Measuring and Managing Team Performance: A Balanced Approach Researcher: Kepa Mendibil Telleria Supervisor: Dr Jillian MacBryde DMEM Research Presentation Day 24 January 2003 DMEM DMEM

Contents Research area & background Research questions Methodology Results & findings Contribution of the research

Research area & Background ‘A team concept is central to the development of process-based management and it is one of the few means by which large business processes can be integrated ‘ (Teare et al) Over half of the Fortune 1000 are implementing self-directed teams Implications: Increase empowerment Increased accountability Increased emphasise on measuring and managing team performance

Common Problem FUNCTIONS Manage processes PROCESSES Operate processes Conflicts between departmental and processes managers PROBLEMS: Business Process objectives are not aligned with company’s strategy Employees have a lack of the company’s vision worsening of employee participation Manage processes Support processes PROCESSES Operate processes Employee performance measurement is not aligned with process performance and organisational objectives Lack of understanding on how to measure team performance

Why do teamwork attempts fail? ‘Traditional ways of measuring performance, determine compensation, provide training, and even organize facilities are tailored to vertical units, not processes, and to individuals, not teams’ (Hammer & Stanton, 1999) Need to develop a better understanding on how to manage and measure team performance

Research questions RQ1. How do current organisations tackle the issue of team performance? RQ1.1. Why is TPM difficult? RQ2. Is there a need for a tool that facilitates TPMS design? RQ2.1. What are the requirements of a TPMS development process? RQ2.2. Do current methods fulfil those requirements? RQ2.3. What are the drawbacks? RQ3. If yes, how should such a tool look like? RQ4. How does such a tool impact on organisations?

Methodology: Research Phases VALIDATING AND EVALUATING Jan02 – Jan03 Phase Activities Outcomes PRE-UNDERSTANDING Jan00 –Sep00 THEORY BUILDING Aug00-Jun02 THEORY TESTING Jun01 – Sep02 Novelty of research Discussion groups Broad literature review Specific literature review Practical relevance Exploratory research (Phase 1): 4 case studies Industrial workshops Seminars Applicability of The tool in Different environments Exploratory research (Phase 2): 6 ‘best practice’ case studies Case studies Expert opinion Action Research Focus group discussions Reliability of Research process Research problems RQ1, RQ2 -Research gap -RQ3, RQ4 -Typology for TPMS design -Theoretical framework -TPM workbook -Theoretical framework and workbook verified and improved -Findings -Reliable answers to research questions -Proved novelty of the research

Pre-understanding 4 case studies: EPSRC project collaborators 6 ‘best practice’ case studies Litton (electronics) NCR Rank Xerox (Sales and Service) Irizar (Coach manufacturer, Basque Country) Maier (Plastic moulding, Basque Country) ITP (aerospace, Basque Country)

Pre-understanding All organisation deemed team performance measurement (TPM) as an important aspect Organisations are measuring team performance in an ad hoc manner Teams using performance measures systematically: were further advanced in the team development scale combined process measures with other variables affecting team performance (e.g. EFQM self-assessment) had a better understanding about customer requirements had a more systematic and transparent ways of communicating and deploying company strategy Managers and team leaders suggested that it would be beneficial for industrial organisations to develop a practical tool to facilitate and assist in developing TPM systems 3 main areas impacting team performance Process management Team management Organisational support management

Theory Building (TB) Development of TPM typology Do current framework meet TPM requirements? if yes Re-think research questions if no Develop TPM framework Construct practical tool Apply model/tool and extract learning Contribution to Knowledge

TB: Typology of TPM development process Built upon previous typology for PMS development process (Hudson et al, 2001) Input from a variety of research disciplines (e.g. HR, organisational psychology, operations management) Classified into 3 areas: Development process Characteristics of measures Dimensions of team performance Criteria for team performance: Team effectiveness: How well does the team achieve its process/task objectives? Team efficiency: How do team processes affect the capability of team members to work together in the future? How satisfied are the team members? (Combination of personal growth and satisfaction Provide a balanced view of team performance – i.e. relate measures to those drivers for team performance

TB: Factors affecting team performance (1) Team task/process Interdependence Technology Significance Skills variety Autonomy (2) Team characteristics and processes Structure and composition: e.g. Team type, size, heterogeneity, roles, norms, goal clarity, Skills Knowledge and Attitudes, Commitment, Accountability, Autonomy Internal processes: e.g. Communication, Coordination, Leadership, Learning, Collaboration, Monitoring, Feedback, Decision making, Conflict resolution, Innovation External processes: e.g. Integration, Coordination, Communication, Cooperation (3) Organisational support Training Rewards Information systems Physical environment Strategic alignment

TB: PM models vs TPM typology Most available PM frameworks/models do not analyse performance from a team perspective Those that do, only focus on measures related to the team process/task Current frameworks do not consider those key factors that drive team performance There is a lack of integration between theory on team effectiveness and theory on performance measurement There is a need for a tool to facilitate TPMS design

Theoretical framework Company strategy Customer requirements TPMS Deployment path Team Performance Measures Acceptability of task/process output Capability of team members to work together in the future Team member satisfaction Deployment path Deployment path

Theoretical framework Defines a deployment path including five considerations: Expectations (company, process and team) Requirements (process, team, organisation) As-is analysis (current performance vs. desired) Improvement Action Plan Performance Measurement

Theoretical framework (1) What do we want the process to do? (2) What does the team need to do? -Team Competencies (Knowledge, Skills, Attitudes) -Team processes (3) What is currently the team doing? How does this affect process performance? (4) Improvement Action plan (5) Team Performance Measures Deployment path

Theory Testing Theory and workbook was tested through: 4 industrial workshops with Australian organisations (around 15 organisations) 2 further case studies: Honeywell, Polaroid 4 industrial seminars Focus groups Expert opinion Action Research in Highland-Spring

Action Research (AR) in Water Bottling Co Objective - ‘To enhance the cross-functional integration of the manufacturing process team through the development and implementation of a team based performance measurement system.

AR in Water Bottling Co. Product Manufacturing Team Engineering Laboratory Quality Assurance SUPPLIER CUSTOMER Blowmoulding Good Inwards Filling & Packaging Warehouse Material flow Service flow Look at company and departmental strategy Define objectives and measures for the process Align training to competency requirements Define other organisational issues required to maximise team performance

AR in Water Bottling Co. RESULTS ENABLERS Team Performance Measures OEM Cost per case Employee Satisfaction Job satisfaction Growth needs satisfaction Organisational commitment Skills required vs available (training matrixes) Employee involvement Number of implemented suggestions Process performance Employee satisfaction Team competitiveness ENABLERS Process Measures Downtime Analysis Estimated vs real changeover time First hour efficiency Delivery reliability Estimated vs Real manning level Non-budgeted overtime analysis Teaming Measures Employee productivity Employee surveys (interdepartmental) Performance appraisal analysis Communication Boundary management Organisational Support Measures Planned vs delivered training HS vs ‘best practice’ benchmark Employee survey % of teams/individuals with goals aligned to company strategy and process objectives

Results & findings General The application of the TPM framework enables to highlight those key areas that were not previously addressed Teams at different developmental stages require the use of different performance measures TPM framework was applied in a wide range of industries and thus, we argue that it could be used by a diverse type of organisations TPM framework is applicable with teams carrying out a variety of tasks and at different organisational levels TPM as a local management tool and a bottom-up approach The TPM framework complements other PM models used by the organisations The generic nature of the framework does not allow to explicitly identify key factors and measures for different type of teams at different organisational levels and developmental stages

Results & findings Related to Action Research Related to methodology TPM measurement as a way of increasing management involvement TPM facilitates the growth in focus and involvement of team members But, all the above when considering the bigger context Related to methodology Usefulness of combining different research strategies

Contribution to knowledge was made by…. Developing a better the understanding of the implications of BPR into team performance management and measurement Better understanding the limitations of current methodologies for measuring team performance Further developing the understanding of performance measurement in the context of teams by integrating theory of team effectiveness into research on performance measurement to practice was made by…. Developing a practical tool (based on a theoretical framework) that facilitates organisations to assess and manage their teams

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