Assessing Performance, Risk, and Quality with Metrics
Assessing Performance, Risk, and Quality with Metrics
Performance management is an organizational management tool helping managers evaluate and monitor the work of their employees. Performance management aims to develop an environment where employees perform best and give high-quality work most effectively and efficiently. High-quality work is achieved by minimizing risks that may reduce employee performance. Performance management plans employ traditional instruments like creating and evaluating objectives, goals, and achievements. Also, they intend to describe what effective performance looks like and create processes to assess achievements. Therefore, it is important to reduce risks in the workplace to ensure the high performance of employees and the production of high-quality work.
Employees are the greatest value creators in a company. Therefore, a performance and risk management plan is vital for the success of the company. Workers in the organization must understand what is required of them and achieve those objectives. They need to be managed to enhance their motivation, acquire the essential skills, support, and resources, and enhance their accountability (Salavati et al., 2016). Performance and risk management plans intend to maintain, monitor and enhance the employee’s performance regarding the organization’s goals. It is a group practice that should be holistically addressed, thus, not a single activity.
A risk management plan in a project is a systematic process of detecting, examining, and responding to risks and uncertainties in a project. It also involves maximizing the consequences and probability of positive outcomes and minimizing negative outcomes to the project’s objectives. A risk and performance management plan describes how the project team will address risks to ensure high performance and achieve their objectives.
Ways of Managing Risks in our Project
In our project, there are various practices designed to mitigate and tackle risks. As a result, performance will be guaranteed, and the staff will effectively and efficiently meet the project goals. First, the project manager will develop a risk register in a spreadsheet to determine how the supervisor will address possible risks. The register will encompass the risk being registered, its description, and possibility for its occurrence, owner, impact, action, risk response, and status. A way of accurately tracing information is an essential step in the successful framework of project risk management. The project risk register is essential to identify possible environmental issues and behavioural trends of the expected risks (Salavati et al., 2016). It will also help in spotting and capturing risks associated with project changes and even legislation. Further, it demonstrates to other stakeholders that risks are effectively managed in the project. Therefore, the project risk register is an essential tool to reduce project risks and ensure high performance.
Besides, the supervisor will identify project risks to determine how they can be addressed and tacked to reduce their impact on performance. The project manager will identify risks by brainstorming all current risks with the key stakeholders and team members. The project manager will go through all the possible factors important in achieving project goals and ask the team about any possible problem and their concern. Risks relevant to the project management such as materials, technology, legislation, supply, budget, quality, people, and any other will then be identified and given great emphasis.
Furthermore, the opportunities that may come with the risk will also be considered. When risks are identified, factors in positive opportunities and risks should be considered (Mohammed & Knapkova, 2016). For instance, all the factors that may positively impact the project will be considered. Also, the assessment will help identify the impact; for example, if too many employees are assigned to a project, they may shorten completion time. Also, what will be done to exploit the coming opportunity must be planned. Just as risks are expected and planned, the manager must also prepare the unlikely success.
Additionally, the assessment will aid in determining the impact and likelihood of the risk. The project team would determine the probability of the occurrence of the project risk and establish its effects concerning cost, time, quality, and benefits if the risks were to occur (Mohammed & Knapkova, 2016). Besides, the supervisor will determine the possibilities and impacts on a scale of five. For instance, a likelihood of five may signify that the team is almost certain of the occurrence risk. An impact of 5 might portray that the risk would result in a serious delay and cause major modification if it were to occur. Thus, chances of the risk occurrence need to be established to determine the magnitude of the effects they may cause.
Furthermore, the project team will determine responses after identifying the likelihood and chances. Great emphasis is given to risks with the highest potential impact and a higher possibility of happening in the process. The project team will identify what can be done to lower the impact and likelihood of every project risk and get to the main cause by asking why the risk is occurring. When the risk likelihood and impacts are lowered to a minimum possible level, the project performance is enhanced to a greater extent. Further, the cost of addressing each risk is estimated by the team after determining the responses. For instance, using the high number of employees assigned on a project, how much will it cost to insure their health before completing the project? How will it cost to introduce backup in case one of the employees falls sick. The manager then will provide an estimation range, and the overall cost of the risk responses will be added to the project overall estimate contingency.
Besides, the project manager will assign owners will assign an owner to each project risk. The risk owner should be an individual who is most suited to handle and monitor a particular risk. The risk owners are assigned with the involvement of the stakeholders and team members to get the best possible individual suited for the job. Another important part of the risk and performance management plan is a regular review of the project risk and how they are addressed. The project manager will set aside time to identify upcoming risks and monitor the progress of all registered items. Risk management is a practice that happens all through the period of the project (Salavati et al., 2016). Therefore, it must be attended to in the entire life cycle of the project. Finally, a comprehensive status report on the risks must be made. The report will be designed in such a manner that all the risks with a higher likelihood and greater impact are given much emphasis. The committee will discuss the top ten risks in a meeting to give the executives and the stakeholders an opportunity to give directions and their input. When the project risks are properly managed, the chances of obtaining high performance and quality are greatly increased.
The Key Performance Indicators (KPI’s) that will Be Measured in the Report
The Key performance indicator describes certain factors a project or organization needs to monitor and benchmark. Assessment skills offer an evaluation and measuring mechanism that assess the impact and progress of the described factors (Parmenter, 2015). Key performance indicators specify what should be measured, and the evaluation techniques show when and how it will be evaluated. It is s gauge used to evaluate and describe the success of an organization and a project. Normally, it is always expressed depending on the progress a project is making towards its long-term objectives. Key performance indicators integrate information on the sources, definitions, and calculations for every measure and set a submission timetable for the project data.
Besides, key performance indicators help the project or company measure and define progress towards their objectives and goals. Once the project team has analyzed the project mission and clearly defined its goals, it needs to evaluate progress towards the set goals. KPI’s gives a measurement instrument to achieve that goal (Parmenter, 2015). It helps the project team to understand whether they are on the right track. That is, whether it is working towards its goals and achieving beneficial results and improvements. In projects, they mainly help in measuring service delivery.
The table below shows 10 KPI’s that may help determine the project progress and status.
Metric, Parameter or KPI Sample Reporting and Processing Speed Metric Description and Purpose The device, Data Repository, Application Data to be Measured Reporting Format
Financial metrics Comprise of costs, profits and many others Financial metrics show the financial data aspects that cannot be easily seen from a simple data review. This shows the progress of the project but determines the profits of the project. Cash flow such as Internal Rate Return and Net Present Value of investments.
Gross profit margin.
Net profit margin.
Debt to equity ratio. Financial Statement.
Customer metrics Customer life value.
Customer acquisition This indicator shows how satisfied the customer or client is. Customer-organization relationship Repurchase.
Statements on the customer repurchase rate.
Process metrics Customer support Tickets.
Product defects percentage It is determined by measuring efficiencies during the production process. It is determined by how low the product defect percentage of the project is. The number of defective products produced. Production rates Production reports
People metrics. Employee turnover rate. It determines how the relationships between the people involved in a project. Detects the relationship between the executives and the employees. Employee satisfaction.
Percentages of open position responses.
Bonus Key Performance Indicator Examples & Definitions
Available Incentives. This determines some of the actions taken by the project managers to ensure employee satisfaction and retention. Frequency in which the project manager gives incentives to the employees. Retirement rates.
Internal promotions vs external hires.
Salary competitiveness ratio. Project management report.
Deliverable metrics This is determined by measuring the time taken to complete the project. Due date Completion time Completion report.
Objective and goal The project success is determined by whether it has been able to achieve its set goals and objectives.
Quality metrics This determines whether the project has been able to meet the set quality. Product quality Quality report
In a nutshell, risk and performance management are essential tools for the success of a project. Performance management helps managers monitor and evaluate the progress of their employees. Employees are the greatest asset in a project or organization. They must be managed for them to understand what is required of them. Also, risk management reduces the risk occurrences in a project. A performance and risk management plan is a tool that helps minimize risks and improves the success of a project. Therefore, it is important to have a comprehensive risk and performance management plan to ensure success.
Mohammed, H. K., & Knapkova, A. (2016). The impact of total risk management on a company’s performance. Procedia-Social and Behavioral Sciences, 220, 271-277.
Parameter, D. (2015). Key performance indicators: developing, implementing, and using winning KPIs. John Wiley & Sons.
Salavati, M., Tuyserkani, M., Mousavi, S. A., Falahi, N., & Abdi, F. (2016). Improving new product development performance by risk management. Journal of Business & Industrial Marketing.