Performance Management: Strategies to unlock peak performance in facility management.

Facility managers are under tremendous pressure to drive performance and remain accountable for the results. Organizations that thrive in today’s volatile environment have adopted new management practices, like Value Based Management (VBM), Vested Outsourcing, Lean Thinking, and others, to drive performance. These FM practices involve designing and implementing processes to achieve predetermined outcomes.

Performance management is no longer just about monitoring performance but also combining the best practices from 360-degree feedback, goal-setting theory, and balanced scorecard approaches to help an FM organization meet its goals and objectives by accessing performance data, understanding the performance goals, and taking actionable steps to improve its performance.

Re-invigorate Your Performance Management with Service Level Agreement

A Service Level Agreement is primarily the customer’s way of communicating the desired levels of outcomes. For example, how often is the cleaning done if you want a cafeteria table clean? Will the same service level apply to an Office workstation or cabin table? The scope of work comes first, followed by the SLA definitions, which can then be measured or monitored through KPIs and proof of which are completed and signed off Checklists. Based on the SLAs, the partner can define deployment & pricing for their services.?

Align SLAs to deliver operational excellence to the customers and inculcate a work culture of continuous improvement with the following objectives:

• Enhance operational effectiveness and efficiency.
• Consistently monitor and control the quality of performance.
• Maximize Return on Investment (ROI).
• Sustain optimal Total Cost of Ownership (TCO).
• Reduce operational costs.
• Maximize asset value and extend the asset life cycle.
• Proactively improve processes.

Proactive, not reactive KPIs

Performance management traditionally focuses on the reactive measurement of KPIs. Facilities managers were earlier primarily concerned with data related to their buildings and the HVAC systems. However, the landscape is shifting. As real estate businesses look to become more agile and adopt a digital transformation strategy, KPIs are no longer in isolation. They integrate with other metrics, such as customer and community management and experience, CO2 emissions, and energy usage data. FM companies are increasingly focusing on proactive KPIs that help them identify potential issues before they impact customers and operations, allowing them to identify problems and solve them before they escalate.

Navigating Asset Performance with Key Performance Indicators

While SLA describes the levels or standards of services expected as deliverables from the vendor, Key Performance Indicators or KPIs are the tools that quantify the service levels to regularly check on the performance of the vendor partners and determine success factors and areas of improvement.

Holistically, all services must be a part of the KPIs such as Operations, financial performance, HR, Customer Satisfaction, EHS, Compliance, and Security operations. E.g., Monitor AMC vendors concerning the following aspects:?

• Uptime of equipment.
• The efficiency of the equipment.
• Response time for incidents/defects.
• Resolution Time for incidents/defects.
• Timely availability of spares.
• Jobs attended by qualified technicians.
• Conduct tasks safely and securely.

Strategies for Extension of Performance.

Undertaking a KPI review with the service partner requires comprehensive monitoring and record-keeping. All Operations Managers must understand assigning SLAs and KPIs for each contract and ensure that measurement is done against all the metrics or parameters indicated. Record and report all the service failures and performance.

While we use a service level agreement to manage our partners, we measure our performance by self-assigning targets aligning to the industry benchmarks or best practices based. Mediate the performance on a progressive basis, i.e., the previous months or years and market benchmarks for similar properties or scope of services. Parameters include:?

• Gross FM Costs (TCO) / 1 Sft of Gross Floor Area (GFA), annually
• Operational Costs / 1 Sft of GFA
• Maintenance Costs / 1 Sft of GFA
• Maintenance Cost / Replacement Cost for an asset
• Planned maintenance vs. Reactive maintenance Ratio
• Utility Consumption Costs / 1 Sft of GFA
• Cleaning Costs / 1 Sft. of GFA
• Security Costs / 1 Sft. Of GFA
• End User Complaints
• Degree of Satisfaction of Users (Happiness Quotient, Net Promoter Score)

Training for understanding how to measure success

Continuous training and personal development are the backbones of any operation. By understanding how these groups operate, FM organizations can set appropriate goals and objectives to ensure that the facility runs efficiently. As the managers of a facility, it is essential to understand how to measure success when training vendors and performance managers by:??

• Identifying objectives and areas of improvement are needed.
• Develop a comprehensive training plan and execute training on critical aspects of various functions/infrastructure/property.
• Create a training calendar at the beginning of the year explicitly indicating the topic of training, the duration, time, and date of training, and the required attendees for the training, along with who will deliver the training.
• Undertake a continuous performance evaluation, assessing the progress and identifying specific training needs such as one-time skill assessments.
• Maintain a record of training sessions indicating the topic, date and time of training, and names of personnel attending the training.

Furthermore, this knowledge will allow more accurate comparisons between vendors and performance managers. As a result, organizations can improve their chances of selecting the right team for future projects.?

Integrating the physical and digital worlds

The physical and digital worlds are converging at an ever-increasing pace. Advances in artificial intelligence, machine learning, virtual reality, augmented reality, and robotics are helping to bridge this gap. Real estate companies are increasingly looking to integrate data from different systems as part of their overall performance management strategy. The focus is on business outcomes rather than just KPIs and metrics. For example, combine data from facility management software, such as building energy management systems, HVAC control systems, indoor air quality monitoring systems, asset tracking systems, and customer relationship management (CRM) systems, with data from other business systems, such as customer relationship management systems, human capital management systems, supply chain management systems, and financial systems.

In conclusion: Change is the only constant

Performance management in facility management has evolved from primarily monitoring SLAs and KPIs annually to incorporating dynamic data sets collected from real-time monitoring. The SLAs & KPIs themselves should be open to revision in any case. Based on changing needs of the building and its occupants, these should reflect the new priorities as decided by the management. The demand for high-quality services and experiences requires organizations to be more accountable, collaborative, and data-driven. Performance management is one of the most effective ways to drive accountability, increase performance and collaboration among team members and vendor partners, building and asset management KPIs. It is an approach that is more flexible than the traditional annual review process performed as a continuous process, not a once-a-year event.

To learn more about Denali Assets Integrated Facility Management services and solutions, write to us at [email protected] or visit us at www.denaliassets.co.in?