Complex organizations implement performance measurement systems in order to give due attention to results, responsibilities and targets. For example, knowing the performance in terms of sales and customer satisfaction allows a manufacturing company to "feel the pulse" of the market and plan its future development. Managers utilize indicators to allocate assets or to make decisions on the best strategies.
While quality standards have become central operational tools for organizations, performance indicators are the communication protocol of their health state to the outside world. An extensive empirical research, carried out in the United States, showed that the organizations winning quality awards are usually those with higher profits (Hendricks and Singhal 1997).
But how can we recognize the quality of organizations? Paraphrasing the standard ISO 9000:2015 (2015), quality is the ability to fulfil different types of requirements - e.g., productive, economical, social onesâ€”with tangible and measurable actions. Quality is a basic element to differentiate an organization with respect to its competitors. To make quality tangible, it is firstly necessary to identify stakeholders' needs. Then it is necessary to fulfil these needs effectively, using the available assets (i.e., processes and resources). This requires a careful analysis if the evolution of processes; performance indicators are suitable tools to achieve this purpose.
Indicators are not just "passive" observation tools but can have a deep "normative" effect, which can modify behaviour of organizations and influence decisions. If a production-line manager is trained to classify the products that are spread over the market as "good", his/her attention will be directed towards maximizing the diffusion and expansion of these products; unintentionally, this strategy could sacrifice long-term profits or investments in other products. If a call center administrator is recompensed depending on his/her ability to reduce absenteeism, he/she will try to reach this target even if that will not necessarily lead to increase productivity.
About This Report
know-how and technology;
working practices, methodologies and procedures.
performance evaluation of several organizational aspects (processes, suppliers, employees, customer satisfaction, etc.);
market analysis (shares, development opportunities, etc.);
productivity and competitor analysis;
decisions about product innovation or new services provided.
Customer focus. Organizations must understand the customer needs, requirements and expectations.
Leadership. Leaders must establish a unity of purpose and set the direction that an organization should follow. Furthermore, they must create the conditions for people to achieve the objectives
Engagement of people. Organizations must encourage the commitment of employees and the development of their potential at all hierarchical levels.
Process approach. Organizations are more efficient and effective when adopting a process approach to manage activities and related resources. This approach must also be systemic, i.e. interrelated processes should be identified and treated as a system.
Improvement. Organizations must be encouraged to continuously improve their performance.
Evidence-based decision making. Strategic decisions should rely on the analysis of factual data.
Relationship management. Organizations must maintain a mutually beneficial relationship with interested parties (e.g., suppliers, service providers, third parties, etc.) so as to help them create value.
Published by Springer Nature Switzerland AG 2019