1. chapter 18 Futher aspect of performance mangement
田宇祺,戴可,许建威

2. VALUE FOR MONEY
NPO
FUTHER
EXTERAL CONSIDERATION

3. WHAT IS NPO ?
A not-for-profit organisation is … an organisation whose attainment of its prime goal is not assessed by economic measures. However, in pursuit of that goal it may undertake profit-making activities.

4. Characteristic of NPO Non-quantifiable objectives
Not driven by maximizing profit
Do not generate revenues
Limited resources

5. Value for money (VFM)
A common method of assessing public sector performance is to assess value for money:
Economy
Source the resource input at the lowest acceptable cost
Measured by reference to quality of resource inputs
The purchase of poor quality materials and inferior services represents ‘false economy’
Efficiency
Maximize the output of services for a given level of resource input
Effectiveness
Match the service provision to the need
Focused upon achievement of objectives: how well are the organisation’s objectives being met?
A NFP organization will invariably have a number of objectives

6. P.M. in NFP organisations
Cost and benefit analysis
Undertake cost and benefit analysis of projects in an effort to place a monetary value on the service provision.
Judgment
Accept that performance measurement must to some extent be subjective. Judgments can be made by experts in that particular NFP activity.
Comparisons
Facilitate regional benchmarking by introducing adjustment factors to compensate for know regional disparities e.g. permit higher rates of pay in high wage locations; there is less of a problem with confidentiality and so benchmarking is easier.
In practive, benchmarking usually encompasses：
Regularly comparing aspects of performance (functions or processes) with best practitioners
Identifying gaps in performance
Following through with implementing improvements
Following up by monitoring progress and reviewing the benefits

7. 3Es + 3 judgment —— subjective comparisons External consideration
NFP P.E.
cost —— benefit
3Es judgment —— subjective
comparisons
External consideration

8. performance management
Financial performance
indictors
Non financial performance indicators
performance management
External consideration

9. External considerations
When devising performance measure for any organisation,consideration
needs to be given to three key external factors
1.Stakeholders
2.Economic environment
3.Competition

10. 1.Stakeholders Internal stakeholders (employees, management)
Connected stakeholders (shareholders, customers, suppliers, financiers)
External stakeholders (the community,
government, pressure groups)

11. company may set different performance So
company may set different performance
targets and measurements according to
different stakeholders'objectives

12. 2.Economic environment Economic growth Local economic trends Inflation
Interest rates
Exchange rates
Government fiscal policy
Government spending

13. 3.Competition
We considered the effects of competitors' behaviour when we looked at pricing strategies.
Performance management must consider information on competitors' prices and cost structures and identify which features of an organisation's products add most value. Management accounting information has to be produced speedily and be up-to-date so that managers can react quickly and effectively tochanging market conditions

14. thank you!