Chapter 10 - Study Guide

1.​ Describe and define Performance Management and why it is an important

management concept
a.​ Performance Management: Delivers superior results through ongoing
improvement of the organization.
i.​ Becoming skilled in Performance Management helps leaders:
1.​ Manage their organizations more effectively and efficiently
2.​ Improve faster than competitors
3.​ Create a distinctive competency that leads to competitive
advantage and superior results
b.​ Performance Management Principles
i.​ Role of Leadership: Set clear direction and build capabilities to achieve the
vision.
ii.​ Customer Focus: Meet customer needs better than competitors.
iii.​ High-Performance Environment: Align teams and functions to work
together and deliver results.
iv.​ Fact-Based: Use data to track progress and identify areas for improvement.
v.​ Relentless Improvement: Continuously improve with expert tools and
proven methods
vi.​ Innovation and Renewal: Always seek new ideas to improve and adapt the
organization.
c.​ Approach to Embedding Performance Management into the Culture
i.​ Leadership Role: Reinforce commitment to excellence and continuous
improvement.
ii.​ Use of Experts & Training: Success is more likely when led by
experienced project managers and trained professionals.
iii.​ Use of Proven Methodologies & Tools: Tools like Six Sigma or Lean that
don’t require reinvention and are proven to deliver results.
d.​ Performance Management Key Elements
i.​ Business Process Management (BPM): Understand and manage activities
better.
ii.​ Business Measurement, Assessment, and Evaluation: Evaluate
organizational performance through assessments
iii.​ Business Improvement Methods & Tools: Use structured methods to
enhance performance.
2.​ Describe Business Process Management (BPM) and its role in Performance
Management
a.​ BPM: It helps understand how work gets done, identify waste, and improve
quality (critical to getting work “Done well.”)
i.​ A “process” = A series of steps converting inputs → outputs.
ii.​ An “effective process” = Achieves desired customer behaviors.
iii.​ An “efficient process” = generates a return on the capital used.
iv.​ Internal processes (like HR hiring) must also be efficient, even if they
don’t serve external customers
b.​ Process Maps: Show the steps from inputs to outputs visually
i.​ Types include:
1.​ SIPOC (Supplier, Inputs, Process, Outputs, Customers)
2.​ Swimlane Diagrams
3.​ Lean Value Maps
c.​ Key Concepts
i.​ A business process should:
1.​ Deliver value to external and internal customers.
2.​ Be both effective (right output) and efficient (correct cost).
ii.​ Effective processes = Meet customer requirements
iii.​ Efficient processes = Operate at a cost that supports profitability
3.​ Describe Business Measurement, Assessment, and Evaluation, and their role in
Performance Management
a.​ The purpose is to help organizations: Measures specific processes , overall
performance and identifying areas for improvement
b.​ Business Assessment (Baldrige Framework)
i.​ Leadership: Guides the organization’s values, vision, and performance.
ii.​ Strategy: Develops and implements goals to achieve long-term success.
iii.​ Customers: Understands and meets customer needs to build loyalty.
iv.​ Measurement, Analysis, & Knowledge Management: Uses data to drive
decisions, track progress, and share knowledge.
v.​ Workforce: Engages and supports employees to perform at their best.
vi.​ Operations: Manages key processes to ensure efficiency and quality.
vii.​ Results: Tracks performance outcomes to evaluate success and
improvement
viii.​ Business Evaluation: Process of collecting and analyzing
internal/external data
1.​ Assesses performance and prioritizes improvement opportunities
4.​ Business Improvement Methods & Tools
a.​ Business Improvement Methods & Tools
i.​ Role of Leadership: Leaders guide, resource, and recognize improvement
projects.
ii.​ Use of Experts and Training: Skilled experts lead projects that managers
can’t due to time or specialization limits.
iii.​ Use of Proven Methods and Tools: Experts apply tested tools to save time,
boost efficiency, and improve success rates.
iv.​ Selection is based on assessment data and evaluation results.
v.​ These tools reduce cost, improve quality, and shorten project cycles.
vi.​ Lean focuses on eliminating waste, while Six Sigma focuses on reducing
defects and achieving consistency.
1.​ Together, they support getting work “Done Well.”
b.​ Methods & Tools
i.​ DMAIC/Six Sigma
1.​ DMAIC = Define, Measure, Analyze, Improve, Control.
2.​ Six Sigma: Statistical term—Focuses on reducing defects and
achieving process consistency.
a.​ Only 3.4 defects per million outputs fall outside the
acceptable range.
b.​ Must produce outputs within acceptable quality ranges to
meet customer requirements.
c.​ If not, it's considered a defect.
d.​ Goal: reduce variation, improve control, minimize errors.
ii.​ Lean Methodology: Eliminate waste (activities that don't create value for
customers or converters).
1.​ 7 Types of Waste in Lean:
a.​ Overproduction Correction – Reworking defective
products.
b.​ Inventory – Storing more than necessary.
c.​ Motion – Unnecessary movement of people/materials
d.​ Conveyance – Unneeded transportation.
e.​ Overprocessing – Doing unnecessary steps.
f.​ Waiting – Idle time due to a lack of parts or people.