Using KPI's to measure Organizational Performance IPA 2023.pdf

Institut Perkhidmatan Awam, Negara Brunei Darussalam
6-8 July 2023
Mohd Shairulnizam Zuall Cobley

Professional Summary
• 29 years of international work experience in Southeast Asia, specializing in
talent management, performance management and organizational
corporate learning in industries such as telecommunications, financial
services, real estate, operations, services, as well as the federal, state
government and non-profit sectors, working with CXO’s group in the
ASEAN region.
• Propelled and lead organizational strategic HR programs with Board Level
interaction.
• Partnering with Head of business, acting as external HRBP in leading
numerous strategic talent development programs, competencies
framework development, career mapping and developing enterprise
architecture that resulting in significant growth of revenue post
implementations.
• Successfully implemented various industries Competencies Framework,
Talent Development Programs, Performance Management and
Succession Planning in more than in 10 organization.
• Conducted more than 100 BSC and KPIs workshop within various setting
from public to private sectors.
• Developed, written and delivered more than 25 competency-based training
modules for clients across ASEAN using Professional Criterion Reference
Instruction (CRI) Model.
• As an adjunct lecturer and a HRDF Malaysia Certified Trainer,
accumulated thousands of hours of experience in a variety of settings,
from open and in-house corporate training delivery, to lecturing
management for the University of Kuala Lumpur.
Academic Qualification
• MBA (Middlesex University)-1996
• BA (Hons) Business Finance (UEL)-
1995
• Diploma In Banking Studies (UiTM)-
1990
Expertise
• Business Development
• Management Consulting
• Strategic Management
• Balanced Scorecard and KPI
• Performance Management & Rewards
• Performance Coaching & Mentoring
• Competency Framework Development
• Leadership Assessment & Development
• Learning Facilitation
Certification
• Certified Business Consultants,
Malaysia
• Certified Trainer – HRDF Malaysia
• Certified Quality Auditors – IRCA (UK)
• Bruce Tuckman Organizational
Developer
• Woodcock & Francis Organizational
Blockages Assessors
• Competency Based Interviews
Professional Courses
• Change Management – ASTD
• Instructional Systems Design - ASTD
• Balanced Scorecard – BSC
Collaborative
• SCS Worldwide Masters Trainer in
Skills Centred Selling Programs
• Belbin Team Roles Facilitators
Career History
1. President- Association of Certified
Business Consultant (Malaysia)
2. Principal Consultant – SCS
Strategic Consulting Services (2014-
Now)
3. Adjunct Lecturer in Strategic
Management - University Kuala
Lumpur (2014- Now)
4. External Learning Facilitator -
Petronas Leadership Centre (2001-
Now)
5. Associate Learning Facilitator –
Civil Service Institute Brunei (2014 –
Now)
6. Executive Advisor to CEO Office-
DST Group Brunei (2011-2013)
7. Malaysia Country Manager- Barker
Hoffmann Consulting (UK)( 2004-
2011)
8. Consultant – Mesiniga Berhad
(2001-2004)
9. Manager – Telekom Malaysia (1997-
2000)

At the end of the workshop, participants will be able to
• Understand the concepts of the Organizational Performance Management System.
• Understand what is Balanced Scorecard, KRAs and KPIs and how it support managerial
and executive positions in support of the organization's strategy, mission, goals and
objectives.
• Differentiate between well formed and badly formed KPIs.
• Learn to develop Performance Objectives/Targets based on the KPIs set for job positions.
• Write operational action plans

• MP 1: Linking Strategy and Management Planning
• MP 2: Write Division, Department, Business Unit
and Individual Management Goal
• MP 3: Recognize and Complete Key Result Areas
• MP 4: Specify Performance Indicators
• MP 5: Write Operational Objectives
• MP 6: Produce Operational Actions Plans

Time Session
8.00 – 10.00 am Session 1
10.00 – 10.30 am Break
10.30 – 12.00 pm Session 2
12.00 – 2.00 pm Break / Lunch
2.00 – 4.00 pm Session 3

Join the team assigned to you
Choose a spoke-person for the team
As a team, list your team:
• Name
• Department
• Team Expectation from this
programme

KPI is about ‘Cockpit Management’

The Corporate Performance
Management
A systematic approach to
improving individual and
team performance in order
to achieve organisational
objectives.”

Measuring The Right Performance

Government
Agency
Strategic
Planning
Framework

Government
Strategic
Planning
Process

Aligning
Vision,
Mission and
Goals with
KRA/ KPI

What you cannot
describe, you cannot
measure
You cannot describe
what you cannot see

Strategic
Goals
Departmental
Goals
Key Results
Area
KPI Operational
Objectives /
Targets
Operational
Action Plans/
Key Tasks
The Deliverables

Our Learning Process
Meaning of strategy,
performance
management &
cascading
Identify strategic
goals and
operational goals
Identify Key Result
Area
Identify Key
Performance
Indicators
Develop Operational
Objectives
Set Operational
Action Plan

Why Measure?
What get measured, we done

The Need for Measurement
• To improve productivity, you must manage.
• To manage effectively, you must control.
• To control consistently, you must measure.
• To measure validly, you must define.
• To define precisely, you must quantify.

Goals and Strategy
1. Strategy / Direction
2. Strategic Goals
3. Results Area
4. Objectives
5. Action Plans

Barriers to
Strategy
Implementation
STRATEGY
People
Operational
Barrier
Vision
Management
Barrier
Personal goals,
knowledge
building, and
competencies are
not linked to
strategy
implementation
Key work
processes are
not designed to
leverage the
drivers of
organizational
strategy
Strategy not
understood by
those who must
implement it..
And not translate
into goals
Management
system are
designed by
operational
control and tied
to budget, not
strategy

The Concept Of Balance
Balance between
financial and non-
financial indicators of
success (in business
organization)
01
Balance between
internal and external
constituents of the
organization.
02
Balance between
lead and lag
indicators of
performance.
03

Balanced
Scorecard “To satisfy our
shareholders and
customers, in which
internal business
processes must we
excel?”
Objectives
Measures
Targets
Initiatives
Internal Business
Processes
“To achieve our
vision, how must our
organisation learn
and innovate?”
Objectives
Measures
Targets
Initiatives
Learning, Growth &
Innovation
VISION
&
STRATEGY
Objectives
Measures
Targets
Initiatives
“To achieve our
financial
objectives, what
customer needs
must we serve?”
Customer
Objectives
Measures
Targets
Initiatives
Objectives
Measures
Targets
Initiatives
“To satisfy our
shareholders,
what financial
objectives must
we accomplish?”
Objectives
Measures
Targets
Initiatives
Financial

PMS AS A BUSINESS TOOL: HOW THE LINK HAPPENS
Strategic Planning Vision - Mission - Values
Strategic Goals/Objectives
Departmental Goals/Objectives
Performance Planning Manager KRAs and KPIs
Individual KRAs/KTs and Standards
Manager/Individual Performance Objectives
Appraisal
(Ongoing/Annual)
Performance Objectives
(Achieved or Not Achieved?)
WHY?
Individual Development
Plan
Rewards
Training & Development
Coaching & Mentoring
Pay Adjustments
Incentives
Bonus

• What is Goals?
• Goals are broad statements of intent
meant to give and indication as to where
an organization, or an individual, is
heading with a focus some time in the
future.
• The Strategic Goals are the major areas
that need to be focused on and be given
resources in order for the organisation
to be successful.
Writing Strategic And
Operational Goals

How do we relate to goals
• Your relationship to the strategic goals of the
organization will depend on your level within the
management hierarchy.
• If you are a senior or line manager reporting to your
Chief Executive , then you may have been
instrumental in setting the strategic goals of your
company and will be able to identify one or more of
those goals as being your principal focus for the
future.
• In most cases, Divisions/units have those goals
already identified for their idea and you should have
access to that information during this workshop.

Corporate Divisions Departments
Traditional Strategy Cascading Framework
The Traditional Framework
Strategy Map Cascading

Corporate Divisions Departments
Traditional Strategy Cascading Framework
• Operationally
Disconnected
• Activity Based
Measurements
• Confused and
Detached
• Silos
Reality

CEO’s CHAL LENG E
Aligning and accelerating an entire organization
objectives
C
A
L
E
N
D
A
R
T
I
M
E
The arrows can be seen as organizations’,
functions’ or leaders’ progress to any
strategic direction
Corporate
Objectives
A strategic decision
or important initiative
is made
INITIATIVES
- in time
1 2
Management Team
3
1 | MIT – 2018, No One Knows Your Strategy – Not Even Your Top Leaders
2 | ADP Research Institute – 2017, Evolution of Work 2.0: The Me vs. We Mindset
of all employees say they want to know
how they can contribute
to help their company reach their
objectives2
82%
NOT EVEN YOUR TOP TEAM CAN LIST
YO U R TO P 3 OBJECTIVES & I N I TI ATI VES
13%
18%
22%
51%
Top team
Mid management
Team leaders
Employees
100%
90%
80%
70%

SCS Focused Strategic Objectives Steering Framework
Strategic Objectives
(1)
(2)
(3)
Corporate Goals Corporate Goals Corporate Goals
Operational Objectives
(1)
(2)
(3)
Departmental Goals Departmental Goals Departmental Goals
(1)
(2)
(3)
Unit Goals Unit Goals Unit Goals
Goals
–
Objectives
-
Activities
Working on the Most Important Objectives (MIO)

Goals- Broad statement of
intentions
Using directional verbs like
Enhance, Improve ect
Example – Improve the quality of
research among academician
Writing Goals

Strategic goals are long term and
represent higher corporate level
direction associated with group level
strategy
Operational goals are departmental
direction to support corporate level
direction and normally are
cascaded from strategic goals
Strategic Goals And Operational Goals

• Enhance IR 4.0 application capability
• Improve global ranking
• Increase international presence
• Improve logistic capabilities
• Enhance branding
• Ensure efficient costing structure
Example of Goals

The concept of strategic
theme
• Within an organisation there are hundreds, if not
thousands, of processes that are taking place.
• The art of good strategy is to identify the critical few
that are going to have the greatest impact on the
Customer Proposition.
• All processes must be done well, but the critical few
must be excelled at.

The concept of strategy cascading
Strategic Direction
• Vision
• Mission
• Values
Strategy Map
• Strategic Goals
• Operational Goals
Direction
Corporate
Intention/ Story
Goals/ Intention/
Focus Area
Goals/ Intention/
Focus Area
Goals/ Intention/
Focus Area
Key Results Area Key Results Area Key Results Area Key Results Area

• Using the Balanced
Scorecard 4 perspectives,
Discuss and Write
• 4 strategic goals
• 4 operational goals

Broad statement
of intention
Goals Key Results Area
Supposed unique
contribution

Definition
“KRAs are those areas in which a high level of
performance is required in order to be successful
during a specified period. They constitute the key
results, outputs or contributions of either a group or
an individual.”
Purpose
• Help a manager direct limited resources (time,
money, people, plant and equipment) to the most
important areas where the return on effort will be
greatest.
• Prevent managers getting locked into "the activity
trap" which involves people "doing things right",
rather than "doing the right thing". Doing the right
thing is concern for achieving results.
• Help focus on areas where managers should invest
their time, energy and talent.
• Help identify areas for which objectives are set.
• Assist in the setting of priorities.
• Help define each person's unique contribution
Key Result Area
KEY RESULTS AR
EA

Key Results Area are results or
output
• Remember KRA is our / departments’
results or outputs
• KRA is not an activity but a set of activities
Example
• Attending a meeting is NOT a KRA (Verb)
• Meeting customer is NOT a KRA (Verb)
• Customer Satisfaction is a KRA (Noun)
• Policy Papers is a KRA (Noun)

Example
NOT THIS THIS
Ensure training is
always based on needs
analysis.
Influencing staff to perform to the required
.
Standards by example.
Gather data to define the Thai market.
Needs Analysis.
Staff Performance
Market Research.
Design all the wooden houses to be in line and
symmetrical
Write detailed technical reports for head office
by the last Friday of the month.
Inspect the vehicle fleet especially the trucks
and the buses against the Ministries
requirements
House Design
Technical Report Production
Vehicle Inspection

Example of Key Results Area
• Financial Management
• Stakeholders Management
• Policy Papers
• Customer Satisfaction
• Investigation Papers

1. Public relations.
2. Conduct a stock check.
3. Increase productivity by 15%.
4. Conduct presentations.
5. Customer service.
6. Training needs analysis.
7. Strategic planning.
8. Production schedules.
9. Design curriculums.
10. Stock levels.
11. Introduce team briefings.
12. Information systems.
13. Decrease scrap by 15%.
14. Attend communication seminar to
improve skills
Individual
Exercise/
Identify KRA
Statements

Strategic Goals –
Top University
Ranking
Key Results –
Teaching and
Academic Research
Example of
Relationship
between KRA
and Goals

The Deliverables
Strategic
Goals
Departmental
Goals
Key Results
Area
KPI Operational
Objectives /
Targets
Operational
Action Plans/
Key Tasks

Institut Perkhidmatan Awam, Negara Brunei Darussalam
6-8 July 2023

Cockpit management
What get measured get done
Need for the right measurement
Linking Corporate strategy / Direction with KPI and
Target
Strategic Goals and
Operational Goals
Based on 4 Perspectives
Key Results Area
Review of Day 1

NOW YOUR
TURN …
• Write a goals that you want to
achieve this year
• Then write Results Area that
relate to the achievement of the
goal

Group Exercise
Example - Goals Cascading
Goals Key Results Area KPI Operational
Objectives
To achieve financial
efficacy
Financial Management
Effectiveness
To improve financial
forecasting and budgeting
Cost Control

Group Exercise
Objectives

Goals Matrix (Example) & Review
Corporate/ Department HR Division/ Unit Finance Division/ Unit Operations Division/ Unit
SG 1
• Creating a High
Performance Culture
X
• Enhance Capabilities
Building
• Develop corporate
culture
SG 2
• Ensure Effective and
Efficient Financial
Management
X
• Ensure cost
optimisation
• Enhance tax
management
SG 3
• Develop Excellent
Service Delivery
X
• Improve logistic
management

KRA Matrix
Director – HR
Development
HR Officer 1 HR Officer 2 HR Officer 3
KRA 1
• Capabilities
Development
X
• Training Needs Analysis
• Training Programme
Management
X
• Succession Planning
• Leadership
Development
Programme
KRA 2
• Performance
Management
X
• BSC Reporting
X
• Rewards and
Compensation
• Promotions
KRA 3
• Competency
Framework
X
• Competency
assessments

Complete a Goals
Cascading Matrix
for your
department
Complete a KRA
Cascading Matrix

“KPIs are those quantifiable factors within a
KRA, for which it is worthwhile to derive
objectives. They identify only WHAT will be
measured not HOW MUCH or BY WHEN.”
“A unit of measurement for which measurable
standards can be established, to measure the
performance of individuals, teams, or the whole
organisation
What is KPI

Why do we
need KPI?
• They provide the link between Goals, Key Result Areas and
measurable objectives.
• They extend us to think about creative and relevant ways to
objectively measure the results (outputs) of our efforts.
• They establish a measurable value on our unique contribution to our
organisation's goals.
• They force us to think about how to measure our staffs' contributions
to business unit goals and objectives.
• They avoid the trap of measuring activities rather than Key Results.
• They contribute to removing subjectivity from performance appraisal.

Types Of KPI
Activities / Processes Output Impact

Types of
indicators
• Quantitative
• Qualitative
• Combined

Example of
KRA and
KPI
Key Result Area Performance Indicator
Cost Control
Personal Development
Training Needs Analysis
Legal Submissions
Staff Performance
Course Development
Team Morale
Strategy Formulation
Customer Satisfaction
Vehicle Fleet Maintenance
Technical Report Production
Corporate Health
Course Design
Ministerial Advice
Overtime as % of Payroll
Number of skills learnt
Recommendations accepted
Processing Time
% Objectives achieved
Number of revisions
% increase on morale survey
Number of strategies implemented
% decrease in complaints
Breakdowns per kilometer
% recommendations accepted
% reduction in sickness days
Number of students competent per day
Level of satisfaction

List 2 KPI for each category of KPI
• Activities
• Output
• Impact
NOW YOUR TURN …

Review of Day 1 and 2
Cockpit management
What get measured get done
Need for the right measurement
Linking Corporate strategy / Direction with KPI and Target
Strategic Goals and Operational
Goals
Based on 4 Perspectives
Key Results Area
Writing KPI

Our Progress as at now
Strategic Goals
(Corporate Direction –
> 18 months)
Operational Goals
(Operational Direction
< 18 months)
Key Results Area
(Output/ Contribution /
Purpose of Existence)
KPI
(Measurement
Instrument- How do we
know we are performing)
Knowing how we contribute towards achievement
Direction cascaded from strategy

Strategic
Planning
Process
1. VISION
2. MISSION
3. VALUES
4. STAKEHOLDERS
5. PHILOSOPHY STATEMENTS
6. ENVIRONMENTAL ANALYSIS
7. IDENTIFY STRATEGIC GOALS
8. WRITE KEY RESULTS AREAS
9. OBJECTIVES/ TARGETS
10. ACTION PLANS

Strategic Thrust 1 Strategic Thrust 2 Strategic Thrust 3
Strategic
KRA
Strategic
KRA
Strategic
KRA
Strategic
KRA
Strategic
KRA
Strategic
KRA
KPI KPI KPI KPI KPI KPI
Objective 1 Objective 2 Objective 3 Objective 4 Objective 5 Objective 6
Key
Initiatives
Key
Initiatives
Key
Initiatives
Key
Initiatives
Key
Initiatives
Key
Initiatives
Philosophy Statements
Values
Vision
Missions
Strategic Goals Strategic Goals Strategic Goals

Linking it all together
Strategic Goals/
Map
Strategic KRA
Key
Performance
Indicators
Strategic
Objectives/
Target
Key Initiatives
VMV

Review of Definitions
A strategy map is a simple graphic that shows a logical, cause-
and-effect connection between strategic objectives (shown as
ovals on the map). It is one of the most powerful elements in the
a strategy development framework, as it is used to quickly
communicate how value is created by the organization.
A Key Performance Indicator is a measurable value that
demonstrates how effectively a company is achieving key
business objectives
Goals are broad statement of intention
Objectives are specific action oriented targets that can
be defined, visualised and committed to writing
Strategic initiatives is a project or action that is carefully defined
and designed to achieve strategic objectives

Example of Definition
Goals Enhance Market Dominance and Presence
To enhance SMEs as a major economic
contributors
To embark in excellent academic experience
and ensure graduates excel and accepted
by the industry
Objectives Achieve 30% national market share
Provide 30% national employments
opportunities
80% of graduates employed within 6
months of completion
Key Results Area Product Marketing Employment Creations Industry Partnership
Key Performance
Indicators
# Market share # National Employment # Graduate Employability
Initiatives
• Build strategic partnerships with
dealers and distributors
• Introduce new products quickly
compare to competitors
• Enlarge market coverage nation wide
• Provide more funding assistance to
SMEs
• Assist in creating export oriented
products
• Linked SMEs with regional MNC for
strategic partnerships
• Established conducive learning
environment
• Smart Partnership with industries
• Engage industries leaders as panel of
advisors
1 2 3

Pareto’s Rule – The Critical Few
Things to done
20%
Results achieved
80%
20%
80%
MIO framework are based on that 20% of a job that produce the greatest payoff. The rest is the 80%,
sometimes called “busy work”, which gives little in the way of results.

Example of MIO and AKPI Cascading
Corporate MIO
Product Marketing
MIO
Sales
MIO
Logistics
MIO
Achieve 30% national
market share
• 2 new metal deck
products introduced in
2021
• 70% sales conversion
rates
• national sales team
footprint - 70% of
country
95% customer
satisfaction ratings
• less than 3% product
returns due to product
defect
• 99% customer delivery
on time
• zero lead time at
distribution centres
Industry and Household Metal Deck Company

Team Discussion of MIO and AKPI Cascading
Department MIO
(Take 2 MIO)
Supporting Unit 1 Supporting Unit 2 Supporting Unit 3
UTHM

Quarter 1
Objectives
AKPI
Quarter 2
Objectives
AKPI
Quarter 3
Objectives
AKPI
Corporate Most Importance
Objectives
Operating departments select the most important objectives and AKPI that support the strategic
objectives and work on it for a period of time
Quarter 4
Objectives
AKPI
Time
Supporting
What are the 20% that will produce the 80%?

Most Important
Objectives (MIO) 2021
Time
Q1 Q2 Q3 Q4
Q1- AKPI
M1
M2
M3
AKPIs and Activities
Example – Sales Departmental Most Important
Objectives (MIO) and associated AKPI
Q2- AKPI Q3- AKPI Q4- AKPI
Supporting
Supporting
Supporting
Supporting
70% Sales
Conversion rates
70% national
footprint
• RM X M sales funnel
• # strategic
partnership signed
• 50% improvement
of average
conversion time
• 80% quote to
close ratio
• 10% reduction of
cost of sales
• #14 states
representation
office
• Yearly #RM sales
target achieved
• 100% target on
sales call achieved
M1
M2
M3
M1
M2
M3
M1
M2
M3
AKPIs and Activities AKPIs and Activities AKPIs and Activities
Dealers in every
districts
Sales research
completed and approved
100% sales call
completed

5
SCS KPI Accelerations Framework™
Acceleration KPIs and MostImportant Objectives
AKPI
ACCELERATION KPI
An indicator that measures activities conducted on a weekly
basis to ensure achievement of the MIO. Should reflect
continuous & proactive behaviors & may be something you:
MIO
MOST IMPORTANT
OBJECTIVES
Always talk about
but never do
Already do but need
to do more of
Stopped doing but
need to start again
An indicator that measures the outcome of the one or
two top prioritized strategic objectives for each
function and team.
Measurable per
month or less
Influenceable by
the team
Correlate to the
overarching MIG
Win the KL Marathon
Increase #Signed Deals
Increase Market Share
Work out X times each week
Book X meeting with decision maker
according to prioritized stakeholder list
Ensure sales closing % at x %

Most Important
Objectives (MIO) 2021
Time
Q1 Q2 Q3 Q4
Q1- AKPI
M1
M2
M3
AKPIs and Activities
Team Discussion –Most Important Objectives (MIO)
and associated AKPI
Q2- AKPI Q3- AKPI Q4- AKPI
Supporting
Supporting
Supporting
Supporting
M1
M2
M3
M1
M2
M3
M1
M2
M3
AKPIs and Activities AKPIs and Activities AKPIs and Activities

Group Exercise
Goals Cascading, KRA, KPI
Objectives

Writing Operational
Objectives
1. A specific description of an end result to be achieved.
2. Specify in a clear measurable detail the end product we want to
produce.
3. Should constitute about 70% of your effort over the next reporting
period (6-18 months).
4. May be written for:
• Common + technical areas
• Personal Development related to Individual Goals
5. Problems you want solved
6. Without objectives, people tend to be evaluated on the basis of
their personality instead of the results they produce.

Operational Objectives Vs Performance
Objectives
Operational
Objectives –
Output / Impact
(Lagg Indicators)
Performance
Objectives –
Process (Lead
Indicatos)

Guide to writing operational objectives
Action verb + Quality/Quantity Performance Measure
WHAT BY HOW MUCH
Completion Date
BY WHEN

Example of Operational Objectives
• All KUPU SB undergraduate student will be able to graduate on time (with no extension)
by Semester January 2023.
• What
• How well
• When
How well
What
When

Example of Operational Objectives
• Goal – World ranking !
• KRA – Teaching Research
• KPI – Publication
• To publish 4 academic journals
in accredited journals by 31/
12/ 2021

Strategic Goals
(Corporate
Direction – > 18
months)
Operational
Goals
(Operational
Direction < 18
months)
Key Results Area
(Output/ Contribution /
Purpose of Existence)
KPI
(Measurement
Instrument- How do
we know we are
performing)
Operational
Objectives
HOD 1
HOD 2
HOD 2
O 1
O 2
Direction cascaded from
strategy Knowing how we contribute towards achievement

Write 3 operational objectives for you
and 1 each for people reporting to you

Operational Action Plans
An Objective Without a Plan is A Dream
- Dr Bill Reddin
“

Strategic
Goals
Departmental
Goals
Key Results
Area
KPI Operational
Objectives /
Targets
Operational
Action Plans/
Key Tasks
Team Exercise
Goals Cascading, KRA, KPI and targets

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