Work Unit Input Measures

In order to establish goals (and evaluate performance against them), input measures must be developed and regularly monitored.

Input measures describe the resources, time, and staff utilized for a program. Financial resources can be identified as current dollars, or discounted, based on economic or accounting practices. Nonfinancial measures can be described in proxy measures. These measures are not described in terms of ratios. They are often used as one element of other measures such as efficiency and effectiveness measures.

Examples:

1. Total funding
2. Actual number of labor hours

Work Unit Output Measures

In order to establish goals (and evaluate performance against them), output measures must be developed and regularly monitored.

Output measures describe goods or services produced. Outputs can be characterized by a discrete definition of the service or by a proxy measure that represents the product. Highly dissimilar products can be rolled up into a metric. As with input measures, these measures are not described in terms of ratios. They are often used as one element of other measures such as efficiency and effectiveness measures, which are described later.

Examples:

1. Number of line items shipped
2. Number of pay accounts maintained
3. Dollar of sales
4. Net operating result
5. Total number of transactions for the period

Work Unit Efficiency Measures

In order to establish goals (and evaluate performance against them), efficiency measures must be developed and regularly monitored.

Efficiency is the measure of the relationship of outputs to inputs and is usually expressed as a ratio. These measures can be expressed in terms of actual expenditure of resources as compared with expected expenditure of resources. They can also be expressed as the expenditure of resources for a given output.

Examples:

1. $\text{Unit}\text{cost}\text{per}\text{output}=\frac{\text{total}\text{cost}\text{of}\text{operations}}{\text{\#}\text{of}\text{completed}\text{transactions}(orunitsproduced)}$

2. $\text{Labor}\text{productivity}=\frac{\text{\#}\text{of}\text{completed}\text{transactions}(orunitsproduced)}{\text{actual}\text{\#}\text{labor}\text{hours}}$

3. $\text{Cycle time}=\frac{\text{\#}\text{days}\text{to}\text{complete}\text{job}\text{order}}{\text{\#job}\text{orders}\text{completed}}$

Work Unit Effectiveness Measures

In order to establish goals (and evaluate performance against them), effectiveness measures must be developed and regularly monitored.

Effectiveness measures are measures of output conformance to specified characteristics.

Examples:

1. $\text{Quantity}=\frac{\text{\#}\text{computers}\text{repaired}}{\text{\#}\text{computers}\text{requiring}\text{repair}}$

2. $\text{Timeliness}=\frac{\text{\# transactions}\text{completed}\text{by}\text{target}\text{time}}{\text{total}\text{\#}\text{transactions}\text{for}\text{period}}$

3. $\text{Quality}=\frac{\#\text{defect-free products received by customers}}{\text{\# products received by customers}}$

4. Customer satisfaction
   1. Customer satisfaction survey results
   2. Complaint rates

Work Unit Direct Outcomes

In order to establish goals (and evaluate performance against them), direct outcome measures must be developed and regularly monitored. Direct outcome measures assess the effect of output against given objective standard.

Examples:

1. System-readiness rate
2. System-literacy status of eligible population

Work Unit Impact Measures

In order to establish goals (and evaluate performance against them), impact measures must be developed and regularly monitored. Impact measures describe how the outcome of a program affects strategic organization or mission objectives.

Example:

1. Impact of system on productivity of workers

Diagnosis

In order to implement a customer-driven strategy in an organization, you must first learn what you are (and are not) doing now that will drive or impede the quality improvement process. An internal evaluation, or diagnosis, of key areas and processes in the organization can help you determine what you are doing right and where improvement is needed. Doing things right means

• Defining customer requirements
• Turning customer requirements into specifications
• Identifying key indicators that can be tracked to learn which requirements are being met and which are not

Warranties/Guarantees

Warranties and guarantees demonstrate the organization’s commitments to customers. Whether explicit or implicit, they are promises made to customers about products or services. These commitments should promote trust and confidence among customers in the organization’s products, services, and relationships. Make sure that the organization’s commitments

• Address the principal concerns of customers
• Are easily understandable
• Are specific and concise
• Are periodically revisited to ensure that quality improvements are reflected
• Compare favorably with those of competing companies

Supplier Activities

Quality results demand that supplies, materials, commodities, and services required by the organization meet quality specifications. One of the best ways to ensure this is to develop long-term relationships with suppliers. The purchase of supplies should not be made on the basis of price tag alone. The development of a long-term relationship requires that the supplier also be concerned with quality and work with the organization as part of a team effort to reduce costs and improve quality. Some ways to involve suppliers as part of your team include

• Having suppliers review a product or service throughout the development cycle
• Making sure your suppliers know how you define quality requirements
• Working with suppliers to agree on quality goals

Cost-Effectiveness

This is an evaluation process to assess changes in the relationship of resources to (1) an outcome, (2) an efficiency rate, or (3) an effectiveness rate.

Examples:

1. Outcome: Is it cost effective to spend 10% more resources to improve base security by 5%?
2. Efficiency: Will an investment in equipment whose depreciation increases unit cost by 5% reduce operating costs by more than that amount?
3. Effectiveness: Will a change in the process result in the same efficiency rate but at a much improved effectiveness rate, as measured by quality, timeliness, and so on?