable;
• Organizetarget-settingworkshopsandextendaparticipationinvitation
totheemployeesresponsibleforreachingthetargetsandthoseresponsible
withcollectingdataformeasuringthetargets’achievement;
• Usebenchmarkingdataforestablishingtargets.
This section analyzes the data collection process in terms of clarity of data
sources,overallsystemsintegrationtofacilitatedataconsolidation&availability
in time and accuracy.
As the entity does not use KPIs, the assessment of the data gathering process
wasconductedonthemetricsmonitoredbytheentity.Theprocessrelieson
standardizedtemplates,cleardeadlinesandaccountability.
7.2.4 Data Gathering
Data Gathering Assessment
0 1 2 3 4 5
A1.7
3.6B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Data Gathering
The performance reports were reviewed to assess the target-setting process.
Data Gathering Evidence Based Assessment
0 1 2 3 4 5
A3
1B
1C
A. Thereisawellarticulateddatagatheringprocess.Score: 3
B. AllselectedKPIshavedatacollectionsystemsinplace.Score: 1
C. AllKPIsselectedareactive(thedatacanandiscollected).Score: 1
Legend Data Gathering Evidence-based Assessment
Audit findings
38 www.gpaunit.org | [email protected]
An average score of 3.6 in the perception-based assessment shows that the respondents who answered the survey about the characteristics of the current
processforgatheringdataunderstoodthatthisprocessisusedtocalculatethemetricsdisplayedinperformancereports.
Data Gathering Perception Based Assessment
0 1 2 3 4 5
A3.6
3.6B
3.6C
3.4D
A. TheKPIdatacollectioniscompletedontimeaccordingtothepre-establishedschedule.Score: 3.6
B. Instances of inaccurate data are rare events. Score: 3.6
C. ThecostformeasuringselectedKPIsdoesnotexceedthebenefitsofhavingthedata.Score: 3.6
D. Thetechnologysupportingthedatacollectionprocessisrelyingontheintegrationofdifferent data sources and databases. Score: 3.4
Legend Data Gathering Perception-based Assessment
Findings
• Datagatheringreliesonstandardizedtemplatesandhascleardeadlines;
• Accountability exists in terms of data collection as the performance
reportsincludethenameandsignatureoftheemployeethatgatheredthe
dataandtheonethatapprovedit;
• Datagatheringiswelldocumentedandsupportedbytheaccountingsoftware.
Recommendations
• Periodicallyassessthequalityofthedatagatheredintermsofaccuracy,
completenessandtimeliness;
• EstablishadatacollectionsystemforKPIs;
• EnsurethatthenecessarydataformeasuringKPIscanbeandiscollected
in a consistent manner.
39
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Datavisualizationprovidesanevaluationof theentity’sapproach in terms
of the visual design of data. Several noteworthy instruments which are
regularlyassessedfromtheperspectiveofgooddatavisualizationpractices
are scorecards, dashboards and performance reports.
One can notice from the data collected that variability in terms of data
visualization is quite low, which is consistent with the general perception
regardingthematuritylevelforthiscluster.AstheentitydoesnotuseKPIs,
the assessment of the data visualization practices was conducted on the
metrics monitored by the entity.
The performance reports were reviewed to assess data visualization
practices as the entity does not use scorecards and dashboards.
7.2.5 Data Visualization
Data Visualization Assessment
0 1 2 3 4 5
A3
3.3B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Data Visualization
Data Visualization Evidence Based Assessment
0 1 2 3 4 5
A3
3B
3C
A. Therearevisualelementsforallperformancemanagementtoolsused.Score: 3
B. KPIdatadisplayedingraphsiscompliantwithdatavisualizationbestpractices.Score: 3
C. KPIdatadisplayedintablesiscompliantwithdatavisualizationbestpractices.Score: 3
Legend Data Visualization Evidence-based Assessment
Audit findings
40 www.gpaunit.org | [email protected]
Anaveragescoreof3.3intheperception-basedassessmentconfirmsthefindingsoftheevidence-basedassessmentandthefactthatbestpracticesintermsof
datavisualizationareconsidered,butthereisstillroomforimprovement.
Data Visualization Perception Based Assessment
0 1 2 3 4 5
A3.4
3.4B
3.2C
Findings
• Alltheperformancereportscontainvisualrepresentationsofdata;
• Graphs are not crowded and have titles and labels, backgrounds are
cleanandcolorsarenotusedinexcess;
• Tableshavetitlesandalegend,dataisgroupedintologicalclustersand
charactersareproperlyaligned.
Recommendations
• Usepiechartsataminimum;
• Avoidstronggridsintables;
• Avoid3Dgraphicalrepresentationsofdata.
41
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
KPI Governance refers to the assessment of internal accountability levels
over performance measurement processes, such as KPI Selection, KPI
Documentation, Target-setting and Data Gathering. It refers to the overall
processofowninganddistributingresponsibilityforperformancemeasurement.
The roles of KPI owners and data custodians for the employees involved
in theperformancemeasurementprocessarenotestablished.There isno
manual/procedureonhowperformanceismeasuredwithintheorganization,
in addition to the fact that these processes are not mapped.
TheorganizationalchartandalljobdescriptionswerereviewedtoassessKPI
governance.
Thetrainingplanandbudgetwerenotpresented,sowecouldnotassessthe
availabilityoftrainingprogramsonperformancemeasurement.
7.2.6 KPI Governance
A. Evidence-based Assessment B. Perception-based Assessment
Legend KPI Governance
KPI Governance Assessment
0 1 2 3 4 5
A1
3.2B
KPI Governance Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
1D
Audit findings
42 www.gpaunit.org | [email protected]
An average score of 3.2 in the perception-based assessment shows that the respondents answered to the survey as to the characteristics of the current process
formeasuringthemetricsdisplayedinperformancereports.
KPI Governance Perception Based Assessment
0 1 2 3 4 5
A3.6
3.4B
3.2C
3.2D
2.6E
Findings
• Thegovernanceframeworkisinaninitialstate,asthereisnodedicated
PerformanceMeasurementOfficeorrole/positionwithintheorganization;
• Thereisnomanual/procedureonhowperformanceismeasuredwithin
theorganization,inadditiontothefactthatprocessesarenotmapped;
• Accountabilityformeasuringperformanceisnotclearlyestablished,as
there are no assigned KPI owners or data custodians.
Recommendations
• Assignanddocument therolesofKPIownersanddatacustodians to
employeesinvolvedintheperformancemeasurementprocess,toensure
accountability;
• Provide dedicated training and/or coaching programs on performance
measurementforallkeyemployees.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Assesses atwhat level is data analysis employed in the entity, identifying if specialtechniques or software are used.
Data Analysis
Focusesontheefficiencyofthereportingprocess,whetherissupportedbyasoftwaresolutionornot,ifreportsarereadyontimeandwellstructured.
Reporting
Evaluates how performance review meetings are approached from the preparationstage to the follow-up actions. It provides insight on the discussion focus and thedecision-makingprocessasanessentialcharacteristicofsuchmeetings.
Decision Making
Referstotheprojectmanagementcapabilityoftheauditedentity,ontheframeworkusedto implement initiatives.Assessesthedeliveryofprojectsontime, inbudgetandinaccordancewiththeestablishedqualitystandards.
Initiative Management
Illustrates the ability of the performancemanagement system to adapt to changesbasedonregularreviewsofstrategy.Itanalyzestheprocessofrecording,reviewingandimplementingimprovementideas.
Learning & Improvement
Identifies how the performance management system is coordinated, indicatesaccountability and governance. It assesses the clarity regarding the role of eachinternalstakeholder.
Performance System Governance
7.3 Performance ManagementMaturity Audit
Audit findings
44 www.gpaunit.org | [email protected]
Thescorefortheevidence-basedassessmentwas1.3,whilethescoreforthe
perception-based assessment was 3.4. As the evidence-based assessment
weighs75%inthefinalscore,whiletheperception-basedassessment25%,
thefinalscorewas1.8.Thisindicatesalevel2maturityscore(Emergent)for
thePerformanceManagementcapability
The evidence-based assessment results show a level 1 maturity score in
termsoftheperformancemanagementprocesstakingplacewithintheAlpha
Company.Simpledataanalysisisused,andaveragevaluesformetricsordelta
valuesbetweenactualandtargetedperformancelevelsarerecordedinmonthly
performancereports.Theresultsarediscussedduringmonthlymanagement
meetingsbutwithafocusonsales,production(errors),marketing(awareness)
andcustomercomplaints.Actions/initiativesarecommunicatedverballyonly
to Unit Heads and are monitored by the Management Representative.
7.3 Performance Management
Performance Management Assessment
0 1 2 3 4 5
A2.3
2.4B
1.6C
1.6D
1.6E
1.6F
A. DataAnalysis.Score: 2.3
B. Reporting. Score: 2.4
C. Decision-making.Score: 1.6
Legend Performance Management Assessment
A. DataAnalysis.Score: 2
B. Reporting. Score: 2
C. Decision-making.Score: 1
Legend Performance Management Evidence-based Assessment
Performance Management Evidence Based Assessment
0 1 2 3 4 5
A2
2B
1C
1D
1E
1F
D. Initiative Management. Score: 1.6
E. Learning & Improvement. Score: 1.6
F. Performance System Governance. Score: 1.6
D. Initiative Management. Score: 1
E. Learning & Improvement. Score: 1
F. Performance System Governance. Score: 1
45
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Theperception-basedassessmentresultshighlightalevel3maturityscore
forthecompany’sperformancemanagementframework.
Performance Management Evidence Based Assessment
0 1 2 3 4 5
A3.2
3.5B
3.4C
3.5D
3.2E
3.3F
A. DataAnalysis.Score: 3.2
B. Reporting. Score: 3.5
C. Decision-making.Score: 3.4
Legend Performance Management Evidence-based Assessment
ThedatasetforPerformanceManagementrevealsthehighestgapsbetweenthe
actualandperceivedmaturity levelwhen itcomestodecision-making, initiative
management, learning & improvement and performance system governance,
whichstronglyrelatestothefindingsfromtheevidence-basedassessment.This
can be attributed to a different understanding of the steps following the data
analysisandreportingprocesses,whileadequatetoolsandtechniquestoclarify
andfacilitatetheenactmentofsuchstepsseemtobelackingandaresorelyneeded.
0 1 2 3 4 5
Performance Management Assessment
A 23.2
C 13.4
F 13.3
B 2
3.5
E 13.2
D 13.5
Actual Perceived
A. DataAnalysis. Score: 1 (Actual) | 3.2 (Perceived)
B. Reporting. Score: 2 (Actual) | 3.5 (Perceived)
C. Decision-making. Score: 1 (Actual) | 3.4 (Perceived)
Legend Performance Management
D. Initiative Management. Score: 3.5
E. Learning & Improvement. Score: 3.2
F. Performance System Governance. Score: 3.3
D. Initiative Management. Score: 1 (Actual) | 3.5 (Perceived)
E. Learning & Improvement. Score: 1 (Actual) | 3.2 (Perceived)
F. Performance System Governance. Score: 1 (Actual) | 3.3 (Perceived)
Audit findings
46 www.gpaunit.org | [email protected]
Thissectionassesseswhatlevelofdataanalysisisbeingemployedintheentity,
identifying if any special techniques or software are used.A thorough data
analysisprocessfacilitatesbothreportinganddecision-makingbasedondata.
AstheentitydoesnotuseKPIs,theassessmentofthedataanalysisprocess
was conducted on the metrics monitored by the entity.
7.3.1 Data Analysis
Data Analysis Assessment
0 1 2 3 4 5
A2
3.2B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Data Analysis
A. SoftwaresolutionsareusedtoanalyzetheKPIresults.
B. TheorganizationisusingdataanalysisaspartofinterpretingKPIresults.
Legend Data Analysis Evidence-based Assessment
Theperformancereportsandmonthlyachievementevaluationreportswere
reviewedtoassessthedataanalysisprocess.
Data Analysis Evidence Based Assessment
0 1 2 3 4 5
A2
2B
An average score of 3.2 in the perception-based assessment unravels data
analysiscapabilitiesthathavenotyetfullyformedwithintheorganization.The
dataanalysisprocessissomewhatstreamlinedandscheduledappropriately,with
analysismethodsandtoolsdesignedtoensuredataconsistencyandrelevancy.
Data Analysis Perception Based Assessment
0 1 2 3 4 5
A3.6
3.4B
3.2C
3D
3E
A. Dataisanalyzedregularlyinaccordancewithapredefinedfrequency,oncetheKPIdataiscollected.Score: 3.6
B. InterpretationsofdataisdevelopedbothinisolationandincontextbasedontheinterrelationsidentifiedbetweendifferentKPIs.Score: 3.4
Legend Data Analysis Perception-based Assessment
47
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Findings
• BasicMicrosoftExcelisusedtoprocesstheresultsofdataanalysis;
• Simple data analysis is used,with average values formetrics or delta
valuesbetweenactualandtargetedperformancelevels.
Recommendations
• Use data analysis techniques such as Root Cause Analysis, Fishbone
Diagram or the 5 Whys.
C. Dataanalysisisgenerallydoneusingspecificbusinessanalysistechniques,suchasRootCouseAnalysis,FishboneDiagram,5Why’s,etc.Score: 3.2
D. Thedataanalysisprocessgeneratesvaluableinsightthatsupportsthedecision-makingprocess. Score: 3
E. KPIresultsareanalyzedandprocessingofthedatagatheredisgeneratedforalltheKPIsmonitored. Score: 3
Thissectionfocusesontheefficiencyofthereportingprocess,whetheritis
supportedbyasoftwaresolutionornot,and ifreportsarereadyontime&
well-structured.Acomprehensivereportingsystemallowsfortheorganization
togainvaluableinsightintoitscoreoperations.
WithinAlphaCompany, performance reporting is based on a rather simple
procedureofcompilingperformancedataandpresentingitinabasicformat
meant to raise awareness aboutperformance results, aswell as ensure the
transferofimportantdatatokeyinternalstakeholders.
7.3.2 Reporting
Reporting Assessment
0 1 2 3 4 5
A2
3.5B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Reporting
Theperformancereportsandmonthlyachievementevaluationreportswere
reviewedtoassessthedataanalysisprocess.
Reporting Evidence Based Assessment
0 1 2 3 4 5
A2
2B
A. ThereisawellarticulatedprocessforKPIreporting.
B. The Performance Reports of the organization are comprehensive.
Legend Reporting Evidence-based Assessment
Audit findings
48 www.gpaunit.org | [email protected]
Anaveragescoreof3.5intheperception-basedassessmentshowsthatthecharacteristicsofanefficientreportingsystemarecomprehendedandacknowledged
amongkeystakeholders.
Reporting Perception Based Assessment
0 1 2 3 4 5
A3.8
3.6B
3.6C
3.4D
3E
Findings
• Performancereportsaregeneratedeachmonthandarecompiledon
ayearlybasis;
• Thereportscontaingraphics,tablesandothervisualrepresentations
ofdata;
• The organization does not use a standardized performance report
template;
• Performance results are not accompanied by data interpretations
andcomments,whilereportsdonothaveexecutivesummaries;
• Noqualityassurancereviewofdatatakesplacebeforecompilingthe
reports.
Recommendations
• Increasethequalityofdatabyrandomdatasampling,doublechecking
(4eyesprinciple)and/orautomation;
• Developandimplementastandardizedperformancereporttemplateto
beusedacrosstheorganization;
• Include an executive summary, data interpretations and comments in
performance reports.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
This section evaluates how performance review meetings are approached,
from thepreparation stage to the follow-upactions. It provides insight into
whatisemphasizedduringameetingandwhythedecision-makingprocessis
anessentialcharacteristicofsuchmeetings.
Resultsarediscussedduringmonthlymanagementmeetings,butarefocused
around sales, production (errors), marketing (awareness) and customer
complaints. Although decisions are made, they are not documented and
communicatedonlyverballytothosepresent.
Nomeetingagendasorminuteswerepresentedtoassessthedecision-making
process.
An average score of 3.4 in the perception-based assessment shows that the
decision-making process is considered to be effective, although it is not a
formalprocess,inasmuchasitisaresultofmonthlymanagementmeetings.
7.3.3 Decision-Making
Decision Making Assessment
0 1 2 3 4 5
A2.7
3.4B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Decision-making
Decision Making Evidence Based Assessment
0 1 2 3 4 5
A1
1B
A. Performancereviewmeetingsarewellorganized.
B. Thedecision-makingprocessiseffective.
Legend Decision-making Evidence-based Assessment
Audit findings
50 www.gpaunit.org | [email protected]
Decision Making Perception Based Assessment
0 1 2 3 4 5
A3.6
3.6B
3.2F
3.6C
3.2G
3.4D
3.2H
3.4E
3.2I
A. Allkeystakeholders/KPIownersandotherrelevantdecisionmakersareansweringtheinvitationandgenerallyattendtheperformancereviewmeetings.Score: 3.6
B. Discussionscarriedduringtheperformancereviewmeetingsusuallyfollowthetopicsassigned in the meeting agenda. Score: 3.6
C. Theperformancereviewmeetingagendaandthepreliminaryperformancereportarepreparedandcommunicatedinadvanceofthescheduledmeetingdate.Score: 3.4
D. Theperformancereviewmeetingsdonotexceedtheallocatedtime,acommonacceptedstandard is an average of two hours. Score 3.4
Legend Decision-making Perception-based Assessment
Findings
• Performance reviewmeetingsarenot formallyorganized;decisions
aremadebasedondiscussionsfocusedonperformanceresults,during
monthlymanagementmeetings;
• Any decisions are only verbally communicated to those present at
monthlymanagementmeetings;
• Decisionsarenotcentralizedinmeetingminutes,withcleardeadlines
andaresponsiblepersonassigned.
Recommendations
• Organizemonthlyorquarterlyperformancereviewmeetingsandinvite
bothdecisionmakersandKPIownerstoattend;
• Foreachdecisionmadeduringtheperformancereviewmeeting,seta
cleardeadlineandassignaresponsibleperson;
• Centralize and monitor the decisions from one performance review
meeting to another.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Initiative management refers to the project management capability of the
audited entity, regarding the framework used to implement initiatives. It
assessesthedeliveryofprojectsontime,withinbudgetandinaccordancewith
theestablishedqualitystandards.
In the case of Alpha Company, there is no framework used to implement
initiatives, the entity does not use a standardized documentation form.
Initiatives are not consolidated in a portfolio to support tracking progress.
Actions/initiatives are communicated verbally only to Unit Heads and are
monitored by the Management Representative.
No relevant internal documents were provided to assess the initiative
management process.
7.3.4 Initiative Management
Initiative Management Assessment
0 1 2 3 4 5
A1
3.5B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Initiative Management
Initiative Management Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
1D
1E
A. TheentityusesastandardizedInitiativeDocumentationForm.Score: 1
B. InitiativeDocumentationFormsareconsolidatedinaLibraryofInitiatives.Score: 1
C. Allinitiativesareclearlyassociatedtoobjectives.Score: 1
D. Initiatives names are standardized. Score: 1
E. Theinitiatives/projectsselectedtosupporttheachievementofstrategicobjectivesareconsolidatedinaPortfolioofInitiatives.Score: 1
Legend Initiative Management Evidence-based Assessment
Audit findings
52 www.gpaunit.org | [email protected]
An average score of 3.5 in the perception-based assessment support the findings of the interview-based assessment. Specifically, actions/initiatives are
communicatedverballyonlytoUnitHeadsandaremonitoredbytheManagementRepresentative.
Initiative Management Perception Based Assessment
0 1 2 3 4 5
A3.6
3.4B
A. Theinitiativesstatusisreviewedandreportedwithregularity,atleastduringeachperformancemanagementcycle/reportingperiod.Score: 3.6
B. ImplementedinitiativescontributetotheachievementoftheKPItargetsandtheirrelatedstrategicobjectives.Score: 3.4
Legend Initiative Management Perception-based Assessment
Findings
• Actions/initiativesarecommunicatedverballyonlytoUnitHeadsand
aremonitoredbytheManagementRepresentative;
• Theentitydoesnotuseastandardizeddocumentationform;
• Initiativesarenotconsolidatedinalibraryorportfolio.
Recommendations
• Develop a standardized initiative documentation form, with relevant
information that supports initiative implementation (e.g. initiative name,
startdate,enddate,initiativeownerandstatus);
• Standardizeinitiativenamesandassociatethemtoobjectives;
• Consolidateinitiativesinaportfolio,aswellasallinitiativedocumentation
formsinalibrary,totrackprogress.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Thissectionillustratestheabilityoftheperformancemanagementsystemtoadapt
tochangesbasedonregularreviewsoftheorganizationalstrategy.Itanalyzesthe
processofrecording,reviewingandimplementingimprovementideas.
TheorganizationdoesnotkeepaLessonsLearnedLogtosupportlearningand
improvement,noraChangeLogtocaptureallchangesand/orupdatesonthe
performance management architecture.
No relevant internal documents were provided to assess the learning &
improvement process.
7.3.5 Learning & Improvement
Learning & Improvement Assessment
0 1 2 3 4 5
A1
3.2B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Learning & Improvement
Learning & Improvement Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
A. ALessonsLearnedLogiskeptandupdatedthroughoutthePerformanceManagementCycle.Score: 1
B. ThereisaChangeLogcapturesallchangesand/orupdatesontheperformancemanagement architecture. Score: 1
C. ThereisanInnovationManagementFrameworkintheorganization.Score: 1
Legend Learning & Improvement Evidence-based Assessment
Audit findings
54 www.gpaunit.org | [email protected]
Anaveragescoreof3.2intheperception-basedassessmentshowsalimited
understanding of the steps following the initiative management processes,
whileadequatetoolsandtechniquestoclarifyandfacilitatetheenactmentof
suchstepsseemtobelackingandaresorelyneeded.
Learning & Improvement Perception Based Assessment
0 1 2 3 4 5
A3.4
3.2B
3.2F
3.2C
3G
3.2D
3.2E
A. Anyideaforimprovementresultedaspartofobservations,dataanalysis,discussionsand performance review meetings is recorded and proposed for further review and implementationifapproved.Score: 3.4
B. ThereisanactiveprocessofcontinuousreviewandrealignmentofObjectives,KPIsandInitiativestotheentitystrategyduringeveryperformancemanagementcycle.Score: 3.2
C. Improvementideasgeneratedbyemployeesareactivelyconsideredforimplementation,onceanalyzedandapproved.Score: 3.2
Legend Learning & Improvement Perception-based Assessment
Findings
• The organization does not keep a Lessons Learned Log to support
learningandimprovement;
• TheentitydoesnotuseaChangeLog tocaptureall changesand/or
updatesontheirperformancemanagementarchitecture;
• Therearenoopenchannelsforemployeestosubmittheirinnovation/
improvement ideas.
Recommendations
• Keepalogwithallthelessonslearnedfromimplementinginitiatives,witha
briefcontextdescription,recommendationsandcomments;
• Keep a log with all the changes and/or updates to the performance
managementarchitecture.Includethereasoningbehindthechangesandthe
datewhenthechangesoccurred;
• Openatleastonechannelforemployeestosubmittheirinnovationideas
andassignacommitteeresponsiblewithassessingallinnovation/improvement
ideas proposed by staff, and deciding on further courses of action.
D. Valuablelessontobelearned,approvedideasforimprovementandanyupdateorchangemadetotheperformancemanagementsystemarethoroughlycommunicatedacrosstheorganization. Score: 3.2
E. Theentityisbenefitingfromastronglearningenvironment.Score: 3.2
F. Thereisahighlevelofcommitmentforcontinuouslearningandimprovementacrosstheentire entity. Score: 3.2
G. Anyinsightrelevanttotheimprovementoftheperformancemanagementcapabilityisacknowledged,analyzedandrecordedintheLessonsLearnedLog.Score: 3
55
Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
PerformanceSystemGovernancereflectshowtheperformancemanagement
systemiscoordinated.Itindicatesaccountabilityandgovernance,assessesthe
clarityofeachrole,foreveryinternalstakeholder.
The project management framework within the organization is not clearly
established and documented, as the processes related to performance
managementarenotmapped.There isnocommunicationplan toreporton
anyinitiative’sstatusorperformanceresults.
Thestrategicplan,organizationalchartandjobdescriptionswerereviewedto
assessthecompany’sperformancesystemgovernance.Thetrainingplanand
budgetwerenotpresented,whichdidnotallowustoassesstheavailabilityof
training programs on performance management.
7.3.6 Performance System Governance
Performance System Governance Assessment
0 1 2 3 4 5
A1
3.3B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Performance System Governance
Performance System Governance Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1F
1C
1D
1E
Audit findings
56 www.gpaunit.org | [email protected]
A. Allupdatesandchangestotheperformancemanagementsystemaresupervisedandapproved by the Performance Manager or designated person in charge of the system. Score: 3.4
B. Thereishighlevelofawarenessaboutperformancemanagementpracticesintheentity.Score: 3.4
C. Thereishighlevelofaccountabilityandsupportfortheperformancemanagementrelatedpracticesintheentity.Score: 3.4
D. Thereisawellarticulatedandimplementedperformancemanagementsystemintheentity. Score: 3.2
E. Theperformancemanagementsystemisimplementedandintegratedwithcleardesignatedrolesandresponsibilitiesacrosstheentireorganization.Score: 3.2
Legend Performance System Governance Perception-based Assessment
Anaveragescoreof3.3 in theperception-basedassessment shows that theorganization ismanagingperformance informallyandconfirms themoderate
awarenesslevelamongemployeesonperformancesystemgovernance.
Performance System Governance Perception Based Assessment
0 1 2 3 4 5
A3.4
3.4B
3.4C
3.2D
3.2E
Findings
• ThereisnoProjectManagementFrameworkwithintheorganization;
• Therearenocommunicationplanstoreportonanyinitiative’sstatus
orperformanceresults;
• Theprocessesrelatedtoperformancemanagementarenotmapped.
Recommendations
• Officially assign the ProjectManagement function to a dedicated office
or a position within the organization and map the processes related to
performancemanagement;
• Developcommunicationplansforinitiativestatusandperformanceresults
reporting;
• Provide dedicated training and/or coaching programs on performance
managementtoallkeyemployees.
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Reflects how well the performance management architecture is cascaded andintegratedacross theorganization. Assesses the clarity regarding the roleof eachstakeholder,accountabilityandgovernance.
Integrated Performance Capability
Indicates the efficiency of the communication process, the transparency of theentitytowardsinternalstakeholdersandthesupportofseniormanagementforthedevelopmentofperformancemanagementcapabilities.
Communication & Leadership Support
The impact of effective communication is reflected in the employees’ awarenesson latest strategic decisions made and engagement towards achieving desiredperformance results.Clarityandmotivationgenerally lead toproactivity, creativityand generate more ideas for performance improvement.
Creativity & Innovation
Assessestheentity’scommitmenttothecontinuousprofessionaldevelopmentofitsemployees.Referstohowtheentitycangrowbydevelopingitshumancapital,usingmoderntechnologyandbuildingaperformanceculture.
Education & Knowledge
Evaluatestheentity’sapproachtowardsmeasuringandrewardingemployeeperformance.Referstotheestablishedperformancelevelsandthecompensation&benefitsschemes.
Benefits & Recognition
Focusesontheworkingenvironmentintermsofprovidingapositiveattitudeandmindsetwhilenurturingfeelingsofhappinessandwellbeingtowardsperformanceimprovement.
Happiness & Well Being
7.4 Performance CultureMaturity Audit
Audit findings
58 www.gpaunit.org | [email protected]
Thescorefortheevidence-basedwas1whilethescorefortheperception-
based assessment was 3.3. As the evidence-based assessment weights 75%
inthefinalscorewhiletheperception-basedassessment25%,thefinalscore
was1.6.Thisindicatesalevel2maturityscore(Emergent)forthePerformance
Culturecapability.
Performance Culture Assessment
0 1 2 3 4 5
A1.6
1.7B
1.6F
1.6C
1.6D
1.5E
A. IntegratedPerformanceCapability.Score: 1.6
B. Communication & Leadership Support. Score: 1.7
C. Creativity & Innovation. Score: 1.6
D. Education&Knowledge. Score: 1.6
E. Benefits&Recognition. Score: 1.5
F. Happiness&Wellbeing. Score: 1.6
Legend Performance Culture Assessment
Performance Culture Evidence Based Assessment
0 1 2 3 4 5
A1
1.1B
1F
1C
1D
1E
Theevidence-basedassessmentresultsshowalevel1maturityscoreintermsthe
performanceculturewithintheAlphaCompany.Thisshowcasesthefactthatthe
organization has made few steps towards creating the necessary conditions for the
Performance Management System within the organization to be integrated into
theorganizationalculture.Fromthisperspective,itisimportanttoensurethatthe
rightgovernanceframeworkexists,inordertobenefitfromconsistentleadership
support,enhancecommunication,investinlearningandengagingstaffmembers.
A. IntegratedPerformanceCapability.Score: 1
B. Communication & Leadership Support. Score: 1.1
C. Creativity & Innovation. Score: 1
D. Education&Knowledge. Score: 1
E. Benefits&Recognition. Score: 1
F. Happiness&Wellbeing. Score: 1
Legend Performance Culture Evidence-based Assessment
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
Theperception-basedassessmentresultsshowalevel3maturityintermsof
theperformanceculturewithintheorganization.
ThedatasetforStrategicPlanningrevealshighgapsbetweentheactualand
theperceivedmaturitylevelinalltheassessedareas:integratedperformance
capability, communication & leadership support, creativity & innovation,
Performance Culture Perception Based Assessment
0 1 2 3 4 5
A3.5
3.5B
3.3F
3.2C
3.2D
2.8E
A. IntegratedPerformanceCapability.Score: 3.5
B. Communication & Leadership Support. Score: 3.5
C. Creativity & Innovation. Score: 3.2
D. Education&Knowledge. Score: 3.2
E. Benefits&Recognition. Score: 2.8
F. Happiness&Wellbeing. Score: 3.3
Legend Performance Culture Perception-based Assessment
0 1 2 3 4 5
Performance Culture Assessment
A 13.5
C 13.2
F 13.3
B 1.1
3.5
E 12.8
D 13.2
education&knowledge,benefits& recognitionandhappiness&wellbeing.
This can be attributed to a different understanding of the means in which a
performance-orientedcultureisdevelopedwithinanorganization.
A. IntegratedPerformanceCapability.Score: 1 (Actual) | 3.5 (Perceived)
B. Communication & Leadership Support. Score: 1.1 (Actual) | 3.5 (Perceived)
C. Creativity & Innovation. Score: 1 (Actual) | 3.2 (Perceived)
Legend Performance Culture
Actual Perceived
D. Education&Knowledge. Score: 1 (Actual) | 3.2 (Perceived)
E. Benefits&Recognition. Score: 1 (Actual) | 2.8 (Perceived)
F. Happiness&Wellbeing. Score: 1 (Actual) | 3.3 (Perceived)
Audit findings
60 www.gpaunit.org | [email protected]
A. Evidence-based Assessment B. Perception-based Assessment
Legend Integrated Performance Capability
A. Thereisawell-articulatedgovernanceframeworkforthePerformanceManagementSystem. Score: 1
B. AllactiveKPIshavedatacustodiansassigned.Score: 1
C. Thereisacomprehensiveperformancemanagementmanualorprocedurerelatedtoorganizationalperformancemanagement.Score: 1
D. Thereisacomprehensiveperformancemanagementmanualorprocedurerelatedtoorganizationalperformancemanagement.Score: 1
E. Allkeyprocessesrelatedtoperformancemanagementaredocumented/mapped.Score: 1
Legend Integrated Performance Capability Evidence-based Assessment
Thissectionreflectshowwell theperformancemanagementarchitecture is
cascadedandintegratedacrosstheorganization.Assessestheclarityregarding
theroleofeachstakeholder,accountabilityandgovernance.
There is no governance framework for thePerformanceManagement System
withinAlphaCompany,accountabilityislow,astherearenoKPIownersanddata
custodians.Theprocessesrelatedtoperformancemanagementarenotmapped.
Thestrategicplan,organizationalchartandjobdescriptionswerereviewedto
assesstheintegratedperformancecapability.
7.4.1 Integrated Performance Capability
Integrated Performance Capability Assessment
0 1 2 3 4 5
A1
3.5B
Integrated Performance Capability Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
1D
1E
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Global Performance Audit Unit Performance Management Audit Report for Alpha Company
Global Performance Audit Unit a division of The KPI Institute
An average score of 3.5 in the perception-based assessment shows that the
organizationismanagingperformanceinformallyandconfirmsthemoderate
awarenesslevelamongemployeesonperformancesystemgovernance.
Integrated Performance Capability Perception Based Assessment
0 1 2 3 4 5
A3.8
3.8B
3.5F
3.5C
3.5G
3.5D
3.3H
3.5E
3.3I
A. Employeescanapplyandusewitheaseinpracticeperformancemanagementtools,techniquesandrelatedprocesses.Score: 3.8
B. Thereisaclearunderstandingoftheentity’sstrategicintentacrosstheorganizationatallmanageriallevels.Score: 3.8
Legend Integrated Performance Capability Perception-based Assessment
Findings
• ThereisnogovernanceframeworkforthePerformanceManagement
Systemwithintheorganization;
• Accountabilityislow,astherearenoKPIownersanddatacustodians;
• Theprocessesrelatedtoperformancemanagementarenotmapped.
Recommendations
• Officially assign the responsibility of governing the Performance
Management System to a department or an individual role within the
organization;
• Assignanddocument therolesofKPIownersanddatacustodians, for
employees involved in the performance measurement and management
processes,toensureaccountability;
• Maptheprocessesrelatedtoperformancemanagement.
Audit findings
62 www.gpaunit.org | [email protected]
TheCommunicationandLeadershipSupportprocesshighlightsthedegreeof
efficiency regarding the organization’s communication network, the entity’s
transparencytowardsinternalstakeholdersandthelevelofsupportofsenior
managementforthedevelopmentofperformancemanagementcapabilities.
Leadership is involved in promoting a performance-oriented culture as
managementmeetingsareheldonamonthlybasisandperformanceresults
areincludedinthemeetingagenda.Communicationofperformanceresultsis
limitedtomiddlemanagementandUnitHeads/Supervisors.
7.4.2 Communication & Leadership Support
Communication & Leadership Support Assessment
0 1 2 3 4 5
A1.1
3.5B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Integrated Performance Capability
Legend Communication & Leadership Support Evidence-based Assessment
A. Leadershipisextensivelyinvolvedinpromotingaperformancedrivenculture.Score: 2
B. Theorganizationhasawelldesignedandimplementedperformancecommunicationplan.Score: 1
C. Communicationwithinternalstakeholderstakesplaceregularly.Score: 1
D. Communicationwithexternalstakeholderstakesplaceregularly.Score: 1
E. Theentitycommunicatesitsstrategyplans,performanceresultsandanyotherrelevantinformationeffectivelywithitsinternalstakeholders.Score: 1
F. Theentitycommunicatesitsstrategyplans,performanceresultsandanyotherrelevantinformationeffectivelywithitsexternalstakeholders.Score: 1
G. ThereisaChangeManagementprograminplacesecuringthattheperformancemanagementsystemandanychangestoitarewellabsorbedandconstantlysupported.Score: 1
The strategic plan and performance reports were reviewed to assess
performancerelatedcommunicationandleadershipsupport.
Communication & Leadership Support Evidence Based Assessment
0 1 2 3 4 5
A2
1B
1F
1C
1G
1D
1E
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Anaveragescoreof3.5intheperception-basedassessmentshowsthatinternalkeystakeholdersacknowledgetheinvolvementofseniorleadershipinpromoting
aperformance-drivenculture.
Communication & Leadership Support Perception Based Assessment
0 1 2 3 4 5
A3.8
3.8B
3.3F
3.5C
3.5D
3.5E
Findings
• Leadership is involved in promoting a performance-oriented culture
asmanagementmeetingsareheldonamonthlybasisandperformance
resultsareincludedinthemeetingagenda;
• Communication of performance results is limited to middle
management and Unit Heads/Supervisors.
Recommendations
• Have senior management officially express support towards the
performancemanagementsystem;
• Develop and implement a communication plan that clearly states the
frequencyofcommunicationandabreak-downofinformation,basedondifferent
typesofaudiences,toraisethelevelofawarenessandtransparencyregarding
performanceresultsandthebenefitsthesecanyieldfortheorganization;
• Implementbothtop-downandbottom-upopencommunicationchannels
foremployees.
Audit findings
64 www.gpaunit.org | [email protected]
TheCommunicationandLeadershipSupportprocesshighlightsthedegreeof
efficiency regarding the organization’s communication network, the entity’s
transparencytowardsinternalstakeholdersandthelevelofsupportofsenior
managementforthedevelopmentofperformancemanagementcapabilities.
Leadership is involved in promoting a performance-oriented culture as
managementmeetingsareheldonamonthlybasisandperformanceresults
areincludedinthemeetingagenda.Communicationofperformanceresultsis
limitedtomiddlemanagementandUnitHeads/Supervisors.
No relevant internal documents were provided to assess creativity and
innovation.
7.4.3 Creativity & Innovation
Creativity & Innovation Assessment
0 1 2 3 4 5
A1
3.2B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Creativity & Innovation
A. ThereisanInnovationManagementFrameworkintheorganization.Score: 1
B. TheInnovationManagementFrameworkisconsistentlyimplemented.Score: 1
C. Gamificationactivitiesarefrequentpracticesintheorganization.Score: 1
Legend Creativity & Innovation Evidence-based Assessment
Creativity & Innovation Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
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Anaveragescoreof3.2intheperception-basedassessmentshowsthatinternalkeystakeholdersconsiderthattheorganizationinformallysupportscreativity
and innovation.
Creativity & Innovation Perception Based Assessment
0 1 2 3 4 5
A3.5
3.3B
3.3C
3.3D
2.8E
Findings
• CreativityandInnovationarenotsupportedbyaframework;
• Therearenoopenchannelsforemployeestosubmittheirinnovation/
improvementideas;
• Gamification activities (internal competitions) are not organized by
the entity.
Recommendations
• Open at least one channel for employees to submit their innovation
ideas and assign a committee responsible with assessing all innovation/
improvement ideas proposed by staff members, and deciding on further
coursesofaction;
• Organize gamification activities (internal competitions) and share the
outcomesandthenameofthewinnerstoallemployees.
Audit findings
66 www.gpaunit.org | [email protected]
Thissectionassessestheentity’scommitmenttothecontinuousprofessional
development of its employees. It refers to how the entity can grow by
developing its human capital, using modern technology and building a
performanceculture.
Adequateallocationofresourcesisneededtoestablishknowledgesharing
practices and ensure an internal database with informative materials,
meant toaidallemployeeswiththeir individualprofessional improvement.
Establishing such practices is necessary for building and capturing
organizationalknowledge.
Thetrainingplanandbudgetwerenotpresentedtoassesstheavailabilityof
trainingprogramsforemployees.
7.4.4 Education & Knowledge
Education & Knowledge Assessment
0 1 2 3 4 5
A1
3.2B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Education & Knowledge
A. Learningtakesplaceintheorganizationbasedonastructuredapproach.Score: 1
B. Theentityorganizesanddeliverstrainingprogramstoallemployeesinaccordancetotheir training needs. Score: 1
C. Knowledgesharingisacommonandwelcomedpracticeintheorganization.Score: 1
Legend Education & Knowledge Evidence-based Assessment
Education & Knowledge Evidence Based Assessment
0 1 2 3 4 5
A1
1B
1C
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Anaveragescoreof3.2intheperception-basedassessmentshowsthatinternalkeystakeholdersbelievethatthereisalearningenvironmentwithinthe
organizationandthatknowledgesharingisbeingdone.
Education & Knowledge Perception Based Assessment
0 1 2 3 4 5
A3.5
3.5B
3F
3.3C
3G
3.3D
3H
3.3E
Findings
• Learningwithintheorganizationisnotbasedonastructuredapproach;
• Knowledgesharingpracticesarenotcommonwithintheorganization.
Recommendations
• Develop an internal library of resources (e.g. work instructions) and
makeitavailableforallemployees;
• Offer each employee access to educational programs (e.g. trainings,
workshops,conferences,summits)foratleast4to8hoursperyear;
• Organizeinternalknowledgesharingsessions.
Audit findings
68 www.gpaunit.org | [email protected]
Thissectionevaluatestheentity’sapproachtowardsmeasuringandrewarding
employee performance. It showcases the established performance levels
andthecompensation&benefitsschemes.
The organization has not developed a bonus system, nor a non-financial
reward scheme in the organization. Flat bonuses were offered to all
employees inthepast,basedonrevenue increase,butthere isno specific
policyinplace.
Norelevantdocumentswerepresentedtoassessthebenefitsandrecognition
practices of the organization.
7.4.5 Benefits & Recognition
Benefits & Recognition Assessment
0 1 2 3 4 5
A1
2.8B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Benefits & Recognition
A. Thereiswell-structuredbonussystemintheorganization.
B. Thereisanon-financialrewardschemeintheorganization.
Legend Benefits & Recognition Evidence-based Assessment
Benefits & Recognition Evidence Based Assessment
0 1 2 3 4 5
A1
1B
Anaverage scoreof2.8 in theperception-basedassessment confirms the
findings of the interview-based assessment and the lack of a clear bonus
system and reward scheme.
Benefits & Recognition Perception Based Assessment
0 1 2 3 4 5
A3
2.8B
2.8C
2.8D
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A. Thereisastrongcultureofperformanceacknowledgmentandrecognitionfromtheentity’ssidetowardsitsemployees.Score: 3
B. Therewardsschemeoftheentityincreasestheemployees’motivationlevel.Score: 2.8
C. Thebonussystemisperceivedasfairandrealisticbyemployees.Score: 2.8
D. Rewardsareofferedontimeaccordingwithapredefinedschedule.Score: 2.8
Legend Benefits & Recognition Perception-based Assessment
Findings
• Theorganizationdoesnothaveabonussysteminplace;
• Thereisn’tanon-financialrewardschemeintheorganization.
Recommendations
• Developabonussystemlinkedtoindividualandoverallperformance;
• Develop a non-financial reward scheme available for all hierarchical
levels.
Happiness & Wellbeing focuses on the working environment, in terms of
providingapositiveattitudeandmindset,whilenurturingfeelingsofhappiness
and well-being towards performance improvement. The organizationmade
efforts towards offering a safeworking environment for its employees and
investedinmoderntechnologytoimproveworkingconditions.Althoughthere
7.4.6 Happiness & Wellbeing
isnoofficialwellbeingprogramdedicatedtoemployees,theperception-based
assessmentindicatesapositiveworkingenvironment.
Happiness & Well Being Assessment
0 1 2 3 4 5
A1
3.3B
A. Evidence-based Assessment B. Perception-based Assessment
Legend Happiness & Wellbeing
Photos fromthecompany’sproductionareaswerereviewedtoassess the
workingenvironment.
A. Thereisaneffectivewell-beingprogramintheentitydedicatedtoemployees
Legend Happiness & Wellbeing Evidence-based Assessment
Happiness & Well Being Evidence Based Assessment
0 1 2 3 4 5
A1
Audit findings
70 www.gpaunit.org | [email protected]
Anaveragescoreof3.3intheperception-basedassessmentindicatesapositiveworkingenvironmentandthefactthatemployeesmaintainagenerallypositive
attitude&mindsetandshowconfidenceintheirbehaviorandactions.
Happiness & Wellbeing Perception Based Assessment
0 1 2 3 4 5
A3.8
3.5B
3.3F
3.5C
3.3G
3.5D
3H
3.5E
2.8I
Findings
• The organization made efforts towards offering a safe working
environment for its employees and invested in modern technology to
improveworkingconditions.
Recommendations
• Facilitate initiatives that improve the lifestyle choices and health of
workersasawayofpreventingchronicillnesses.
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Global Performance Audit Unit a division of The KPI Institute
8. CONCLUSIONSTheassessment revealed a level2maturity score across all the assessed areas
of Performance Management: Strategic Planning. Performance Measurement,
PerformanceManagement and Performance Culture. A level 2maturity score
relatestoanEmergentPerformanceManagementSystemwithinAlphaCompany.
Thehighestscoreof2.6wasachievedforStrategicPlanning,showingthatitis
practicedintheentity,althoughnotoptimallyarticulatedorimplemented.Afew
stepsshouldbemadeinordertoachievealevel3maturityscoreinthisarea,
suchas:developingamediumandalong-termperspectiveintermsofstrategy,
improvingandtrackingprogresswithstrategyexecution,raisingawarenessand
transparencyonstrategy,centralizingandmonitoringinitiativeprogress.
In terms of Performance Measurement, the achieved score was 2.1, showing
that it is focused on financial metrics and limited to production, inventory
andsales.KeyPerformance Indicators (KPIs)arenotused, theorganization
relieson reportsgeneratedusing theaccounting softwareand themonthly
achievement evaluation reports. The current framework only supports
performancemeasurementofthecorporateanddepartmentallevels,without
the option to measure individual performance. More effort is needed to
progresstothenextmaturitylevelinthisarea,suchas:selectingKPIsforeach
strategicobjectivewithafocusonfindingabalancebetweenfinancialandnon-
financialKPIs,documentingsaidKPIsandestablishingtargetsandthresholds,
ensuringaccountabilitywhencollectingdataandachievingtargets,providing
dedicatedtrainingonperformancemeasurementforallkeyemployees.
Ascoreof1.8wasachievedforthePerformanceManagementcapability,which
isstronglycorrelatedwiththescoreachievedforPerformanceMeasurement.
Performanceresultsarediscussedduringmonthlymanagementmeetings,but
withafocusonsales,production(errors),marketing(awareness)andcustomer
complaints.Actions/initiativesarecommunicatedverballyonlytoUnitHeads
and monitored by the Management Representative.
There are certain recommendations that should be considered to ensure
progressiontothenextmaturitylevelinthisarea,suchas:organizeperformance
reviewmeetings,centralize,documentandmonitoranydecisionsmade,builda
highdegreeofaccountabilityandsetcleardeadlinesforanygrowthdecisions&
theircorrespondinginitiatives,anddevelopcommunicationplansforinitiative
statusandperformanceresultsreporting.
Thelowestscoreof1.6wasachievedforthelastcapabilitythatwasassessed,
showingalevel1maturityscoreintermsofthePerformanceCulturewithin
AlphaCompany. This shows the fact that the organization hasmade a few
steps towards ensuring that the organization’s Performance Management
Systemwillbeintegratedintotheoverallorganizationalculture.Basedonthese
results,itisimportanttoensurethattherightgovernanceframeworkisputin
place,sothattheentitybenefitsfromconsistentleadershipsupport,enhanced
communicationandinvestmentsinlearning&engagementopportunitiesfor
staffmembers.Opening channels for employees to submit their innovation
ideas,organizinginternalcompetitionsandhavingalibraryofresourcescanall
supportthedevelopmentofaperformance-orientedculture.
Conclusions
72 www.gpaunit.org | [email protected]
APPENDIX 1. DOCUMENTS SELECTED FOR THE EVIDENCE-BASED ASSESSMENT
The documents selected for the evidence-based assessment were:
• Strategyplan
• Strategydocumentationfiles
• Environmentalscanreport
• SWOTanalysis
• Stakeholdersengagementplan
• Strategy map
• Corporate scorecard
• Corporate dashboard
• Performance report
• Departmentalscorecards
• Departmentalperformancereports
• Employeescorecard
• Employeeappraisalformoremployeeperformanceevaluationform
• Performancemanagementpolicy/procedures/manual
• KPI documentation forms
• Datagatheringtemplate
• Data audit report
• Anexportedreportfromthesoftwaresolutionwiththedataexportvisible.
• Meeting minutes
• Actionplan
• Initiativesportfolio
• Business case
• Projectplan
• Project status report
• Organizationalchart
• Job descriptions
• Communicationmaterials
• Projectprogresscommunicationsamples
• Employeeperformancemanagementpolicy/procedures/manual
• Employeeperformanceplan
• Competencies dictionary
• Bonus,rewardsandcompensationpolicy
• Employeeprofessionaldevelopmentplan
• Trainingplan
• Training budget
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