Performance Measurement

Performance Measurement Module:

The Stakeholder Approach to the Construction of Performance Measures

List of Contents:

Page No.

1. Introduction 3

2. Background to Performance Measurement and TQM 4

3. Analysis of Study 5

4. Stakeholders 9

5. Benchmarking 10

6. Sampling of the chosen population 11

7. Sampling Frames 12

8. Sources of Error in Sampling Frames 13

9. Questionnaire 15

10. Likert Scale 16

11. Validity 17

12. Conclusion 18

Appendices:

* Appendix A - Business Excellence Framework 19

* Appendix B - Returns Pie Chart 19

* Matrix of table results 20

Bibliography 21

Introduction:

The aim of the study " The stakeholder approach to the construction of performance measures" is:

"To design a set a user chosen performance measures, using the stakeholder method, which can be used in British academic libraries to improve customer service."

Earlier work by Glasgow Caledonian University resulted in using a multiple constituencies' model to define key constituency effectiveness. Further work by Calvert and Cullen (1995) led to a pilot study in which the framework of the study is based. Although the pilot study resulted in several observations only some were used to create this study.

The evaluation of the study is made more difficult as the organisation does not follow the usual pursuit of being more competitive and increasing customer loyalty in order to term its improved performance of customer satisfaction. By nature of its location to the customers, the organisation will have the same customer base and with the expected lack of competition, the traditional measure of losing customers cannot be taken proportionally as an effect of poor service.

In addition to this, there is a high variable of the library service due to heterogeneous nature and therefore service performance will vary day by day from customer to customer and from provider to provider.

Background to Performance Measurement and TQM

Before an evaluation of this study is started it is important to define performance measurement to understand any correlations with TQM and the organisation and if the measures that result are true performance measures.

Neely (1998) terms performance measurement as "quantifying past action, where measurement is the process of quantification and past action determines current performance. Organisations achieve their goals, that is they perform, by satisfying their customers with greater efficiency and effectiveness than their competitors".

He further defines effectiveness as "extent to which the customer requirements are met" and that efficiency "is a measure of how economically the organisation's resources are utilised when providing a given level of customer satisfaction."

It should therefore be the case that the performance measures chosen need to be quantifiable with respect to effectiveness and efficiency. Whilst this seems rather simple it is understood that "Service Quality is a concept that has aroused considerable interest and debate in the research literature because of the difficulties in both defining it and measuring it with no overall consensus emerging on either", Parasuraman et al (1985); Lewis and Mitchell, (1990); Dotchin and Oakland, (1994a, 199b); Gaster 1(1995) Asubonteng et al, (1996). It is acknowledged, however, that measuring allows the comparison before and after changes and is key in this case to improving customer service. As Galileo Galilei said, " What can be measured can be improved..... Count what is countable, measure what is measurable and what is not measurable make measurable."

Regarding the role of TQM and its relevance to this study, the following definition from ISO 8402:1994 defines TQM "as the management approach of an organisation centred on quality, based on the participation of all its members and aiming at long term success. This is achieved through customer satisfaction and benefits to all members of the organisation and to society. In other words, TQM is a philosophy for managing an organisation in a way, which enables it to meet stakeholder needs and expectations efficiently and effectively, without compromising ethical values." Quality World Magazine (2005).

Obvious relevance from the stated aim is therefore an importance of using stakeholders and the desire to focus on the customer albeit to achieve satisfaction or improve service.

Analysis of the Study

Dahlgaard et al (1998), define TQM as "A corporate culture characterized by increased customer satisfaction through continuous improvements, in which all employees in the firm participate".

However, although this aim is similar to that of many organisations choosing the right performance measures is critical. "Performance