BUSINESS

RELATIONSHIPS

Establish and maintain business relationships SITXMGT501

Session 6 : Key Performance Indicators

Review from last week

Last week we discussed:

Organisational Culture

Benefits of Organisational Culture

Considerations we should make

Types of Organisational Culture

Linked with planning of your Negotiation

Any questions?

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Homework from last week

Last week you were asked to:

Continue planning your Assessment 2

Complete Activity 3: Organisational Culture

Please submit now

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Introduction

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Last week we discussed Organisational Culture

and its impact and influence on negotiations. After

considering this, you need to consider the finer

details and what outcomes you want from you

negotiations.

Today we will discuss, KPI’s, Key Performance

Indicators which you must consider during your

planning stage.

Key Performance Indicators

What is meant by the term “KPI”?

Why must we consider these before

negotiating?

What should we include?

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Key Performance Indicators– A definition

Key Performance Indicators refers to:

“A set of quantifiable measures that a

company or industry uses to gauge or

compare performance in terms of meeting

their strategic and operational goals.”.

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Key Performance Indicators – An example

A company must establish its strategic and

operational goals and then choose the KPIs which

best reflect those goals.

For example:

If a Hotel chains goal is to have the fastest growth

in its industry, its main performance indicator may

be the measure of revenue growth year-on-year.

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Where do we begin?

When we talk about business planning and setting

objectives we need to think at two levels:

What to do or get done, the steps to take

What is to be achieved, the final outcome

So how does this relate to your Planning of your

Negotiation?

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Key Performance Indicators – The basics

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Tasks Objectives

Procedures Outcomes

Process Achievements

Jobs Activities Measures Milestones

Means Ends

KPI’s – The basics as an example

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Examples Student

What to do How this is measured

Apply Date/form/send to..

Accepted Selection Criteria, Formal letter, time and place

Enrol Fill Out/Pay/Supply details/Student card

Attend Class/time/location/time span

Do the work Read/discuss/present/write/make/fix/show/amend

Submit assessment Form/time/place/signature

Perform practical tasks Place/time/dress/equipment/procedures/technology

Cook/set up/pour/taste/clear/measure

Assessed as competent Yes/No, or attain a score that satisfies

Graduate Apply/dress up/walk on/receive certificate

What KPI’s should you have?

How can you measure?

What do you measure?

Now think about your assessment scenario?

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Measuring Key Performance Indicators

You can measure a KPI by:

Figures, statistics and spread sheets

Evidence of physical objects and/or products

Records and papers

Observation

Talk, Listen, Ask, Explain

Written reports and documents

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Measuring Key Performance Indicators

You can measure a KPI in terms of:

Quality

Quantity

Cost

Timeframes

Efficiency

Compliance with a standard, procedure or

requirement

Creativity

Personal qualities

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KPI’s – A Restaurant example

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Example Restaurant

Preparation Food, seating and tables, staff, cash float

Open Table settings, menus

Greet and seat Timeframe, waiting time

Service Communication skills, language, problem solving, politeness

Selling Explain products, up-sell specials, encourage return visit

Payment/revenues Use technology, check credit card details, approval , signature

Health and safety Food, chemicals, spills, lifting, work breaks

Staffing levels Roster, classification, sign on, casuals, supervision

Inventory purchases Check deliveries, documents, use-by dates, stock rotation

Accounting-Taxation Legal and accounting records for cash, GST, wages

Maintenance Programmed and ad-hoc

RSA Hours, location of selling, under age, intoxicated patrons

What can we measure with a KPI?

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Front Office Room Service Function Room Bar/Tavern

Back to your Planning

For your practical negotiation, you will consider

and identify your goals and outcomes. You

therefore need to consider how you will measure

the outcome of your negotiation to discover if you

are successful or not.

Your KPI’s will let you know the result of your

Practical Negotiation but also your success in this

unit!

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What do you have to do?

Firstly, identify clear goals and objectives of your

negotiations. From these, identify how you can

measure their success after the negotiation.

Show as much detail as you can so that it will be

clear;

when

where

how

to what level

and within what tolerance

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KPI’s – A SMART Approach

When you begin to develop your KPI’s, it is

important that they are SMART.

SMART stands for:

SPECIFIC

MEASURABLE

ACHIEVABLE

RELEVANT

TIMELY

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KPI’s – SPECIFIC

Clearly explains to employees what they have to

do (their performance) to be successful

Distinguishes between effective and ineffective

performance

Focuses on the behaviour itself, rather than

personality attributes such as 'attitude to

customers'

Terms such as 'work quality‘ or 'job knowledge'

are too vague to be of use

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KPI’s – MEASURABLE

Based on behaviour that can be observed and

documented

Must be job-related

Managers must also provide employees with

ongoing feedback on their standard of

performance

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KPI’s – ACHIEVABLE

KPI’s must be seen by all that they are

achievable.

The KPI must be realistically achievable.

If it is set too high for the circumstances (such

as an ambitious production target), not only will

it be irrelevant but it will ensure failure.

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KPI’s – RELEVANT

It is essential that employees:

clearly understand the KPIs

that they have the same meaning to everyone

concerned

proper consultation occurs as it is more likely to

result in standards that are relevant and valid

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KPI’s – TIMELY

KPIs should have an appropriate time frame

It should be possible to collect the relevant

information either 'as it happens' or within a

short time afterwards, otherwise it will lose its

relevance.

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Comment on these KPI’s

Build environmental sustainability into each

business activity

Implement new brand standard before financial

year end

Host a minimum of one guest speaker per

semester

Industry client stakeholder satisfaction rating

exceed 90%

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Homework

Please complete the following homework:

Continue planning your Assessment 2

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Next class

Thank you for listening. Any questions?

Our next class we will discuss and experience

“The Wedding Planner”.

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