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There
is an old management adage 'You can't manage what you don't
measure' , which very simply puts into perspective the purpose,
usefulness and importance of measuring performance in any organization.
The origins of strategic performance management can be traced
to the concept of management by objectives (MBO). Performance
Management System (PMS) is a technique to establish individual
performance objectives which are tangible, measurable and verifiable.
It must be noted that Performance Management is more than a
process involving objectives and reviews and appraisals and
other mechanistic tools. The increasingly competitive and constantly
changing economic environment firms find themselves tapping
into this critical asset which is a key to achieving sustainable
competitive advantage.
Performance measurement is a key function of the human resource
(HR) function. With the HR function gaining strategic importance,
the importance of establishing effective performance management
systems has gained considerable importance. The following paper
will analyse and critically evaluate the performance measurement
systems at Royal Mail. It will also provide recommendations
of how the performance measurement systems can be improved at
Royal Mail.
The PMS focuses on the contribution which each individual makes
to the work of the organisation/department and the emphasis
is on management rather than appraisal - managing development
and careers so as to improve the chances of achieving success.
It is based on clearly identifying roles and the range of competencies.
The system is designed to give each person: clarity in terms
of role, objectives and career expectations control in terms
of participation, development and results, and contribution
in terms of the business plan and the part they play individually
and as a member of a team.
According to Bevan and Thompson (1992) the features that distinguish
PMS from any other system is the fact that the organisation's
visions and objectives are conveyed to all employees, not only
departmental targets but individual targets are set as well,
formal reviews of progress are conducted to achieve these targets,
following the review training and development needs are identified
and employees are encouraged to develop the needed skills and
finally evaluation is carried out in terms of improving organisational
effectiveness and supporting the use and value of human capabilities.
It would be important to highlight that the key elements and
their respective purpose of performance management system is
to have a have a process that establishes objectives that determine
performance targets and goals. Secondly, it also requires organisations
to se accurate measures of performance for achievement. Thirdly,
a clear system of feedback must be established between the employers
and employees so that individuals are aware of their strengths
and weaknesses, and when required a channel exists to provide
encouragement and. Finally, Organisations need good information
on both performance and development in order to learn and direct
resources effectively.
It is imperative for organisations not only to be able to have
policies and procedures in place to set the standards of performance,
it is equally essential to be able to measure them.
ROYAL MAIL
For decades Britain enjoyed a first class postal service that
was the envy of the world. The industry was efficient and highly
profitable, contributing millions to the Treasury's coffers.
It offered value for money (with some of the lowest postal prices
anywhere in Europe) and a high quality public service. Commercial
freedom was meant to give Royal Mail more financial room for
manoeuvre in an increasingly liberalised postal market. But,
in reality, it has led to a short-term focus on cutting costs
and restoring profitability which has seriously undermined quality
and service standards and done nothing to address the years
of chronic underinvestment.
Hence, in an attempt to improve its service, Royal Mai set for
itself a total of 15 measurable performance targets. The key
idea behind this concept was not only to improve the services
provided to the customers but also to improve the internal processes
in the organisation. Thus in this respect, Royal Mail incorporated
PMS and devised to meet the following aims, namely, "
To deliver "world class" service at the defined market price.
"
To deliver a savings profile that reflects in excess of 10%
savings over the life of the contract. "
To deliver a national help desk handling in excess of 200,000
calls per year for PPM and reactive planning and tasking using
hand held and related technology. Royal Mail Quality of Service
targets Product Full Year targets % Results % First class stamped
and metered 92.5 88.3 Second class stamped and metered 98.5
98 First class PPI 90.6 81.9 Second class PPI 97.4 94.3 First
Class response services 90.3 73.8 Second class response services
97.5 93.9 Mailsort 1 91 86.4 Mailsort 2 97.5 95.8 Mailsort 3
97.5 97.1 Presstream 1 90.5 85.5 Presstream 2 97.5 96.3 Special
delivery 99 97.7 Standard retail parcels 90 87.7 All postcode
areas (except Lerwick, Hebrides, Kirkwall) to achieve 91% next
day delivery of first class mail posted in that area to any
other UK postcode 118 postcodes to achieve this 17 achieved
this All postcode areas to achieve 92.5% next day delivery of
first class mail posted in that postcode area 121 postcodes
to achieve this 83 achieved this Source: Royal Mail* "
To enable the organisational culture a chance to deliver a more
customer focused, responsive service where excellence was the
rule not the exception
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