Friday, April 10, 2009

KPI - move forward for good governance

Prime Minister Datuk Seri Najib Tun Razak announced his 28-member cabinet and 25 ministries, which included a portfolio for performance management.

The key performance index (KPI) system is a good move in institutive to evaluate ministers and deputy ministers’ performance augured well for the people.

Ironically, "Be The Most Popular government" won't work as a KPI because there is no way to measure the government's popularity or compare it to others.

Key Performance Indicators are quantifiable measurements agreed to beforehand, that reflect the critical success factors of an organization.

When measuring performance through Key Performance Indicators (KPI), a higher order of classification such as activity, efficiency and effectiveness are needed to help decide exactly what is being measured.

KPI can be measured in term of numbers, index, percentages, ratings, ratios and rankings.

There are some golden rules for a good KPI:

*Verifiable – Independently verifiable by a third party or experts

*Linked to a recognition/reward system – Celebrate good performance with monetary or non-monetary rewards or recognition

*Measurable – Use on-going, formal and informal, performance feedback and open two-way communication

*Achievable – Measures must be realistically achievable or humanly Attainable

*Relevance – Logical and clear relationship to an objective

*Agreed to – Open two-way communication to secure buy-in, commitment and full understanding

*Aligned – align and integrate individual KPI to goals and objectives, vertically and horizontally

*Controllable – Employees must have a significant degree of control, authority and influence over the achievement of the measures or performance

*Specific – Specific to the individual, who is responsible and held accountable for the job’s performance. Organizational chart can be used as a guide or starting point

*Timely – KPI are time-framed

* Workload realities – allocate KPI with other job assignments, bounded by limited working hours

All KPI must pass the following three criteria test:

i. Strategic Criteria
− enable strategic planning and drive the deployment of actions required to
achieve objectives and strategies
− align behavior and initiatives with corporate strategy and focus on its priorities

ii. Quantitative Criteria
− provide a clear understanding of progress toward objectives and strategies
− identify performance gaps between current status and performance aspirations

iii. Qualitative Criteria
− perceived as valuable by the organization and people involved

KPI is good system to be used by the government to continuously move forward to establish the structures and processes for good governance, notwithstanding the constraints and challenges.

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