Performance Measurement in Organizations - Baldrige Criteria - Essay Example

? Performance Measurement in Organizations Number Baldrige Criteria Baldrige is a national quality program based on Total Quality Management (TQM). Through the measurement tool, quality management policies can be implemented broadly within the organization. Baldrige alters the principles and behavior of an organization because it helps in the formulation of strategic policies aimed at enhancing performance, securing and retaining high reputation or a strong brand, and guarding against violation of the ethical principles (Poister, 2003). The criteria can enable an organization to effectively align assets with quality strategies such as ISO 9001 and Six Sigma, and improve performance throughout the organization in a general way. Baldrige also helps to recognize and monitor vital organizational outcomes such as customer responses, product and service delivery, financial assets, human resource, and the general effectiveness of an organization in the market. Every organization will need an-encompassing strategy, especially if the executives are looking for a measure that can be used to connect the product brand with the organizational culture and internal practices (Poister, 2003). Key internal functions, which should be linked with the commodities, include strategic planning and the satisfaction of various stakeholders, e.g. customers, and employees as well as suppliers. In a nutshell, Baldrige measures and advances leadership, strategic planning, information analysis, consumer and market focus, evaluation of human resources, process management, and business results (Ferguson, 2008). Six Sigma According to Poister (2003), Six Sigma entails statistically-centered processes, which improves organizational performance for continuing process development. By implementing Six Sigma, an organization can reduce defects substantially. This is usually done by spotting and removing the triggers of variation in organizational processes. In identifying defects, the criteria focus on creating precise descriptions of customer needs and expectations and are therefore consumer-oriented. The main pillars of Six Sigma include continuous analysis of the consumer’s needs; vigorous employment of facts in the identification and measurement of variation in all business processes such as production; and recognition of the actual origin of defects or variation for their elimination. Ferguson (2008) avers that through Six Sigma, an organization would seek to put in place a pro-active executive team focusing on the prevention of problem; enhance the setting up of unrelenting improvement measures and constant aiming for perfection through effective collaboration between different units within the organization (Poister, 2003). Six Sigma is premised upon multiple and successful approaches to quality improvement measures and encompasses unique strategies of its own. When compared to other quality control and improvement criteria such as Baldrige, Six Sigma is seen as a better methodology for recognizing the causes of particular quality defects and eliminating those problems. Notably, Six Sigma can be employed as an adjunct measure to other options in order to improve quality improvement systems. ISO 9001 Poister (2003) indicates that ISO 9001 is a methodology for managing quality standards within an organization. A Quality Management System, which ISO 9001 is known to measure, is a system of elaborately defined business structures, functions, duties, and assets used to support and develop on given quality thresholds. The criteria can be employed in the measurement of the general quality of an organization’s management programs and practices. An ISO 9001 certification ought to assure customers of an organization that the quality thresholds have been met by implementing standard policies with the aim of producing competitive products and services. Through ISO 9001, documenting the details of an organization’s processes can be achieved. This documentation is very important when it comes to the implementation of training mechanisms. As constant growth is achieved, the new or modified strategy is standardized by reforming the organization’s procedures and regulations. Balanced Scorecard The United States Postal Service (USPS) is a huge organization, whose management could be impractical without a balanced scorecard. In its operations, USPS must consider the interest of the 700,000 plus workforce; ensure that more than 212 billion pieces of mail reach more than 144 million collection centers that are primarily within the country but also in other Latin American countries as well. These operations are the source of the organization’s huge profit. The over $70 billion in annual revenues generated by the corporation can only be safeguarded by effective quality control measures implemented in various operational segments (Ferguson, 2008). USPS’s Balanced Scorecard is, therefore, premised upon five main canons. To achieve more revenue, the corporation implements the total revenue metric; to improve the services, the organization examines the percentage of successful mail deliveries; to manage costs, USPS examines the efficiency of the total factor; to succeed its performance-driven goals, the organization examines studies on employee attitudes; and to put in place structural modifications, the organization strives to increase flexibility of its operations (Ferguson, 2008). According to Ferguson (2008), the use of a balanced scorecard has enabled USPS to realize successes based on the delivery of quality services, improve employee satisfaction and an increase its revenue. The strategy has kept the organization going regardless of changes of guard at the helm of leadership, with each and every member of the executive team striving to support the operations. As for other vital success factors, the organization emphasizes on the significance of building an organizational culture based on balanced performance. Moreover, through balanced scorecard, USPS has been able to ‘hear’ the voices of the three main stakeholders of the corporation: the customers, the employees and the suppliers. The strategy has enabled the organization to not only appreciate the contribution of the key stakeholders but carry out cross-functional cooperation and alignment of its services. Despite the benefits, implementing a balanced approach has resulted in immense challenges to the organization, especially in the selection of the best measure. Owing to the size of the organization, the issue of several of measures believed to be vital often arises. And their degree of importance also varies with respect to functional goals. So, narrowing these down to fewer and practical tools has been quite problematic to the organization (Ferguson, 2008). Additionally, the management-based process is expensive and time consuming because it should be explored from an external approach, rather than from inside of the organization. USPS, however, solves these puzzle by focusing on what factors would clearly improve customer satisfaction and enhance competitiveness in the market. Conclusion Generally, there is a consensus that Baldrige, ISO 9001 and Six Sigma are different performance measurement and quality management criteria, but can be used simultaneously in an organization. Each may be used in the management structure of a thriving organization to advance corporate goals. Additionally, all certainly are important to the organizations who intend to improve performance and revenue. To achieve the overall prospective growth of an organization, a well articulated systems approach must be in place. The priorities of an organization often dictate where to begin the process of ensuring quality control. Although all three are effective tools for measuring the performance of systems, the Baldrige Criteria, Six Sigma, and ISO 9001:2000 each provide a different evaluation in helping managers to enhance performance and customer satisfaction. Balanced scorecard also enables an organization to pinpoint the most important organizational factors and strike a balance between them for greater efficiency. References Ferguson, D.L. (2008). The United States Postal Service: A Case Study of Large Scale Government Transformation. Michigan: ProQuest. Poister, T.H. (2003). Measuring Performance in Public and Nonprofit Organizations. New York: John Wiley & Sons. Read More