PERFORMANCE MEASUREMENT USING OMAX Why do organizations resist measuring productivity?  Inadequate accuracy  Lots of paperwork  Lack of qualified measures

OMAX It is a measurement method Its applied to basic work units like crews, departments & staff The theory – “ Productivity is a function of several performance factors each with distinct dimensions that vary among work-units”

Formats and Functions of OMAX  Employs multi-dimensional format  Accommodates employee involvement and managers  By Definition a Matrix is “ Leadership to produce a single measurement that represents the productive within which, something performance of an organisational nit originates, takes form.”

Genetic Classes of Productivity Criteria Six genetic categories that define a person’s work units or total organization's contribution to productivity  Quantitative: No of items produced as output  Quality: Customer Satisfaction  Timelines: Elimination of delays  Yield: Input minimization / waste reduction  Utilization : Effectiveness with which critical resources are utilized  Group Traits : Individual or organisational properties that contribute to productive performance

Evaluation of Matrix Defining, quantifying & monitoring of performance are the major steps in evaluating performance matrix Two or three ratios may be required to account for quality

Performance Score Performance scales in the body of the PMAX run from 0 to 10. There are :  Levels of accomplishment for each criterion  A single criterion occupies a column that stretches from top to bottom of the matrix  Levels of accomplishment extend across the body of the matrix.  Levels of accomplishment extend across the body of the matrix as indicated by rows marked from 0 to 10.

Continued …………………. The assignment of the results expected at each level is the crucial part of scaling, because the results set specific hurdles. This reflect the accomplishment of a work – unit’s productivity objectives. The scale is anchored by designated numbers at 3 levels Level 0 : Lowest Level recoded for the criterion ratio Level 3 : At the time rating scale was established that level of performance Level 10 : A realistic estimates of results that can be attained in near future – 1 to 2

Continued ………………….  The Omax gets its name from the level 10 goal. Level 0 and 3 are the clearly defined bench marks but level 10 is the challenge  The scoring columns for all the criterion are completely determining the appropriate entries for the cells between the bench-mark levels

Example of OMAX

SUM In order to be more competitive, M/S Global Ind. Uses OMAX for the measurement of productivity of the organisation. Management has decided to consider following 5 factors to be of importance in arriving at the overall productivity, which are given in the following chart. The worst results were obtained during the last year are given and the scale was prepared about 4 months back and Level 3 figures are also given. The objectives (Level 10) have been fixed for the current year. Prepare OMAX chart and evaluate performance of the 2 quarters, data of which has been collected and given below.

Factors%‘0’ Level Figures ‘3’ Level Figures Objective fixed I QuarterII Quarter 1) Machine utilisation ) Efficiency ) Rejections ) Return on investment ) Absenteeism The weightage decided for above 5 factors 25,20,25,15,15 resp.