Performance Management

Strategy2010-2012

Business Improvement UnitBournville Village Trust

Compiled by: Becci Youlden, Head of BIUDate: April 2008Reviewed: September 2008, May 2009. Updated: June 2009, May 2010

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CONTENTS PAGE NO.

Introduction 5

Performance Management at BVT 7

Performance Management Framework

LeadershipPerformance Indicators

TargetsContinuous Improvement and Service ReviewsCustomer Feedback and Satisfaction Measures

BenchmarkingRisk Management and Tolerance Levels

Reporting MechanismsPolicies, Procedures and process Mapping

Audit and validation of performance systems

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1. Introduction

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People

InvolvementTransparency

The ‘big picture’

Systems

Managing processesInformation systems

Monitoring and review

1.1 What is performance management?

The Audit Commission defines performance management as ‘taking action in response to actual performance to make outcomes for users and the public better than they would otherwise be’. In essence, it is about the delivery of better services to customers. This includes frontline delivery of the services and also the services that support the running of the business, such as Finance and Human Resources.

Effective performance management relies on systems and people working together to make sure the right things happen. The hard systems, processes and data are inseparable from the soft aspects such as culture, leadership and learning. There are three key elements, all of which are equally important, as the diagram below illustrates:

LeadershipLeadership is not in itself performance management, but it is essential to its effective use. An organisation cannot manage performance if it does not have a strategic direction. Aims, objectives and priorities are fundamental to managing the performance of key elements of the business. It is also imperative to have buy-in from the top down.

PeopleIt is fundamental to have involvement of all parties; within BVT this includes Trustees, Executive Team, managers, frontline staff, residents and other customers. Communicating information to the right people at the right time is key to ensuring transparency in decision-making and the actions taken.

Leadership

Priorities and objectives Structures Attitudes

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SystemsConsidered the more practical side of performance management, this involves having a toolkit of performance measures that can be used to: Assess the services being provided, Identify and address poor performance Ensure that Value For Money is being achieved and that services are being

continually improved.

1.2 Why is performance management important?

Performance management matters to everyone who wants to see customers better served by the organisation. Managers can use it to ensure that services are improving and are more efficient, Committees and Trustees can use it to help guide the direction of the Trust and ensure policy decisions are being carried out and customers can use aspects of performance management to hold the organisation to account.

Good performance management helps to: Prioritise what gets done and ensure there are sufficient resources to do

it. Ensure the organisation provides Value For Money. Motivate and manage staff. Identify and rectify poor performance at an early stage. Learn from past performance and improve future performance.

2. Performance Management at BVT

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The Business Improvement Unit was set up in December 2006 to facilitate the management of performance across the Trust. A review has taken place as to our current position in conjunction with key members of the Senior Management Team. It focused on the three key elements of performance management: systems, leadership and people. The following areas have been considered:

Is all the data we collect necessary?o Are we focused on what is important?o Are we measuring what matters?o What do key people want in terms of measuring performance?o What detail needs to be included?

Do we have meaningful targets?o Do we have targets for improvement in the right areas?o Are the targets useful?

Do we utilise the data to the fullest?o Do we use the information to drive service improvement?o Are we moving beyond just measuring performance to using it to

identify what is not working?o Are we acting on the outcomes/o Are individual teams owning their own performance management?

Do we disseminate information to the relevant people in the relevant way?o Do we report in a clear and helpful way?o Do we communicate to the right people?o Do we communicate in a timely fashion?

The information gathered during the review exercise and the use of best practice has lead to the production of an overall performance management strategy at BVT. Individual departmental performance frameworks have also been developed to help facilitate departments to manage their own performance.

3. Performance Management Framework

The performance management framework is in two sections. The first section looks at performance management in general, on an organisational basis. It highlights the

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main elements of performance management and how BVT can develop their overall approach.

Departmental performance frameworks have been compiled and will be used develop performance management within each key department

3.1 Leadership

Everyone at BVT has a responsibility for performance management but it is senior managers who must drive it.

Most importantly, managers must demonstrate that they use performance management and base management decisions on performance information.

Managers’ behaviour and actions are fundamental in embedding performance management throughout an organisation and, therefore, managers should:

Set out a clear vision. Clearly communicate performance expectations to other staff. Champion performance management. Follow through on improvement priorities. Allow staff the space and time for learning and development.

The role of Committees and Trustees is fundamental in ensuring performance management and performance information is being used effectively.

Although they must take a strategic role rather than micro-manage delivery, they must be hands-on with performance management to ensure that their objectives are met. They should to a greater or lesser extent be involved in:

Setting and scrutinising the strategic direction and priorities of the organisation.

Receive consistent performance reports that paint a clear picture of performance trends.

Ask questions about current performance and improvement plans. Seek assurance that adequate systems are in place to manage

performance, risk and resources.

In addition, it is recommended by the Audit Commission to have a performance management champion that can:

Scrutinise the executives’ use of performance management. Scrutinise officers’ use of it. Become involved in policy/service reviews.

To achieve this, the following should be continued or implemented:

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1. Performance data to be regularly provided to Trustees, Housing Services Committee, Shropshire Housing Service Committee, FAGP and Development Committee.

2. Provide performance data to frontline staff through team meetings/briefings and sharing reports with key staff.

3. Provide key performance data to Executive Team on a quarterly basis to facilitate a quarterly discussion focused on performance management across the organisation.

4. Continue to refer to performance data in the business plan.5. Consider using IPRs and 1-2-1s to monitor managers’ production and use of

performance management data.

3.2 Performance Indicators

Performance indicators are fundamental to managing performance and one of the key mechanisms used to assess performance. They provide information on the service which assists managers to identify good and poor performance. Performance indicators also allow us to benchmark our performance with other similar organisations.

The choice of indicators has a major impact on the operation and direction of the organisation and, therefore, it is imperative to measure what is important, not what is easy to measure.

It is suggested that four main perspectives should be covered, at a minimum, by performance indicators; this approach is known as a ‘balanced scorecard’:

Service user perspectiveDoes the service meet customers’ needs and expectations?

Internal management perspectiveThe identification and monitoring of the key processes by which a good quality and effective service is provided.

Continuous improvement perspectiveSecuring continuous learning and improvement processes in systems and people, and thus services.

Financial perspectivesHow resources are used in an economic and efficient way to achieve the objectives of the service.

When developing or reviewing indicators, there are 12 characteristics that can help ensure they are useful and effective:

Relevant

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PIs should relate to the strategic goals and objectives of the organisation or of a specific service area.

Indicators should be relevant to the people collecting and/or providing the data. The danger is that if an indicator is not seen as relevant, they will not bother to collect the information accurately.

Clear definitionA PI should have a clear and intelligible definition in order to ensure consistent collection and fair comparison. It should not be too complex so that people have difficulty in collecting the information, nor should it be too broad, which could lead to a number of ways of counting what is being measured.

Easy to understand and useIt is important that indicators are described in a way that the user will understand, avoiding management jargon.

ComparableThe PI should be comparable on a consistent basis both between organisations and over time.

VerifiableThe data needs to be collected and calculated in a way that the information can be verified. Robust data collection systems should be used, and good quality controls should be in place.

Cost effectiveThe cost of collecting the information should be balanced with its usefulness. New indicators should be designed to keep the burden on employees to a minimum, and obsolete indicators should be discarded to keep the cost of data collection to a minimum.

UnambiguousIt should be clear whether an increase in an indicator value represents an improvement or deterioration in service. Setting a target can often be helpful in reducing ambiguity.

AttributableService managers should be able to influence the performance measured by the indicator, either that it should be totally within their control or at least open to significant influence.

ResponsivenessPIs should be responsive to change. An indicator where changes in performance are likely to be too small to register will be of limited use.

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Avoid perverse incentivesIt is important to consider what behaviour an indicator ought to encourage. Indicators that might encourage counter-productive activity should be avoided if possible.

Allow innovationThe definition of an indicator ought not to deter organisations from developing innovative processes or coming up with alternative methods.

Statistically validPIs based on a small number of cases are likely to show substantial fluctuations.

TimelyThe PI should be based on data that are available within a reasonable time-scale.

At BVT, all departments have a set of PIs, that have been reviewed over the last 2 years.

In order to ensure BVT have meaningful Performance Indicators we should:

6. Review PIs on an annual basis to ensure they are still relevant.7. Each PI should be assessed as to whether it should have target set against it.

3.3 Targets

Using appropriate targets can help emphasise, communicate and achieve stated priorities. Targets specify time-bound levels for improvement that are usually based around a particular performance indicator. In essence, targets are a tool for improving performance against a particular measure over a given period of time.

Targets can: Promote accountability. Targets should focus on outputs or outcomes

that must be reported publicly. Help manage a service by focusing on particular outputs or productivity

measures. Stretch performance by identifying a goal that is difficult, but where all

progress is beneficial.

However, targets are not always the most appropriate improvement tool and should only be used to focus on things that really matter. The criteria for using targets are:

You can positively affect the outcome within the target’s timescale. There is enough predictability in the area of performance for a target to

be meaningful.

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It will focus attention on a particular area of importance. It will motivate people to look for new ways to improve. It will signal commitment to customers and other stakeholders. It is possible to monitor progress without disproportionate cost.

Targets should also be integrated into other performance/service plans.

Targets are not set consistently throughout departments at BVT. Much more emphasis needs to be placed on setting targets to drive improvements.

In order to develop meaningful targets we should:

8. Assess all PIs within individual departments and assess whether targets should be set, using the information above to make judgements, in consultation with residents

3.4 Continuous improvement and service reviews

The Audit Commission and the TSA measure whether our services are improving through inspection and desk top analyses. Improvements are also monitored through key performance indicators submitted through the RSR and annual Financial Returns.

Since 2000, there has been a Best Value regime which obligates RSLs to review services using the Best Value methodology of the four Cs: Challenge, Compare, Consult and Compete. There has been a Best Value programme within the Housing Services Department (including some elements of the Supported Housing function) for six years, and the Financial Services Department for the last five years. Service reviews in other departments have been very limited.

The Audit Commission (AC) Key Lines Of Enquiry (KLOE), are the mechanism by which the AC inspects the service provided by RSLs, including those outside the normal housing management function. KLOE 1 focuses exclusively on how the organisation is improving its services. In addition, under individual service areas, the AC provides information on what criteria it considers an excellent organisation might incorporate into the delivery of its service. This can be used as the basis for reviewing services and improving aspects of service delivery.

BVT has carried out desk top KLOE reviews, for all related KLOES.

The housing sector has been charged, by the Government, with making efficiency savings in the operation of its business and, within BVT, there is a policy of achieving 2% efficiency savings across the organisation year-on-year. In order to achieve this, organisations are focusing resources on Value For Money (VFM) audits and reviews to ensure that the services that are being delivered are cost effective, and identify where services can be improved for the same cost.

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A yearly programme of VFM audits are developed and carried out

During the business planning process in 2010 a comprehensive programme will be put together, in conjunction with Executive, SMT, and residents to bring together all the key elements of the reviewing process already in place, and ensure the programme reflects business, performance and resident priorities.

From 2011, the service reviews will be largely guided by the Scrutiny Panel, who will lead on reviewing performance from a resident perspective.

Most recently, the TSA have published their Regulatory Framework which sets out the key outcomes and expectations across six standards; Home, Tenancy, Resident Involvement and Empowerment, Neighbourhood and Community, Value For Money and Governance and Financial Viability. Housing Providers are also required to develop Local Offers with residents across the Home, Resident Involvement and Empowerment and Neighbourhood and Community standards. The development of service reviews should take into account areas where BVT need to develop services to meet, or to continue to meet the required outcomes and specific expectations of the TSA National Standards.

Individual departments or teams of staff should also be empowered to carryout small scale reviews as and when require

In order to develop meaningful continuous improvement measures we should:

9. Develop a comprehensive programme, year on year, of continuous improvement and VFM reviews reflecting the priorities of the business and residents.

10. Deliver a programme of continuous improvement reviews using Best Value principles, the KLOE frameworks and the TSA service standards year-on-year, identifying areas of good practice and areas of improvement.

11. Deliver the VFM audits year-on-year, identifying potential efficiency savings and areas where performance can be improved with no extra cost.

12. Ensure that improvement plans are developed following KLOE reviews, VFM audits and other performance and satisfaction reports by the relevant departmental managers that identify areas for improvement. The BIU will monitor and report progress against these on a three-monthly basis.

13. Review the programmes annually to ensure they are reviewing areas of priority.14. Individual departments to carry out ad-hoc, small scale reviews of specific

service areas if performance is showing a continuous decrease or showing characteristics that cause concern.

3.5 Customer Feedback and Satisfaction Measures

The input of the customer is paramount in delivering good quality, focused services. There is an obligation through the TSA and the Audit Commission that tenants are consulted over the service they receive, and also to have influence over how the service is delivered. However, the provision of services extends much more widely

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than tenants, to other groups such as leaseholders, owner occupiers, shared owners and private clients.

There is a performance management cycle that embeds a user focus:

There are a number of mechanisms available at BVT to gauge customer satisfaction and views on service provision. These include:

Ongoing Questionnaires; Ad-hoc Questionnaires; Telephone interviews; Peer interviews; Face-to-face interviews; Mystery shopper; Focus groups; Involvement in performance reviews.

Customer satisfaction measures are used across most services within the Housing Services Departments and the provision of support services, but are not regularly used within other departments.

Organisations should, however, also go beyond just surveying customers, to use customer intelligence: information about how, when and who is using the services. This information can be used to help shape the delivery and effectiveness of services, help managers to understand if they are reaching priority groups and help the organisation to reach its diversity and equality goals.

ReviewAssess the impact of

actions using customer satisfaction measures

PlanUse customer views to

plan services that meet user needs and

wants

DoEngaging customers in choosing and using the

right service and influencing outcomes

ReviseSeek opinions about what may need to

change

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Consultation and gathering information and views from customers are effectively carried out in many organisations but some are less successful at integrating this information into decision-making and performance management.

In order to develop meaningful Customer satisfaction measures we should:

15. Assess whether the customer satisfaction measures are fit for purpose and providing meaningful information, taking into account the performance cycle and how customers fit into this.

16. Where the data is not meaningful, the mechanisms should be changed to ensure they are collecting data that can be used to assess performance and identify areas for improvement

17. Where customer satisfaction measures do not exist within departments, develop a suite of relevant mechanisms to gather meaningful information.

18. Ensure that the information gathered is integrated into the decision-making process and the improvement of performance.

19. Ensure feedback is provided to customers on the outcomes of their input.

3.6 Benchmarking

The objective of benchmarking is to understand and evaluate the current position of an organisation and to identify areas and means of performance improvement.

The benchmarking process involves three key steps:

1. Understand in detail existing business processes.2. Compare own business performance over time, and with that of other

organisations3. Implement the steps necessary to close the performance gap.

BVT subscribe to Housemark which allows us to benchmark a variety of services with other housing organisation The services include organisational overheads, housing management, all aspects of maintenance, Estate management, arrears, lettings, empty properties, ASB, resident involvement and support services. It allows BVT to focus on:

Value For Money/efficiency issues Resident satisfaction Continuous improvement

It is imperative that the benchmarking that is undertaken is meaningful, so it is therefore important to select peers with similar attributes such as type/age of stock, number of properties, geographical areas etc.

There are other less formal benchmarking clubs based on specific services or geographical areas that can also be utilised and should be explored.

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20. Continue to use Housemark as the primary source of benchmarking21. Identify appropriate peer groups to benchmark with22. Identify and utilise other relevant bench marking groups, which will add value.

3.7 Risk management and tolerance levels

The purpose of risk management is to identify potential problems so that risk-handling activities may be planned and invoked as needed.

Monitoring performance, especially in risk based areas, allows the early detection of potential risks to key aims and objectives (such as achieving top quartile position of PIs) and also on an operational level (such as the increase in rent loss through voids, or an increase in rent arrears).

This timely detection allows early intervention, which may lead to lower levels of disruption to service delivery and be less resource-intensive. The measurement of risk can be implemented through target tolerance levels, e.g. when agreed standards are not achieved.

Tolerances should be set which, if a decline is noted against a set standard, further investigation is automatically carried out to deal with the problem. The appropriate trigger will depend on the type of service and measure but could include:

Two reporting periods of declining performance. A cost overrun/percentage overspend of a certain amount. Measured performance declining by a certain percentage or falling in

relation to other RSLs’ performance.

3.8 Reporting mechanisms

Information presented to Trustees, Committees, customers, managers and other stakeholders influence the decisions they make. All performance reporting should help answer the question ‘What do I need to know to make sure things get better?’

Performance reporting needs to be tailored for the specific customer or user. Instead of reporting large volumes of data, successful organisations build hierarchies of performance information that provide a balanced view of performance and are accessible to their specific audiences.

There are three main ways for presenting information: The provision of a number of set key performance indicators reported

regularly with additional commentary that explains the information. Traffic light reporting which uses visual markers where there has been

underachievement or where a target is at ‘risk’ of not being met. Exception reporting where measures are reported only if performance

differs from an expected standard.

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The performance reports to HSC, Trustees and Executive Team have recently been reviewed to ensure they are fit for purpose.

Performance information and feedback to customers is sometimes ad-hoc; the approach should be more consistent. This is being reviewed through the development of a communication strategy, being led by the Chief Executive.

In order to ensure we have robust reporting mechanisms we should:

23. Assess the reports produced to ensure they are fit for purpose, on a 2 yearly basis, or when a change in regulation requires it

24. Set tolerances or triggers against key performance data that automatically initiates further investigation into declining performance.

25. Continue to develop a communication strategy to ensure information is sent to customers in an effective and consistent way.

3.9 Policies, procedures and process mapping

Policies and procedures are what set the way a service is delivered. It is imperative that they are in place to ensure consistency in approach and also to ensure that a service is delivered in the most effective way.

Some policies and procedures are driven by regulation and government policy; however, most should reflect the priorities of the organisation.

Key policies and procedures should be spot-checked regularly to ensure they are being delivered consistently.

At BVT, there are extensive procedures in place within a number of departments; however, there are gaps in other departments that will need to be bridged. A Knowledge Management system has been implemented which will bring together all key procedures and policies within the organisation and present them in a process map format.

The BIU have administrative control of policies and procedures to ensure they are consistent in format, are reviewed regularly and can be translated into the Knowledge Management system.

An independent internal auditor has a programme of audits in key delivery areas to ensure key controls are in place and that they are being adhered to.

In order to ensure we have a robust suite of policies and procedures we should:

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26. Develop policies and procedures in departments where there are gaps.27. Review policies and procedures on an annual basis to ensure they are fit for

purpose and reflect internal and external priorities, good practice, and legislative and regulatory requirements.

28. Develop a spot-check schedule of key policies and procedures to ensure they are being delivered as per the procedure

3.10 Audit and validation of performance management systems

Quality assurance needs to be built in to ensure audit and good practice requirements are met. Some basic good practice measures include;

Ensure adequate audit coverage of PIs. This would be through the internal and external audit programmes

Clear processes and evidence of follow-up actions and recommendations following audit reports with follow-up or progress reviews.

Documented data collection processes Ensure good internal controls are established within the different levels of

data Data needs to be collected and calculated in a way that allows the data to be verified, in that, calculations can be broken down into their component parts

to be verified Any sampling methods and calculations need to be documented.

In order to ensure we have a robust suite of policies and procedures we should:

29. Have a robust audit programme in place, follow up all audit recommendations and report to the relevant groups/committees

30. Ensure Audit trails are built in to all policies and procedures related to collecting and processing performance data

31. Document sampling methods for all sample satisfaction surveys

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