10 THE OBJECTIVE MATRIX INTRODUCTION The objectives matrix is @ practical measuring instrument used by organisations, not only for performance measurement, but also to obtain worker involvement in Performance improvement. The matrix as such is no novelty but has been adapted by Riggs and Felix (both of the Oregon Productivity Center in the USA) to be used for measuring and monitoring progress towards Performance improvement. Measurement in factories where tangible goods are produced is relatively easy. in service organizations, however, performance measurement becomes more difficult < to the extent that some people do not believe that services can be measured. Various objections have been raised against performance measurement in service organisations. Well-known arguments are that services are intangible, Performance is equal to productivity and productivity has to do with the private Sector, performance improvement implies harder work and longer hours, ete. However, the provision of services as such can be measured although it may be inaccurate initially. Another fact is that many people fear measurement or do not know how to measure and then raise all kinds of objections. Service organisations should therefore measure total performance, which includes tangible outputs as well as the provision of services. Inputs are easy to measure by simply counting the input units, such as liters of fuel, man-hours, bags of cement, etc. Tangible results (outputs) in terms of books issued. kilometers of road tarred, cubic meters of refuse removed, etc, are equally easy to measure. Although the quality of service-rendering may pose some difficulty, it is nevertheless still measurable. Opinion polls, inspections, score cards, etc. are methods that ere widely used to measure quality. If the intellectual ability of human beings, which is invisible, can be measured, then Surely it must be possible to measure the work of auditors, legal advisors, work study officers, planners, etc. Where there is a will, there is always @ way. These notes aim to explain in general the functioning of the objectives matrix, The objectives matrix is relatively easy to implement and maintain, it is very adaptable and flexible. and can able incorporated in existing information systems. Although the matrix has wider applications, this document only deals with its basic application. The assistance of an experienced consultant should be obtained if more sophisticated applications are required. NECESSITY OF PERFORMANCE MEASUREMENT Whenever an organisation decides to introduce a purposeful process of performance improvement, it is totally unthinkable that progress in this process should not be monitored regularly. Deviations cannot be identified, corrective3.1 ul steps cannot be taken and recognition for good performance cannot be given unless progress is measured regularly. Attempting to improve performance without measurement would be the same as two cricket teams playing or at trophy in @ four-day match with no scoreboard or official score keeper. On the second or third day of the match neither team would have any idea of its position or of the strategy it adopts to with the match.. The two captains would not know how many runs were required or how many wickets were still to be taken to reach their goal. The match would end in chaos = everybody would lose interest, no goal would be reached and no trophy would be won. In any sport a score of some kind is kept (i.e. progress is measured). Why? The vast majority of improvement programs simply fall flat because of the absence of a performance measurement system. ‘Some organisations do try to measure their activities, but they unfortunately often merely collect statistics. Volume increases or decrease in either inputs or results do not necessarily reflect increased performance or better utilisation of resources. Statistics may indicate that 160 inspections were carried out this month compared to 150 last month, or that 2 200 m of lawn were moved this month as against 200 m last month, etc. However these are mere figures and are of no value as management information unless they are compared with something else. tis true that performance measurement is essential for the successful execution of a performance improvement programmed. It not only keeps a constant score with respect to the situation, but provided that recognition for excellent performance is given, it also motivates staff to participate in and to support the efforts. IMPLEMENTATION °F T4E OBJECTIVES MATRIX The system is implemented in four phases: Phase 1: Preparation Phase 2: Construction of the matrix Phase 3: Measurement Phase 4: Evaluation of results ‘These four phases are separately discussed below Phase 1: Preparation This phase consists of three important steps: Step 1: Management Training It is of the utmost importance that management should be trained in all aspects of the system. Although itis fairly easy to understand the functioning of the system, obtaining the services of an experienced person in advisable, especially as far as the application and management of the matrix is concerned.» 12 Step 2: Plan of Action After completion of the management training sessions (one-day seminar) , written plan of action should be drawn up, with target dates and who will be responsible for what. Step 3: Information Session with Staff ‘The success of the process entirely depends on the support of staff members. ‘They should therefore be fully informed about the aim of the process, ho-w it will be implemented, how they will be involved, what effect the results will have, etc. Steff organisations and labour unions should all be involved in the information session. Phase onstruction of the matrix The matrix is always constructed in full collaboration with the employees: whose Performance will be measured. Group discussions are held and the following steps are taken: The ultimate goal (right of existence) of the section/department should be clearly defined. What is it ultimately supposed to achieve? The objectives pertaining to its daily activities and that should be reached on an ongoing basis must be identified (functional objectives) These objectives should comply with the following requirements: They should be realistic They should be achievable They should focus on both resource utilisation and service rendering They should be measurable Criteria or norms should be developed according to which performance and progress towards achieving objectives can be measured. These criteria should comply with certain requirements: They should be expressed in ratios as far as possible They should be controllable They should measure what they are supposed to measure (reliability) They should be as simple as possible They should be fair. ‘They should be economical. Performance scales on which progress can be noted should be calculated. A relative weight should be allocated to each individual criterion These five steps are now explained in more detail13 Step 1: Define ultimate goal = Each functional unit, section or department must have a clearly defined goal to justify its right of existence. No goal means no right of existence. Example: The goal of a mechanical workshop could be defined as follows: ‘To maintain the organisation's vehicle fleet and other plant in the best possible working condition at all times and at the lowest cost.. Step 2:- Ide functional obje In each functional until, tasks/functions/activities are executed daily in order to produce a product or to provide a service of acceptable quality at fixed times. This represents the output of a functional unit and in this process resources should be utilised as sparingly as possible. The functional objectives derived from the most important tasks aimed at achieving the ultimate goal must be identified. Ask these questions: Which tasks should be executed exceptionally well or are of critical importance to achieving the ultimate goal? Which are the key performance areas? An objective to be pursued on an ongoing basis should be determined for each of these important tasks. Example: In the mechanical workshop the following ongoing objectives coud b= determined: «To execute routine services on vehicles, exactly according to the manufacturers specifications. + Tolimit “Comebacs" and rework to the absolute minimum. * To minimize the downtime of vehicles and plant * To ensure that the actual man-hours for various types of work correspond with the fixed standard times. The functional objectives should be determined in respect of resource utilisation linput) the service provided (output), or a ratio between these two. Care should be taken to determine objectives only for those tasks which are of crucial importance and not for all task. Usually the most important task account for about 20 % of the total number of task undertaken. This means that each functional unit should not have more than three to six functional objectives. Step 3: Determine criteria to measure progress This step logically follows on the previous one and entails the determination of criteria or norms according to which performance progress can be measured or monitor on an ongoing basis (e.g. monthly). It is important to adhere to the14 requirements for these criteria and each criterion must be tested against these requirements. The best results are obtained when criteria are expressed in ratios (sormething measured against something else) Example: ‘The workshop may use the following criteria (ratios): ! jimes x 100 = % labour utilisation ‘Total man-hours worked Or Man-hours spent on rework x 100 = % quality of service Total man-hours worked Other examples are as follows: Litre tf materials utilisation of fuel used or Man-hours spent cutting arass x 100 = % labour utilisation Total man-hours worked Typing Number of pages retyped x 100 = % rework ‘Total number of pages typed Traffic Number of fatal accidents x 100 = % fatal accidents Total number of accidents Or fy ses x 100 = % success Total number of summonses Town engineer M® of concrete wasted x 100 = % waste M® of concrete mixed Vehicles x 100 = % utilisation Hours available15 Step 4: Determine performance scales ‘An example of a blank objective matrix is presented below. For every criterion (ratio) the figures should be entered on the scale of the matrix. ‘Targets/Objectives (Performance measures) performance z 5 2 o ° o 3 Assessment Performance Weight indicator value Cc) ‘Source Saved upon Maarten (1988615)16 Current performance level ‘The information required for individual ratios for say the previous six moonths is usually collected and average is calculated. This figure represents the current performance level and is entered on scale level 3 (current standard) Realistic objective With the current performance level known, a realistic objective should be determined for every criterion. This figure is determined subjectively at this stage since the potential for improvement is still unknown. The objective per criterion is entered on scale level 10. Lowest acceptable performance ‘The lowest acceptable performance is determined and entered on scale level 0. Intermediate objectives The rest of the scale, namely levels 1 and 2 and 4 to 9, should now be completed. The following formulae are used to calculate the intervals For these figures: Levels 1 and 2 (per criterion Highest figure minus lowest figure divided by 3 (highest - lowest - 3 = interval) Levels 4 to 9 (per criterion) Highest figure minus lowest figure divided by 7. (highest - lowest - 7 = interval) Man-hours rework x 100 Total man-hours worked Scale Level rrent performance Lowest acceptable performance 23 o17 © Levels 1 and 2 H-L + 30r23-20 =3~+3 = 1 (interval) + Levels 4 to 9 H-L +7 020-6 =14+7 = 2 (interval ‘These calculations are done per criterion. It makes no difference whether the highest figure is on level 0,3 or 10. The lowest figure is simply subtracted from the highest figure and the answer is then divided by either 3 (levels 1 and 2) ot 7 (levels 4 to 9). The final result is the interval. Step 5: Allocation of relative weights. ‘out in the section or department. However, the group or a higher authority may decide that some criteria are more important than others. tn this case a relative weight is allocated to each criterion according to its importance. The weighs are entered in the horizontal weights row and together they should total 100. Various methods can be used to determine these weights: * They can be allocated arbitrarily or subjectively. * Each member of the group any decide on a weight per criterion according to his own requirements. The results are totaled and an average is arithmetically calculated. = The influence of the criterion on the budget in terms of money or manpower may be taken as the basis for weight allocation. The group may also decide that all criteria are equally important, in which case the weights are distributed equally. All criteria will carry the same weight which, when added together, must still total 100. ‘The construction of the matrix is now complete and can be submitted to management for approval. Management is eventually responsible for performance improvement, the objectives to be reached and the allocation of weights. It is suggested that consensus between management and the group be reached. The following figure offers an example of a matrix constructed in this manner.18 Performance assessment Performance indicator3.3 3.4 19 Phase 3: Measurement - Performance measurement with the aid of the matrix can be done monthly, quarterly, half early, etc. It is however strongly recommended that measurement be done monthly if possible so that deviations or weak performance can be identified in time and corrective steps be taken immediately. ‘At the end_of the first month after implementation of the matrix which have & Value of 300, all the new information required per criterion is collected and the ratios are calculated. ‘The following steps are then taken concurrently: * The ratios (performance level) for the particular month are calculated per criterion and entered in the horizontal performance row. + From this figure, move down vertically in the scale column and circle the _ Corresponding figure or the one nearest to the performance figure. * Form the circled figure. move right horizontally and read off the scele level. This figure is entered in the score row at the bottom + Multiply the score by the weight (per criterion) and enter this figure in the horizontal value row. * Add alll the vatues and enter the total in the total value block at the bottom right of the matrix The complete measurement process form information collection to total value calculations should not exceed 30 to 40 minutes per month. Measurement is now completed and the performance per criterion can be judged at a glance by simply looking at the circled figure. The total value figure is an indication of the performance of the section/department as a whole. Phase 4: evaluation of results The results are evaluated as follows: ‘The critical figure can be evaluated separately per criterion, for example by comparison with level 3 which is the current performance level. An increase or decrease in performance for the month can be observed by simply looking at the circles. if necessary, poor performance can be investigated immediately and corrective steps can be taken. ‘The figure for total value has no meaning unless it is compared with some other figure. For instance a new total value or 480 can be evaluated as follows: Compare with level 3 (initial matrix) 480 - 300 = 180 points improvement (60 %) NOTE: If all the new circles were on level 3, all scores would have been 3. The weights add up to 100. Therefore: Score (3) multiplied by weight (100) = 300. For the same reason the totel value for level 4 will be 400, level 5 = 500, level 6 = 600, level 10 = 1000, etc. Compare with level 10 1000 - 480 = 520 points away from objective Compare with previous month 480 - 300 = 180 points improvement (60 %) NOTE: The figure of 460 was taken as a fictitious previous months value. *