Systematically Meeting Targets:
The Performance Management System (PMS) lets you continuously track progress against plans, while coordinating activities to maximize what matters most: achieving results. The PMS workshop delivers required knowledge and toolkit, so that you can design and install such management system within a few days.
Performance Management Pyramid
How the Pyramid works
The Performance Management Pyramid combines Strategy Deployment (top-down) and Performance Management (bottom-up).
- Strategy Deployment (Hoshin Kanri) defines the “WHAT”; what to do and what results to accomplish. It translates strategic goals top-down into a series of specific and measurable improvement actions.
- Performance Management defines the “HOW“; how to accomplish given targets by solving what specific problems to achieve what results. It delivers outcomes and escalates problems bottom-up.
Performance Management System
How the System work
The Performance Management System ensures continuous exchange of information between the organizational silos and management layers.
- Frontline people perform work, ensure compliance, and report issues
- Supervisors plan hours and assign people, and report rates and defects
- Managers plan and control quality, delivery, and resource efficiency
- Executives define requirements, allocate resources, forecast results
- Owners provide strategy and control inputs, outputs, effectiveness
The Shewhart cycle “plan-do-check-act” (PDCA) engages the entire workforce in joint problem solving to achieve joint goals.
Performance Management System
How it works:
As a first step, business objectives are being translated into operational metrics, making strategy execution manageable. Those metrics measure results relative to established standards of completeness, accuracy, speed, and cost. Lagging metrics are used to measure business impact on a monthly and quarterly basis, such as profitability and customer satisfaction. Leading metrics are used to identify abnormalities and coordinate actions on a daily and weekly basis, such as loading level and process performance. Second step is designing the actual system, connecting people with processes and metrics.
How long it takes:
The Performance Management workshop takes 3 days for demand analysis, parameter mapping, and system design to cover an organization with 3 management levels. A full-scope design requires one day per additional level, or 5 days for 5 levels, covering Owners, Executive, Managers, Supervisors, and Frontline.
Who is involved:
Developing an effective Performance Management System (PMS) is a prerequisite to achieve great results. Even though the design can be done in isolation by the respective manager, it is much preferred to involve the entire team or at least key stakeholders, up to 10 people. This approach consumes more time upfront to align on processes and parameters, but it speeds up the implementation because people tend to support what they have helped to create. The Leanmap expert moderates the PMS workshop, guiding the team through the learning and design process.
What you can expect:
Outcome is a “PMS Design Pack” that consists of three parts. First, a set of leading and lagging metrics, Key Performance Indicators (KPI) sheets filled with baseline data (simulated or measured) and targets set for each team or process in scope. Second, a custom-designed structure of interrelated elements (boards or monitors) to track performance with minimal overhead. Third, a process to effectively address deviations, delays, and disconnects, bringing performance in line with expectations.
How much it costs:
Leanmap provides the know-how, templates, and best practices to get the PMS design right first time. Dependent on the scope (basic or full), the PMS workshop is a 5 to 7-day effort to cover the onsite work, preparation and follow-up. Additional coaching support is available during the deployment period to ensure that targets are not only set, but also actually achieved.