How to implement the MBP
Definition
1. MBP is planning, organizing, directing and control that give due emphasis on output and outcome.
2. MBP is a system of management that seeks excellence by planning and measuring efficiency and performance of all key activities and all job holders in the organization.
3.
With
full participation at performance planning and evaluation stage, the management
and staff would be a committed team to ensure its success and sustainability.
4.
MBP
is based on the simple obvious concept that unless you know what result you
want to achieve you would never get there.
The emphasis is on outcome orientated management.
Methodology
5. For that purpose, the following are envisaged:
5. For that purpose, the following are envisaged:
a. Profit model: cost volume profit
analysis
b. Use the ROE chart model and business
planning.
i.
Where
the total input, output and outcome model shown
c. Use the recorded performance
standards in the organization
d. Apply the globally accepted excellent
model.
6. If a manager wanted to get to a set of defined results, it must:
a. Know his current performance level.
b. He must know his strengths and weaknesses
c. He must be able to adopt and develop appropriate
strategies, adopt the best practices and innovation.
d. The strategies should be coordinated
and linked through a strategic map.
e. To focus on the critical performance
gaps and success factors.
7. The set goals of the CEO are cascaded to all in the organization. Delegation done through the budgetary system ensures coordination, consistency and efficiency throughout the organization.
MBP in planning and
budgeting
8.
The MBP concept sets out to achieve its goal
through a process which could be summarized as follows
a. Identify the company SWOT by
conducting performance comparative analysis with a best company within the
industry.
b. Identify the performance gaps and
thereafter rank them based on criticality.
c. Solve leakages and bleeds through
immediate stop gap measures.
i.
Performance
solutions such as wrong strategies
ii.
Lack
of motivation or authority
iii.
Lack
of competency
iv.
Lack
of coordination and consistency
d. Develop and adopt strategies based on
the accepted SWOT and market conditions.
e. Initially design an acceptable
business model where strategies are put in place.
f.
Put
the business into the ROE model for the final acceptable check.
g. Otherwise go back to step 1.
9. All job holder must have his performance scorecard where the following records are being kept:-
a. Official Record of the job holder
i.
Purpose
of the job.
ii.
Position
in the organization
iii.
Size
of job
iv.
Limits
of authority
b. Performance records of the job holder
i.
Key
Result Areas
ii.
Performance
Target
iii.
Key
Performance Indicators
iv.
Performance
problems and opportunities
10. Performance targets are usually
measured in SMART
11. The value chains or processes in the
business are compared against industry to identify critical improvement where
necessary.
12. Means of measuring efficiency and
performance could be as follows:-
a. Both Financial and Non-financial data
b. Output input ratios
c. Dynamic output input ratios
13. Performance records keep the
following:-
a. Performance gaps between targets and
actuals.
b. Highest Performance achievements by
the job holder
14. Improvement Strategies
a. Performance problems and opportunities
i.
When
negative gaps widen and impacted the bottom line performance.
ii.
Exploit
positive performance by breaking through the markets.
b. Justify improvement change
i.
ROE
calculation
ii.
IRR
for cash flows projections
c. Approach
i.
Cost
reduction should be given priority
ii.
Worker
initiatives
iii.
Expected
outcome measured
iv.
Output
input measure
d. Conclusion
The role of HR in MBP
15.
Performance planning meeting
a. Goal setting for the next period.
b. How much gaps to close.
c. Key result areas and key performance
indicators
d. Best Practices and innovation to be
adopted.
e. Strategic mapping
f.
Administrative
changes
i.
Authority
ii.
Resources
16. Performance Appraisal
a. Prior to review meeting
i.
Gaps
are calculated
ii.
True
performance are measured
iii.
Root
cause analysis
iv.
Suggested
Performance solutions
b. Appraisal meeting
i.
Quantitative
and qualitative Performance targets
ii.
Agree
on the performance problems and opportunities
iii.
Agree
on the performance solutions
iv.
Further
action
17. Staff Annual performance appraisal
a. The purpose
i.
Reward
performance based on the value of performance gains.
ii.
Promotion
opportunity for the competent
iii.
Identifying
critical Training needs
b. Conduct of appraisal meetings
i.
Joint
and objective analysis of performance
ii.
Has
the target set been achieved?
iii.
The
root cause of the problem and the solutions
iv.
Discuss
the changes required
v.
Gain
their commitment and ownership
c. Follow up by the manager to all the
relevant departmental heads:--
In conclusion
18.
The benefits of MBP in summary
a. The emphasis of management is now
widened to include efficiency and performance measures.
i.
All
Managers must be able to measure and evaluate key activities under his
responsibility.
ii.
He
must link his activities and that of his team and with that of the
organization.
iii.
The
Manager must measure his own performance and that of his subordinates.
iv.
He
must identify and apply the industry best practices to his organization.
v.
He must adopt the right strategies and put
them in practices.
vi.
Ultimately,
all management activities should lead towards maximizing the return goals.
