Performance Evaluation in a Context of Management System
You "evaluate performance" at three levels. These levels are Operation, Process and System.
Imagine you are watching a dancer performing a form of art in a theater.
- Dancer is performing an operation. You evaluate the final work output or delivery of art through work of a dancer. This is (9.1) the monitoring of the work output. It includes the customer satisfaction.
- But, behind the dancer, there are musicians, song writers and costume designers and light boys and so on. These "perform processes" that enable the dancer in her acts of delivery of the art. This is called the audit (9.2) or process performance evaluation.
- Behind the processes, there is system. System is evaluated (9.3) for its performance with respect to the top management policies, provisions of the resources and responsibilities. To evaluate performance of system is called the management review.
KPI or key indicators of performance in context of a business are therefore, divided in the said three different points of view to make it worthwhile.
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Performance (in Cambridge Dictionary) means how well a person, machine, etc. does a piece of work or an activity.
To evaluate performance of a Product or Live Operation is no different than watching an artist dance in a theater. Because, this is a final delivery of a work output, monitoring is held in a real time or periodical. No letup permitted.
A MONITORING therefore aims at evaluating performance of PRODUCT (result of work) or OPERATION.
If any defect occurs, the dancer would try her best to correct it right there as much as it is in her capacity. This immediate action to resolve a glitch in operation is called CORRECTION.
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Behind the artist, there are people in background such as the musician, singer, light boy and costume etc. They manage the PROCESS. Without a valid process, product won't be as good as it should. To evaluate how well did processes contribute to live operation or the final product, is the purpose of Audit or Evaluation of Process.
AUDIT is a name for evaluating performance of PROCESS
Changing a Process is not CORRECTION. A change is process is need based e.g., with a purpose such as to improve the product or remove certain defect in existing product or for ease in operation. This Process Change is CORRECTIVE ACTION aiming at preventing re-occurrence of defect in work. Alternatively, a Process Change can be introduced to address a new or changed product requirement or, to meet new Goal or new situation.
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Behind the Process, there is a System. A system has a vision, policy, goals and an assurance against any risks. This is work of a Director or owner of a theater.
To evaluate how well did the management SYSTEM work towards realization of vision,policy, goal, reputation is called the REVIEW.
Management review is for evaluation of performance of a SYSTEM for the completed period, its continued suitability, the need to respond to internal and external issues (such as risks), as well as revise/set up new vision, policy, goals and, make required arrangements. The review such as these are presented by the management to employees, customers, investors, society and public authorities, regularly (for example, at least once in a year). This is a reason it is called Annual Report.
Review is a final test of a System. If an organization failed to achieve its commitment or policies/goals, there is something seriously wrong in its management system. Should not have the monitoring of operation taken a notice of any deviation from the target? Or, if it did, why did the process not listen to it, and acted in time? Was it a case that no audit of processes taken place? If yes, why were they not effective? Should the management know these failures so much late (when every such things failed)?
Failure to meet policy/goal for a given period for the entire organization is, a failure of the System designed only for those policy/goal. Is not it? This situation is seen when Management in the annual report regrets at a certain point by explaining why did it fall short of the expectation and what action it is going to take, what it is expecting from those action and when it will fructify. The Director makes assurance that diagnosis or risk assessment is carried out to find weaknesses in the system, and she/he and her/his team is committed solve it. This is 'going forward' or a SYSTEM IMPROVEMENT. This term 'system improvement' traditionally called Preventive Action that was aimed at to not let a non-conformity occur even once.
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In requirement of section [9.] Performance Evaluation for the management system such as ISO 9001:2015, ISO 14001:2015 and ISO 45001:2018 is divided in three parts. 9.1 Measurement, Monitoring and Evaluation [Operation and Product or Work Output], 9.2 Internal Audit [Process -Adequacy and Compliance], 9.3 Management Review [Management System]. The purpose here is to understand these concepts with an examples from our lives and a business case.
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In context of Occupational Health and Safety Management System ISO 45001:2018, product or operation is ACTUAL WORK. A cook (chef) is like artist in a theater. He is well dressed in PPE kits, uses gas and knife skill fully and makes food using the procedures. There is no difference between Artist and Chef as both are producing final output of work.
Here food is Product and Work of Chef is Operation. To evaluate performance of the Chef is monitoring of Product or Operation. Here, monitoring includes how well is the Operational Controls in hands of the Chef .
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Here is the process or technology of Kitchen. This is equivalent of musician, singer, light boy and costume etc. in the theater. Here the process is evaluated on either need basis or planned or periodical basis, for various things such as gas pressure in pipes, leakage, heat, hot water supply, and fire safety equipment. Purpose to evaluate process performance is to ensure a guaranteed operation and identify need of further improvement. As a result, for example. rules of maintenance of machines get changed or, a need understood for introducing a new technology. These would, typically be, results of audit of process.
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Review of a System is responsibility of the Management. This is called Management Review. It aims to satisfy stakeholders and interested parties that the organization is in able hands, its system works well, and results as against the policy and goals are continuously met. This means, the Occupational and Safety goals for which the management system was made could be said as valid.
In the review, the Board of Director if so necessary, expresses concerns where the system was found weak and results were below the expectation. She/she would make adjustment in policy, in estimates or the goals, and ensure that the system, going forward, is geared up. With increased confidence in the ability (as a leader of the organization) to develop a management system, it can overcome weaknesses against challenges and set higher goals and tap new opportunities.
Krishna Gopal Misra [email protected]