1. How to Write a (USABLE) Performance Metric Dan Tobin, CPPS, FAA & Kim Doner, CPPM, SRA International 1

2. Metric 1 Goal: Increase customer satisfaction. Metric: Measure customer satisfaction by conducting surveys. 2

3. Metric 2 Goal: Ensure compliance for the reporting of excess personal property. Metric: Measure the completion of the processing of Excess reports 3 3

4. Measure Measure: The verb means " to ascertain the extent, dimensions, quantity, capacity, etc., of, especially by comparison with a standard: to measure boundaries." Measurement: The figure, extent, or amount obtained by measuring" Metric: "A standard of measurement" 4

5. Benchmark A standard of excellence, achievement, etc., against which similar things must be measured or judged: The new hotel is a benchmark in opulence and comfort. Any standard or reference by which others can be measured or judged: The current price for crude oil may become the benchmark. Definitions from http://www.dictionary.com 5

6. Setting Goals “Improve customer satisfaction”, “Be the best company in the business”, “Improve efficiencies”. 6

7. The Process Choose goals that are worthwhile. Choose goals that are achievable. Make your goals specific. Commit to your goals. Prioritize your goals. Set deadlines to accomplish your goals. Evaluate your goals. 7

8. Key Performance Indicators (KPI) KPIs are quantifiable measurements that reflect the critical success factors to an organization. 8

9. Examples A Government Contractor may have as one of its KPIs the percentage of its income that comes from return customers. A Federal Agency may focus its KPIs on the reutilization rates of its excess personal property. A Help Desk may have as one of its KPIs, in line with overall company KPIs, percentage of customer calls answered in the first minute. A KPI for a Human Resources department might be number of clients assisted during the year. 9

10. KPI vs. Balanced Scorecard 10

11. Reflecting Goals Many entities have Business Plans and these goals may come from, or support the Business Plan. 11

12. Generate More Repeat Customers!!!!!! 12

13. KPIs Must Be Measurable "Increase Profits from Surplus Property Sales“ – Measure by the number of items sold or by the dollar value of the sales. – Will profits be based on the acquisition value or the depreciated value? – How will you handle voided sales or sales returns? 13

14. Set Targets Goal - “Increase Profits from Surplus Property Sales” KPI - “Sales Rate” Target - "Increase profits by five percent per year" 14

15. KPIs Must be Benchmarked Goal – “Increased Customer Satisfaction” Mfg Dept KPI – “Number of Units Rejected by Quality Inspection” Sales Dept KPI – “Minutes a Customer is on Hold Before a Sales Rep Answers” 15

16. Good Key Performance Indicators vs. Bad Title of KPI: Increase Sales Profits Defined: Increase Profits from Surplus Property Sales Measured: Total of Sales By Region for all Regions Target: Increase each month 16

17. Good Key Performance Indicators vs. Bad Title of KPI: Increase Sales Profits Defined: The total dollar value of property sold divided by the number of items sold. Sales for scrap condition property will not be included in this calculation. Measured: The (sales system of record) contains records for each item sold. The system lists the acquisition cost and the sales price by item. On a monthly basis, the Sales group will query the database and provide reports to XXXX showing the number of items sold, the acquisition value, and the sales proceeds received for each item. The report will display the cumulative profit margin for each region and a total for all regions. Target: Increase profits by five percent per year 17

18. Personnel Metrics Productivity Efficiency Training Goal Setting 18

19. Productivity Metrics Refers to the amount of work an employee accomplishes in a specific time frame, such as a single work day. 19

20. Efficiency Metrics Efficiency is the result of maximizing productivity with minimum effort or expense. 20

21. Training Metrics Employee training programs work improve employees' performance in some way. 21

22. Goal Setting Metrics Collaborative performance review systems bring employees and their supervisors together to set individual performance goals. 22

23. Back to Our Original Goal Goal: Ensure sound internal controls and compliance for the accountability and financial reporting of excess personal property. Measure: Ensure timely completion of the processing of Excess reports in accordance with the current Business Plan Goals. 23

24. Identify the KPI!!! The PDO needs to review and accept or reject ROEs in the accountable system of record in a timely manner. OR The PDO needs to review and accept or reject ROEs in the accountable system of record within 3 days”. 24

25. Or The PDO must review, accept, or reject ROEs in the accountable system of record within 3 days of date of ROE entering the PDO Approve/Process Document queue in the accountable system of record. That is measurable! 25

26. Parts of the KPI Title Definition Measurement Target 26

27. So…. Title of KPI: ROE Acceptance/Rejection in the Accountable System of Record Definition: The PDO must review, accept, or reject ROEs in the Accountable System of Record within 3 days of date of ROE entering the PDO Approve/Process Document queue in the Accountable System of Record. Measurement: Time between the date the ROE enters the PDO Approve/Process Document queue in the Accountable System of Record and the date the PDO reviews/accepts/rejects the ROE in the Accountable System of Record Goal: 100% of ROEs reviewed/accepted/rejected by the PDO in the Accountable System of Record within 3 days of ROE entering the PDO Approve/Process Document queue in the Accountable System of Record. 27

28. Use Your Metrics Once you’ve established them….use them! – Communicate – Post – Review – Share success – Reward 28

29. Measure to Manage Measure what's important. Publish your metrics and benchmarks. Reward people for exceeding their goals. And then start over. You'll be a better manager if you do. 29

30. 30 Questions Questions….questions….questions….questions ….