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Essential fm Report 94 A bi-monthly in-depth report covering an aspect of facilities management March/April 2011 Essential fm Report 94 March/April 2011 Each issue of Essential FM Report covers a different aspect of facilities management and we would very much welcome any ideas for topics, offers to write articles, or any general comments you might have. Please email the managing editor at the address given below. Managing Editor – Linda Whittle Published bi-monthly by Bloomsbury Professional Ltd, Maxwelton House, 41-43 Boltro Road, Haywards Heath, West Sussex RH16 1BJ Telephone: 01444 416119 Fax: 01444 440426 Email (editorial): [email protected] Email (customer services): customerservices@ bloomsburyprofessional.com ISSN 11471-9835 This publication is intended to be a general guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers. Printed and bound in Great Britain by Hobbs the Printers Ltd, Totton, Hampshire. © Bloomsbury Professional Ltd 2011 Bloomsbury Professional, an imprint of Bloomsbury Publishing Plc Please send submissions to the managing editor 1 In the first article The myth of reporting facilities performance: horizontal-integration by our regular contributor Sezgin Kaya, we will be delving into (as is obvious from the title) the issues with reporting performance. Sezgin also proposes intelligible ways for FMs to identify their reporting requirements. Following this, Global safety in FM has been contributed by Johnson Controls Global Workplace Solutions (GWS). In this article Scott Swanson, Global Director of Environmental and Health & Safety, discusses their initiatives and performance in this particular area. Staying with H&S, in A climate for health and safety, Greg Davies provides his expert view on health and safety, including key issues such as statutory requirements, recent trends and developments, and changes. Additionally he discusses a number of factors that need to be considered in assessing how they might affect FM. Moving on, Jane Wiggins, author of the recently published Facilities Manager’s Desk Reference, has contributed Performance: a natural gift or a learned skill? In this article, Jane takes a detailed look at what performance is and how it applies in the context of FM. To conclude this issue, yours truly has produced A DIY for performance measurement and payment! With this article, I’ve provided some practical guidance and tips as to how FMs can develop their own bespoke mechanism for performance measurement and payment based on KPIs. See you in June! Martijn Groen Commissioning Editor, Bernard Williams Associates EfmR So far in my role as editor I have learned a great deal from the wide array of FM related issues that we’ve covered with EFMR. This month, after spending some time in the think tank, I have come up with a topic that will be of interest to most, as at the moment a lot of FM organisations are looking to save on costs whilst still pushing performance to its very limits. As such, for this issue, we will be covering ‘What is performance in FM and how it can be managed for the better?’ Pushing Performance The myth of reporting facilities performance: horizontal-integration 2 Global safety in FM 4 A climate for health and safety 6 Performance: a natural gift or a learned skill? 8 A DIY for performance measurement and payment! 12 BIFM Training Calendar 14 Infobank 15 Contents: EFMR 94 Mar Apr 11.indd 1 15/04/2011 15:14

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Page 1: WordPress.com - Essential fm Report 94 · 2011. 6. 20. · 2 Essential fm Report 94 March/April 2011 The past 20 years have enjoyed significant research and development into the field

Essential fm Report 94A bi-monthly in-depth report covering an aspect of facilities management March/April 2011

Essential fm Report 94 March/April 2011

Each issue of Essential FM Report covers a different aspect of facilities management and we would very much welcome any ideas for topics, offers to write articles, or any general comments you might have. Please email the managing editor at the address given below.

Managing Editor – Linda Whittle Published bi-monthly by Bloomsbury Professional Ltd, Maxwelton House, 41-43 Boltro Road, Haywards Heath, West Sussex RH16 1BJ

Telephone: 01444 416119 Fax: 01444 440426 Email (editorial): [email protected]

Email (customer services): customerservices@ bloomsburyprofessional.com

ISSN 11471-9835 This publication is intended to be a general guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing of the publishers.

Printed and bound in Great Britain by Hobbs the Printers Ltd, Totton, Hampshire.

© Bloomsbury Professional Ltd 2011 Bloomsbury Professional, an imprint of Bloomsbury Publishing Plc

Please send submissions to the managing editor

1

In the first article The myth of reporting facilities performance: horizontal-integration by our regular contributor Sezgin Kaya, we will be delving into (as is obvious from the title) the issues with reporting performance. Sezgin also proposes intelligible ways for FMs to identify their reporting requirements.

Following this, Global safety in FM has been contributed by Johnson Controls Global Workplace Solutions (GWS). In this article Scott Swanson, Global Director of Environmental and Health & Safety, discusses their initiatives and performance in this particular area.

Staying with H&S, in A climate for health and safety, Greg Davies provides his expert view on health and safety, including key issues such as statutory requirements, recent trends and developments, and changes. Additionally he discusses a number of factors that need to be considered in assessing how they might affect FM.

Moving on, Jane Wiggins, author of the recently published Facilities Manager’s Desk Reference, has contributed Performance: a natural gift or a learned skill? In this article, Jane takes a detailed look at what performance is and how it applies in the context of FM.

To conclude this issue, yours truly has produced A DIY for performance measurement and payment! With this article, I’ve provided some practical guidance and tips as to how FMs can develop their own bespoke mechanism for performance measurement and payment based on KPIs.

See you in June!

Martijn Groen Commissioning Editor, Bernard Williams Associates EfmR

So far in my role as editor I have learned a great deal from the wide array of FM related issues that we’ve covered with EFMR. This month, after spending some time in the think tank, I have come up with a topic that will be of interest to most, as at the moment a lot of FM organisations are looking to save on costs whilst still pushing performance to its very limits. As such, for this issue, we will be covering ‘What is performance in FM and how it can be managed for the better?’

Pushing Performance

The myth of reporting facilitiesperformance: horizontal-integration 2Global safety in FM 4A climate for health and safety 6Performance: a natural gift or alearned skill? 8A DIY for performance measurement and payment! 12BIFM Training Calendar 14Infobank 15

Contents:

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The past 20 years have enjoyed significant research and development into the field of performance management. Kaplan and Norton’s balance scorecard, Neely and Adams’ performance prism entwined with business improvement approaches such as six sigma, lean processes, and theory of constraints drove businesses forward to popular enterprise-wide performance management implementation projects. Yet, given the advancement of such methodologies and richness of data and information to supplement those, executives are still frustrated with not getting the right FM reports they need to make decisions.

Given the amount of changes and log of events in economy, they typically end up with mountains of reports and bulletins weekly. Operational managers, on the other side, secure their operational data in some shadow and duplicate systems to keep a track record of reliable and timely data to run the business, rather than reporting on it. And service managers spend more time preparing reports than questioning the sanity and validity of them. Anything done that is ‘good for business’ is mired somewhere in data or process, not turned into any form to relate itself to business and hence to demonstrate the value of FM.

To the confidence of the facilities industry as a whole, the overload of reporting has been causing a growing disbelief in those so called ‘performance reports’, preparation of which sucks significant amounts of time and resources away from operational or administrative activities crucial for the efficiency of the facilities business. Not to mention the premium of several hours of work on defining performance reports and associated algorithms, process and governance, and crucially painful links to fees and payment. Most of which, during the course of the operations, can end up with redundant processes to operate within the context of a ‘finite relationship’ between client and service providers.

The formality and governance of those terms have become even worse for clients, given the increasing trend of ‘skills drainage’ from client side to suppliers due to outsourcing, which left clients with complex facilities management process and systems that were inoperable with the remaining skills.

There have been, however, successful attempts to align corporate objectives to operations in the past, such as the use of Porter’s value chain analysis, by examining the revenues, expenses, resources, and assets contained in each business process. These were valid and successful approaches to align operations to business ‘vertically’ in the organisational ladder. However, such business approaches entail recasting information from horizontal functions or systems; such as accounting, supply chain, HR, procurement, environmental management, and facilities operations, to provide a business process view. This is typically a challenging task, thanks to horizontally integrated enterprise-wide technologies, which are increasingly becoming capable of providing multi-layered information from various sources and can now turn into management reports in an instance. However,

the challenge is less on technology, but more in the process. It still remains to facilities managers to identify their own reporting requirements before starting to engage with other functions for a comprehensive and horizontally integrated reporting.

This article outlines a simpler way of identifying facilities management reporting requirements at three levels. Each level requires determining reporting frequency, details of content and key business recipients. Once the reporting requirements for these three levels are determined, then FM can engage with other horizontal functions to align data structures for consistent enterprise-wide reporting. For example a stand-alone P&L account for a specific FM contract may not necessarily mean anything other than to its service provider’s account managers and their immediate clients, such as Head of Facilities Managers. But it becomes more relevant to the business when the same report is related to other accountancy reports from Finance, to demonstrate the impact of the same P&L report on the business growth.

FM Reporting

Three levels of FM reporting requirements suggested here as:

1 Relationship management – This level focuses on relationships with key stakeholders. In particular, FM organisations are built upon their relations between customers (including end users and local community), service providers (supply chain), clients and business owners. This requires systematic reporting and intelligence based on account-level information contributing towards the business performance. The primary objective, at this level, is to retain, improve, and expand its commercial relationship continuously, as well as contribute to its clients’ reputation and image. Managing relations is a key success factor outside daily operations and requires a balanced approach between the Supplier Account Management team, in-house executives, and key business owners. More and more FM organisations now adopt ‘relationship modelling’ tools to clearly define stakeholder maps and share a quarterly communication plan with activities between their clients and the suppliers as

The myth of reporting facilities performance: horizontal-integration

The myth of reporting facilities performance: horizontal-integration

RelationshipManagement

Report

Strategic Scorecard • Balanced Measures• Business strategy alignment• Shareholder / Stakehol-

der value

• Risk based management• Efficiency and effectiveness

reporting• Asset / Portfolio Maintenance

and Life-cycle value reporting

• Customer interface• Source documents• Transactions• Day to day reporting

Operations Analysis

Service Reports

Key Reporting inputs

OperationalManagement

ServiceManagement

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The myth of reporting facilities performance: horizontal-integration

part of the management reporting.

The Relationship Management reports mainly comprise of one-stop shop strategic scorecards, which include high level business alignment of balanced measures, including:

profit and loss accounts;

actual and forecast on the targets achieved;

strategic scorecards for specific measures such as management of finance, customers, process maturity, growth;

impact statement on the shareholder/stakeholder value;

stakeholder maps and communications.

2 Operational management – At this level, FM organisations focus on effectiveness and efficiency of maintaining a portfolio, and managing it to the agreed standards by adding value, mitigating risks, and increasing the portfolio or asset quality. The primary objective is to demonstrate that tangible benefits exist in all areas of scope with increased business performance and reduced risks.

The Operations Analysis reports typically include results from a combination of various sources, such as:

risk based management – maintenance, compliance, criticality assessment, and service downtime reliability measures;

efficiency and effectiveness by external or internal benchmarks on cost, quality, environment, space, and occupancy;

asset and portfolio life-cycle value over the contract or asset life-span. This may also include forward maintenance registers, asset utilisation figures, life expectancy, and future value of assets.

Operations analysis reports require internal or external technical competency and expertise on maintenance and management of facilities, operations and assets. Information from daily service transactions are used as part of operational decision making however, not directly included as part of this level of reporting.

3 Service management – This is the transactional level of services. The primary objective of FM Service Management is to offer quality services to provide positive customer experience in a service setting. Daily service transactions between customers and service are captured as the key sources of data to support service reports at this level. There are, however, disjointed approaches to capturing customer data. Lately, following Pine and Gilmore’s1 book titled: The Experience Economy, customer experience has started to enter, and to a certain extend and replace, the concept of ‘customer satisfaction’ in the FM arena. This shifted the focus on collection of customer data. They suggest in the book that a positive customer experience can be achieved by creating memorable, valuable and enjoyable service settings. It is however as yet unknown to most FM practitioners how to apply this relatively new concept into their practice. Only a few innovative FM service providers in

the UK have built up customer experience into their service management offering. They have done this by examining nodal points in a customer journey and enhancing those interaction points between a ‘service’ and customers. The trend with those successful attempts is now towards a holistic approach to services, and focusing on the impressions of customers in the service setting rather than nitty-gritty ‘service tasks’.

This comes with its own reporting requirements. For those organisations reporting on service tasks, accomplishment of each service against an agreement, such as contractual obligation, is key in their information to manage services. To that purpose, service audits are constructed – a mechanism to gather compliance of service provision to its agreed service levels. For managing service, most organisations would find service audits sufficient to operate a service contract. However, for others with a holistic service approach, customer experience is the key service information, and hence they gather information that leads to ‘positive customer experience’. In either of holistic service or service task approaches, data is required from customer’s feedback on the interface with services.

The Service Management Reports typically include results from a combination of various sources, such as:

customer feedback and experience;

delivery compliance to contract service levels;

financial transactions and frequent reporting on budget/actual forecast;

daily service alerts, logs and responses.

The reporting requirements and their content, as identified above, are suggested here as a guide for facilities managers to engage with other business functions to implement and relate their business outputs to executive level stakeholders. The key barrier to implement horizontally-integrated reporting is mainly around culture, process, and people, as highlighted by a number of authors including Kennerly et al.2 But a participative and consultative management style, as an earlier work3 claimed, could handle this issue if the following qualities of the performance reporting regime were set up in those organisations:

1 improved visibility;

2 reduced ambiguity; and

3 improved communications.

Despite the barriers of its implementation, a horizontally integrated reporting across different business functions requires facilities managers to clearly communicate their requirements at different management levels, and participate in initiatives with their peer colleagues in a participative and consultative manner.

Sezgin Kaya, Senior Consultant, IBM Global Business Solutions EfmR

1 Pine, J and Gilmore, J (1999) The Experience Economy, Harvard Business School Press, Boston.2 Kennerly, M and Neely, A (2003) ‘Measuring performance in changing environment’, International Journal of Operations and Production Management, V 23 No 2.3 Nudurupati, SS (2003) Management and Business Implications of IT-supported Performance Measurement, PhD Thesis, University of Strathclyde.

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Essential fm Report 94 March/April 20114

Safety is at the top of the corporate agenda for good reason. Most importantly people’s lives depend on it, but there are also other considerations. A poor safety record or incident can also irrevocably damage a company’s reputation, affect its share price and, in extreme cases, lead to the criminal prosecution of company officers and directors. Therefore a culture of safety is more important today than ever before.

Johnson Controls Global WorkPlace Solutions (GWS) is a leading provider of facilities, commercial real estate and energy management for many of the world’s largest companies. The organisation is further elevating its commitment to safety by applying global safety metrics across the business, driving the consistency of its Environmental, Health and Safety (EHS) program.

Scott Swanson, Global Director of Environmental, Health and Safety for Johnson Controls GWS, discusses its initiatives.

Why does Global WorkPlace Solutions have such a strong emphasis on safety?

In all areas there is a heightened awareness of compliance. As a company, we want to do the right thing for our employees and create a safe environment where they want to work.

A strong focus on EHS is a reflection of how our business operates. Our global customers share that vision, and are confident in our rigorous standards.

Our understanding of EHS has been gained through our own environments as well as in our customers’ spaces, including process safety, validated environments and general industry. We intrinsically understand how to mitigate risk and treat our customers’ spaces like our own.

What was the motivation behind establishing a global safety program?

Global WorkPlace Solutions recognises that as we continue to expand our business, we need a more consistent way to operate and measure our performance. Our customers are facing the same challenges that we are, and need help to address them. Johnson Controls is often called upon by its clients to incorporate global metrics into a comprehensive EHS program. Whether it is a validated laboratory, manufacturing plant or office environment, our universal safety standards apply.

To meet our customers’ demands and improve our program,

Johnson Controls is building a global EHS scorecard system that outlines the minimum standards of how we operate. As a global initiative, it’s imperative our system be flexible to accommodate all regions, while maintaining our EHS expectations and minimum compliance requirements. Our approach is performance-based rather than prescriptive. We maintain consistent Johnson Controls standards which must be applied and are often above those prescribed by a country’s legislation.

Describe the global EHS scorecard

The EHS scorecard measures leading indicators, such as near misses, employee and contractor training, and workplace inspections. This measurement system fosters a positive EHS culture and enables our company to focus on safety.

The EHS metrics are built into the Global Performance Scorecard System (GPSS). Customers can view our performance in real time. Our ultimate goal is to measure not only ourselves, but our contactors as well.

Leading Indicator and Safety Culture metrics are tracked in a standard scorecard for our employees and contractors. Some of the measures are highlighted below:

Toolbox talks – These regular meetings are a critical component of our program. The sessions allow training materials and information to be regularly distributed as well as to provide an emphasis on constant awareness and engagement.

New staff training & PPE – By ensuring we effectively train and protect our new workers we can reinforce our message and help them become part of our EHS excellence and success.

Unsafe act / unsafe condition reporting – We can identify issues before they become incidents by increasing attention to what is often the lowest level of the traditional incident pyramid. Our focus is firmly rooted in prevention and it begins with recognition of these acts and conditions which may lead to more serious events.

What are the challenges implementing a global program?

Each country or organisation will have components that need to be customised. However, we’re creating a more standard foundation for everyone.

A key challenge has been entering into emerging markets to implement new programs. As with any new market, there are cultural nuances and differences that need to be understood to

Global safety in FM

Global safety in FM

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Global safety in FM

allow effective execution of our program. The implementation of our program is supported by creating a behavioural shift to break down the natural resistance to change and challenge the status quo.

How do you develop a safety program for a customer?

An effective EHS program needs to work in unison for both Johnson Controls and the customer. We collaboratively work with our customers to employ high standards in a form and environment that aligns with their business needs. We take into account their priorities and blend them into our program.

We offer a comprehensive EHS program, which is a key differentiator. Each component is integrated and contributes to the success of the overall program. For example, we partner with HR to promote wellness programs, ultimately resulting in more productive employees. Our expertise spans all three of the disciplines (environmental, health, and safety), and blends them into an integrated program.

What type of training do you require for your employees?

In addition to general safety training, we require task-based, functional-level training that is specific to the requirements of each project. Our training is a combination of hands-on experience, classroom instruction, and online programs. Our multi-faceted approach ensures we effectively reach everyone. For example, PureSafety is an online program that enables us to reach our distributed workforce and to provide both training and EHS-related announcements in an efficient and consistent manner.

We also recognise that as we continue to expand globally, it’s important to offer and develop training in native languages to ensure the correct message is delivered and received. Guaranteeing that the message is clearly understood at the frontline is critical to our success.

How has Johnson Controls focus on EHS and safety evolved over the years?

Global WorkPlace Solutions is the first business within Johnson Controls to appoint a global EHS leader to provide a single point of contact for support and direction across multiple regions and market units. We take on the challenge of doing what we say we’ll do and making sure it is done consistently everywhere we deliver services.

Our company made a significant cultural shift in 2008/2009 by focusing on the personal aspect of safety. This involved ‘making safety personal’ by both holding people accountable for their actions, as well as fostering safe behaviours in people’s everyday lives. We are of the mindset that safety is something you do all the time, not just while at work.

How does GWS remain competitive and best-in-class?

We learn from both our internal businesses and external customers. If we find an innovative program or better way to do things, we will adopt that aspect and adapt our program. When an incident does occur, we take immediate action, and then dissect the incident to see if any lessons can be learned and incorporated.

What is the most important thing we’ve done to improve the safety program?

The single most important thing we’ve done to improve our safety program is to engage our leadership. Our business executives have made it a business priority by building it into every level of the business. Safety is one of the core values of Johnson Controls Global WorkPlace Solutions.

How has your background prepared you for this job?

My early career was spent in the consulting and construction industries. This experience gave me an appreciation of how to win and retain customers through relationships and performance. It also taught me to adapt to the frequent and diverse challenges on a large construction project. I have been able to apply this problem-solving ability and adapt as the GWS business has grown in size, scope, and geography.

What do you most enjoy about working in this field?

I enjoy many things, but the most rewarding is working with passionate people. My EHS colleagues truly care and want to make a difference. Working alongside professionals who have a personal investment and commitment is enjoyable and energising.

What keeps you up at night / what are your main headaches?

My sleepless nights centre around two things – what might go wrong and what has gone wrong.

The EHS world is first about preventing incidents. We need to be continuously focused on our risks and make sure we have done everything possible to eliminate or mitigate our exposure. We operate in a very dynamic business and this is a constant challenge. Once an unfortunate situation does occur it is our responsibility to make sure we learn why it happened and what we can do to prevent a reoccurrence. I take a great deal of personal responsibility for corrective actions and making sure we do not have repeat incidents.

Scott Swanson, Global Director of Environmental Health and Safety for Johnson Controls GWS EfmR

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A climate for health and safety

Facilities management (FM) and health and safety have always been allied. The scope of each area routinely overlaps, aligns or just crashes into one another (bad example accepted, content based); both provide business enabling support and both can be misunderstood by the wider organisation. Finally, FM as a profession is inescapably one where the activities undertaken by, or on behalf of, the department, can kill or seriously injure if things go wrong.

Over the 25 years or so that FM has been recognised in the UK, we have seen over 120 statutory instruments owned by the Health and Safety Executive (HSE) come into force, or be amended. The majority, like FM, are concerned with either people, premises or process and have been complemented by building regulations, employment law and environmental/energy legislation.

For the latter, requirements have come at a pace and in some instances, the Carbon Reduction Commitment Energy Efficiency Scheme (CRC) for example, gone on to change and change again. The same is true for fire with the Regulatory Reform (Fire Safety) Order (RR(FS)O) and the Disability Discrimination Act (DDA) into the Equality Act.

Some of these changes have been welcome; the RR(FS)O brought a myriad of different and on occasion contradictory regulations into one entity. It also helped expand the thinking from one of reactivity (evacuation, fire detection and fire fighting) to proactive fire management. As a look at the broad figures over the last four

decades show, we had become good at fire life safety, but bad at stopping fires happening in the first place. Others, such as the Equality Act, see development, but no real substantial changes to the anticipatory requirements placed on businesses.

Following Lord Young’s review ‘Common Sense, Common Safety’ last year however, health and safety looks like it is in for a big change in emphasis. While the main theme of reducing loss of life and injury in the workplace should, and won’t, change, health and safety implementation and enforcement looks like it is about to.

On the 21st March 2011, Safety Minister Chris Grayling’s announced reforms to health and safety and its enforcement, seeing proactive inspections drop in ‘lower risk’ workplaces to help stop ‘stifling businesses and holding back economic growth’.

While on the face of it many in FM may welcome such a change, does it strengthen or lessen what the industry has been achieving over the last three decades? There are a number of factors to consider in assessing how this might affect our industry.

1. Hazard and risk have been confused:

Lord Young’s report identified the majority of office, retail and school premises as ‘low hazard’, where the potential to cause harm compared to other sectors, agriculture, construction,

6

A climate for health and safety

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A climate for health and safety

manufacturing, is low. Unfortunately too many people have transposed this into ‘low risk’ which is the likelihood that harm maybe realised. So while these sectors can legitimately be categorised as low hazard, they only become low risk if employers and employees do something to reduce it. This ‘low risk’ message could be sending out the wrong signals and a false impression therefore to all levels of the business, especially senior management.

2. Ill health and poor safety has a direct business cost:

The Health and Safety Executive statistics report for 2009/10 identified:

2.1 million workers or former workers self reported ill health;

Doctor or specialist physician reports indicated an overall incidence of 1500 cases per 100,000 workers;

There were 152 workers fatally injured;

There were 26,061 non fatal injuries reported and a further 95,369 injuries causing three days or more absence from work;

28.5 million days lost during the year.

This means if you are an organisation of 500 people or more you can expect to:

Lose 600 days to work related ill health and injury;

Have 6 RIDDOR reportable injuries, and a lot of subsequent investigation work to do.

What effect on productivity, time and profit to your organisation does all this have? Yes, some of these are unavoidable accidents, but the major culprits remain musculoskeletal disorders (back, neck, upper and lower limb), stress and slip, trips and falls. How many of these, with little real effort, could be better managed and so avoided altogether? For stress it is typically human resources who manage it; for the others it will be firmly in the domain of FM.

3. Lack of enforcement leads to lack of compliance for some:

Failure to enforce leads to failure to comply and therefore failure to achieve, as has been seen recently with our implementation of the Energy Performance of Buildings Directive (EPBD). With year two display energy certificates (DECs) showing 50% plus non-compliance and air conditioning inspections 90%, will health and safety go the same way with no proactive enforcement?

While the 2009/10 injury/ill health statistics could be better overall, particularly with regard to workplace fatalities, the trend is one of continual improvement. This hasn’t happened by accident and surely is a clear indication something is working. Conversely how much carbon and energy are we wasting by those failing to comply with the EPBD?

4. Stifling or striving?

Our health and safety burden is stifling our businesses, which are spending too much time on this area and so not on profitable core activity. If you examine corporate social responsibility (CSR) reporting trends however, this argument is not wholly reflected. Of the over 3500 reports published in 2009 and looked at by CorporateRegister.com, close to 50% of them included direct information on health and safety. CSR by definition is a voluntary activity, so is this non-core spend seen as a cost or an investment by these organisations? Active, well managed, proportionate, workplace compliance is good for business.

5. Non-financial as well as financial accountability:

The ‘fee for failure/fault’ proposed by the HSE is however long overdue. We have seen the effect uncontrolled risk taking had in the financial sector, which is directly affecting all our lives currently; the same approach for health and safety can also cost lives though.

If an organisation decides not to manage its health and safety risks and takes chances, it may also start doing it in other areas and so potentially gain a competitive advantage to increase business/profit. The result is that others start doing it too and, with no proactivity in inspections by the enforcing agents, it becomes the norm. Until that is, something goes wrong. Is this not precisely what happened in banking?

The Environment Agency (EA) has, as well as the regulatory framework, been using the Proceeds of Crime Act (POCA) as a means of recognising and recovering costs where failures have occurred. The HSE ‘fee for failure/fault’ should mirror this and be an equally big stick/deterrent for those sectors where proactive inspections will be lost.

Balance these against a recessionary strategy of cutting cost, minimising property, maximising remaining space and outsourcing non-core activities. The result – changes in practice, changes in buildings, changes in occupancy, changes in hazards and therefore possibly changes in risk.

How will these be firstly identified and then managed? This is where FM should be not just looking to reactively solve the problems, but flag the issues and consequences in advance. It needs to engage with senior management to provide business-based solutions where the risks evident are managed to mutual benefit.

In reality, the likelihood is that wider forecast changes will have little direct impact for most organisations in the short term, so nothing will substantially change. There will be some who see the ‘low risk’ headline and then do divert spend or alter focus. But for the majority the status quo will be maintained, with the additional chance of having to further justify aspects of spend or activity. There will be others though where that RIDDOR reportable illness, accident or occurrence leads to an external inspection or investigation. Reasonably practicable and ‘low risk’ can take on very different connotations here.

Greg Davies, Head of Service Development, Elementus EfmR

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Performance: a natural gift or a learned skill?

So what is understood by the term ‘performance’? Ask a young person and they may say it’s about acting. Ask a group of facilities managers, and what could the range of responses be?

‘It’s about my building – does it provide the right environment to allow the occupants to work efficiently?’

‘It’s about the contract – am I delivering the services against the SLA, meeting my KPIs and honouring the terms of the contract?’

‘It’s about me and the team – are we doing the best we can, meeting our agreed objectives and doing a good job?’

‘It’s about the whole organisation – are we meeting our customer’s expectations?’

Two dictionary definitions of performance are shown below:

Accomplishment of a given task measured against pre-set standards of accuracy, completeness, cost and speed.

Successful execution of a contract, or fulfilment of an obligation, in a manner that releases the performer from all liabilities under the contract.

The new BIFM Level 5 qualifications offer a unit dedicated to topic of performance. Unit FM5.08, entitled ‘performance measurement in facilities management’ enables learners to develop a knowledge and understanding of the techniques and processes of business planning, objective setting and performance management within the facilities management function. The unit comprises three main learning outcomes, and each of these in turn comprises a number of assessment criteria. The topics likely to be covered in a tuition programme or expected in a written piece of work on this topic include:

relationship between business planning processes and performance measurement in facilities management

mission statements and their use

management control systems

the principles of performance measurement

review and evaluation techniques

change management

continuous improvement

the use of performance measurement to drive forward the business plan

service level agreements

key performance indicators

stakeholder relationships

theories and principles of benchmarking

In the work context, performance is linked to management processes in many ways. For example, organisations may have performance management systems for their staff, for budgetary control and for compliance. Measurement systems are plentiful in most organisations. However, as the old saying ‘only the work that is measured gets done’ goes, there is a danger that organisations introduce ever complex measurement schemes that detract from the actual work. Consider the FMs with over 50 KPIs to monitor each month – do they have any time left over for customer relationship management, innovation and creativity; services development and strategic planning? The challenge is to develop a performance management system that ensures effective and efficient measurement of the right things that will inform decision making. It’s so frustrating when you discover that your time and effort has been wasted measuring the things that are no longer important or needed.

Performance management can be defined as an assessment of an employee, process, equipment or other factor to gauge progress toward predetermined goals. It can therefore apply to a wide range of business situations.

Performance measures quantitatively tell us something important about our products, services, and the processes that produce them. They are a tool to help us understand, manage, and improve what our organisations do. Performance measures let us know:

how well we are doing

if we are meeting our goals

if our customers are satisfied

if and where improvements are necessary

The results provide us with the information necessary to make intelligent decisions about what we do.

Performance: a natural gift or a learned skill?

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Performance: a natural gift or a learned skill?

A performance measure is composed of a number and a unit of measure. The number gives us a magnitude (how much) and the unit gives the number a meaning (what). Performance measures are always tied to a goal or an objective (the target). Performance measures can be represented by single dimensional units like hours, meters, nanoseconds, monetary units (euros or pounds sterling), number of reports, number of errors, number of qualified employees, etc. They can show the variation in a process or deviation from design specifications. Single-dimensional units of measure usually represent very basic and fundamental measures of some process or product.

More often, multidimensional units of measure are used. These are performance measures expressed as ratios of two or more fundamental units. These may be units like miles per gallon (a performance measure of fuel economy), number of accidents per million hours worked (a performance measure of an organisation’s safety system), or number of on-time supplier deliveries per total number of supplier deliveries. Performance measures expressed this way almost always convey more information than the single-dimensional or single-unit performance measures. Ideally, performance measures should be expressed in units of measure that are the most meaningful to those who must use or make decisions based on those measures.

Most performance measures can be grouped into one of the following six general categories.

However, certain organisations may develop their own categories as appropriate depending on the organisation’s mission:

1 Effectiveness: A process characteristic indicating the degree to which the process output (work product) conforms to requirements. (Are we doing the right things?).

2 Efficiency: A process characteristic indicating the degree to which the process produces the required output at minimum resource cost. (Are we doing things right?).

3 Quality: The degree to which a product or service meets customer requirements and expectations.

4 Timeliness: Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criterion is usually based on customer requirements.

5 Productivity: The value added by the process divided by the value of the labour and capital consumed.

6 Safety: Measures the overall health of the organisation and the working environment of its employees.

The attributes of an ideal unit of measure are:

Reflects the customer’s needs as well as our own

Provides an agreed upon basis for decision making

Is understandable

Applies broadly

May be interpreted uniformly

Is compatible with existing sensors and measures

Is precise in interpreting the results

Is economical to apply

Successful performance measurement systems will adhere to the following principles:

1 Measure only what is important. Do not measure too much; measure things that impact customer satisfaction.

1 Attainable Should be met with reasonable effort under the conditions that are expected to prevail

2 Economic Cost of setting and administering should be low in relation to the activity covered

3 Applicable Should fit the conditions under which they are to be used. If conditions vary, should contain built-in flexibility to meet these variables

4 Consistent Should help to unify communication and operations throughout all functions of the company

5 All-inclusive Should cover all interrelated activities. Failing this, standards will be met at the expense of those activities for which standards have not been set

6 Understandable Should be expressed in simple, clear terms, so as to avoid misinterpretation or vagueness. Instructions for use should be specific and complete

7 Measurable Should be able to communicate with precision

8 Stable Should have a long enough life to provide predictability and to amortise the effort of preparing them

9 Adaptable Should be designed so that elements can be added, changed, and brought up to date without redoing the entire structure

10 Legitimate Should be officially approved

11 Equitable Should be accepted as a fair basis for comparison by the people who have the job of meeting the goal or standard

12 Customer Focused Should address areas important to the customer (internal/external) such as cycle time, quality, cost schedule performance, and customer satisfaction

Table 1

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10 Essential fm Report 94 March/April 2011

Objective Setting

Controlling

Evaluating

Monitoring

Planning

Implementing

Gathering Information

AnalysingForecasting

Performance: a natural gift or a learned skill?

2 Focus on customer needs. Ask our customers if they think this is what we should measure; find out what is important to the customer.

3 Involve employees in the design and implementation of the measurement system. Give them a sense of ownership, which leads to improvements in the quality of the measurement system.

Good performance goals or standards are:

See Table 1, previous page.

So how can the FM get to grips with performance management? Firstly the facilities manager has to understand and respond to the organisation’s operating or business plans. A competent FM will have the ability and knowledge to develop short, medium and long term business plans to deliver FM strategies that in turn support the client or employer’s corporate strategy.

The business plan is the master plan for an organisation. Functional departments, including the support departments of HR, Finance, FM and IT, will need their own business plan which could be one, three or five year plans. These plans may include aspects of product, process, people and place; as well as availability of finance and overall market position. Business plans are implemented through the setting of team and individual objectives.

The model MOST can be used to define the organisation’s plan. This will determine what an organisation is seeking to do and the how an organisation will achieve it. It assumes that organisations are better if a systemic approach is applied. This tool can help

to integrate and motivate staff if the MOST is communicated to everyone:

Mission – purpose and direction

Objectives (SMART) – long-term goals

Strategy – long-term plans

Tactics – short-term plans

Secondly, facilities managers need to understand the techniques and processes of objective setting. There are three levels of objectives in an organisation; corporate, departmental and individual. Ideally, these objectives should be consistent in a horizontal, vertical and time dimension. The most common mnemonic to describe effective objectives is SMART:

specific,

measurable, memorable, meaningful

attainable, action-led, agreed, achievable

results-orientated, reasonable, realistic, rewarding and

time bound.

Sometimes, in trying to set objectives, there are so many possible consequences, that it is difficult to assimilate all the information. When the organisation is very complex, techniques such as simulations, scenario planning or risk analysis, are used to determine the appropriate objectives and priorities.

COMMUNICATING

Diagram 1

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Performance: a natural gift or a learned skill?

See diagram 1

The trend for increasing reliance on scorecards or dash boards to record performance over time against a range of indicators had created the need for sophisticated tools for real-time monitoring. CAFM systems and links to other technologies, such as RFID, in the built environment will generate data and information to populate the scorecards. Some organisations may use the classic Balanced Business Scorecard, developed by Kaplan and Norton. This covers the four key areas of performance – financials, internal processes, customer and development.

Measuring efficiency and effectiveness of property and facilities management is a critical component of an organisation’s overall performance management scheme. It will provide opportunities for increased efficiency and delivery of savings. Additionally, measuring efficiency and effectiveness allows organisations to benchmark property occupancy costs against industry best practice informing strategic decisions about buildings and their impact on delivery of FM services.

Examples of measurements include space per full-time equivalent person, cost per square metre, workplace productivity, energy consumption (water, waste, fuel, carbon emissions) and health & safety compliance.

It is important to remember the benefits of measurement, some of which are listed below:

1 To identify whether we are meeting customer requirements.

How do we know that we are providing the services/products that our customers require?

2 To help us understand our processes. To confirm what we know or reveal what we don’t know. Do we know where the problems are?

3 To ensure decisions are based on fact, not on emotion. Are our decisions based upon well documented facts and figures or on intuition and gut feelings?

4 To show where improvements need to be made. Where can we do better? How can we improve?

5 To show if improvements actually happened. Do we have a clear picture?

6 To reveal problems that bias, emotion, and longevity hide. If we have been doing our job for a long time without measurements, we might assume incorrectly that things are going well. (They may or may not be, but without measurements there is no way of knowing.)

7 To identify whether suppliers are meeting our requirements. Do our suppliers know if our requirements are being met?

So to give a good performance to our occupants and customers, the FM needs a good business understanding and a reliable set of performance measures to inform his decisions for continuous improvment.

Jane Wiggins, freelance tutor in FM EfmR

Essential fm ReportBack issues of Essential fm Report are available for £59 per copy. Additional subscriptions are available for £355.Please use the form on the back page or contact Bloomsbury Professional Customer Services on: [email protected] Tel: 01444 416119 Fax: 01444 440426

Essential fm Report 91A bi-monthly in-depth report covering an aspect of facilities management September/October 2010

Essential fm Report 91 September/October 2010

Each issue of Essential FM Report covers a different aspect of facilities management and we would very much welcome any ideas for topics, offers to write articles, or

any general comments you might have. Please email the managing editor at the address given below.

Managing Editor – Linda Whittle Published bi-monthly by Bloomsbury Professional Ltd, Maxwelton House, 41-43 Boltro Road, Haywards Heath, West Sussex RH16 1BJ

Telephone: 01444 416119 Fax: 01444 440426 Email (editorial): [email protected] Email (customer services): customerservices@ bloomsburyprofessional.com ISSN 11471-9835 This publication is intended to be a general

guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission in writing of the publishers. Printed and bound in Great Britain by Hobbs the Printers Ltd, Totton, Hampshire.

© Bloomsbury Professional Ltd 2010 Previously published by Tottel Publishing Ltd Please send submissions to the managing editor

1

However, within Facilities Management we’re in a position to actually do something

about it. That is, we can help the core business become greener. We can actively engage

in sustainable development, save energy, recycle and reduce the amount of ‘impact’ we

have on the environment.Hopefully this latest issue will provide you with some food for thought when considering

new initiatives.

We kick off with Delivering good practice in sustainable FM. In his article Sunil Shah

touches on the ‘gap’ between energy performance certificates (EPCs) and display energy

certificates (DECs) and then continues by discussing some of the ‘best practice’ initiatives

from the BIFM’s annual best practice awards held earlier this year.Then Sustainability in a facilities maintenance business; an article by Mike Proctor

who focuses on ‘the green-wash approach’ and ‘a sustainable business approach’. For

the latter, Mike touches on some key sustainability areas such as processes, culture,

relationship – management and people.Next, Analytics for environment: Sezgin Kaya talks us through the topic of energy. He

predominantly focuses on how to be efficient with energy and how to make savings, but

he also discusses the numbers game – explaining how an organisation can benefit from

studying its own data.In Effective FM outsourcing: far more than a ‘flight-to-price’, Andy Eastwood argues

that multi-service procurement strategies aim to achieve far more than just to reduce

costs. He explains that this is because of the ‘triple bottom line’ – people, planet and

profit, and not ‘just profit’. And finally a book review. Over the last few weeks I’ve delved into Jane Wiggins’ newly

released book: Facilities Manager’s Desk Reference. I’ve written a brief review of it so

that you can decide for yourself whether this is a ‘must-have’ for your bookshelf.See you next time.

Martijn Groen Commissioning Editor, Bernard Williams Associates EfmR

Global warming, environmental concerns, sustainable resources, saving the planet – never before has being ‘green’ been so prominent in every aspect of our lives. The increasing stresses that we the human race face are becoming increasingly concerning

Considering Everything Green

Considering Everything Green 1Delivering good practice in sustainable FM

2Sustainability in a facilities maintenance business

4Analytics for environment

6Effective FM outsourcing: far more than a ‘flight-to-price’ 8

Book Review 9

Contents:

Essential fm Report 92A bi-monthly in-depth report covering an aspect of facilities management November/December 2010

Essential fm Report 92 November/December 2010

Each issue of Essential FM Report covers a different aspect of facilities management and we would very much welcome any ideas for topics, offers to write articles, or

any general comments you might have. Please email the managing editor at the address given below.

Managing Editor – Linda Whittle Published bi-monthly by Bloomsbury Professional Ltd, Maxwelton House, 41-43 Boltro Road, Haywards Heath, West Sussex RH16 1BJ

Telephone: 01444 416119 Fax: 01444 440426 Email (editorial): [email protected] Email (customer services): customerservices@ bloomsburyprofessional.com ISSN 11471-9835 This publication is intended to be a general

guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission in writing of the publishers. Printed and bound in Great Britain by Hobbs the Printers Ltd, Totton, Hampshire.

© Bloomsbury Professional Ltd 2010 Previously published by Tottel Publishing Ltd Please send submissions to the managing editor

1

One would think that with the recent developments of flexible working not everyone

needs to travel to the office under these circumstances. But with jam-packed trains, infinite

hours of traffic jams and stranded motorists reduced to hitch-hiking, people seem to

provide contradicting evidence. Let’s see what the other trends and development were for

this year in FM.

In Mobile computing and FM, Karl Horner discusses the changes in the use of mobile

technology in business and FM. Karl focuses in his article on the usage in FM, the total cost

of ownership, device selection, IT selection and the future.One of our regular contributors, Ken Burkhalter, takes a look at where FM stands, in FM

today: a story of realities and vision. Ken discusses key developments such as economic

constraints, sustainability, technology and the future of FM.Following on with EU2020 FM, Fred Kloet focuses on some of the latest trends and

developments happening across borders. He touches upon gross domestic product,

interoperability, productivity, employment growth, reduction of poverty, skill growth and

sustainability.

In Where FM goes next, Mike Packham briefly touches upon important trends such as the

legislative/regulatory framework, the rapid change in ICT, sustainability and new methods

of working. The main focus of his article however, is based one of the latest developments,

being the current effects of the economic down-turn on FM.Lastly, Bernard Williams continues his Predicting whole-life cost and sustainability of

buildings with the second part of his modelling whole life cost and sustainability series.

I hope you will enjoy this issue and hope you enjoy the festivities!Martijn Groen Commissioning Editor, Bernard Williams Associates EfmR

The tougher winters appear to be becoming a trend and

I was bemused by constant news coverage dedicated to those stuck in traffic. Even more entertaining, those who were spending the night in their offices in sleeping bags... As a recent resident to the UK (I moved here from

Holland 5 years ago) I am amazed the country grinds to a halt as the ‘unexpected’ cold weather arrives every winter!

FM Trends and Developments III

FM Trends and Developments III 1Mobile computing and FM

2FM today: a story of realities and vision 4EU2020 FM

6Where FM goes next

8Press Release

9Predicting whole-life cost and sustainability of buildings (part 2) 10

BIFM Training Calendar 14

Infobank 15

Contents:

Essential fm Report 93A bi-monthly in-depth report covering an aspect of facilities management January/February 2011

Essential fm Report 93 January/February 2011

Each issue of Essential FM Report covers a different aspect of facilities management and we would very much welcome any ideas for topics, offers to write articles, or

any general comments you might have. Please email the managing editor at the address given below.

Managing Editor – Linda Whittle Published bi-monthly by Bloomsbury Professional Ltd, Maxwelton House, 41-43 Boltro Road, Haywards Heath, West Sussex RH16 1BJ

Telephone: 01444 416119 Fax: 01444 440426 Email (editorial): [email protected] Email (customer services): customerservices@ bloomsburyprofessional.com ISSN 11471-9835 This publication is intended to be a general

guide and cannot be a substitute for professional advice. Neither the authors nor the publisher accept any responsibility for loss occasioned to any person acting or refraining from acting as a result of material contained in this publication. All rights reserved. No part of this publication may be

reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior

permission in writing of the publishers. Printed and bound in Great Britain by Hobbs the Printers Ltd, Totton, Hampshire.

© Bloomsbury Professional Ltd 2011 Previously published by Tottel Publishing Ltd Please send submissions to the managing editor

1

These objectives, naturally, will differ from organisation to organisation. However, the

management techniques that can be applied for achieving goals will be quite everyday

ones. If you want to delve more into the strategic role of Facilities Management,

I would high recommend the new RICS white book as reference literature. Moving on, in Risk management in a contract context, David Pearson walks you through

the various principles of risk management. David also takes an in-depth look at how risk

can be managed and controlled contractually and how it ties in with the performance

management side of things.Sunil Shah, our regular contributor, has written Communicating green: gaining buy-in

to sustainable practices. Sunil touches upon some key areas in sustainability, such as

reducing cost and carbon, how barriers for achieving green agendas can be broken down

and how to develop future campaigns.Following on, in Smart Working: what is it and what does it mean for Facilities

Managers? Dr Anne Marie McEwan reflects on particularly Smart Working and

Performance Environments and their meaning and implications for FM practitioners. The

article ties in with Anne Marie’s research-based book, ‘Smart Working: Creating the Next

Wave’ due for publication in April 2011.Lastly, in Predicting whole-life cost and sustainability of buildings (part 3), Professor

Bernard Williams concludes his series about how whole-life costing and sustainability can

be modelled and utilised in practice.As always, until next time.

Martijn Groen Commissioning Editor, Bernard Williams Associates EfmR

Yet another year for Essential FM Reports and for this very first issue of the New Year we’re going to be looking together at a few Management Concepts. It should be evident by now to most practitioners that the focus of FM is not only towards what happens operationally, but that the strategic aspects of the profession also have become paramount to realising the long term objectives of both the organisation and the core business.

Management Concepts lll

Management Concepts lll 1

Risk management in a contract context 2Communicating green: gaining buy-into sustainable practices 4

Smart Working: what is it and what does it mean for Facilities Managers? 6Predicting whole-life cost and sustainability of buildings (part 3) 8

BIFM Training Calendar 14

Infobank 15

Contents:

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A DIY for performance measurement and payment!

Over recent years, I’ve been increasingly involved in the complex process of procurement and my professional input has ranged from merely providing feedback on draft service specifications to managing full blown Total Facilities Management outsourcing exercises. On the performance front, the only thing that has really changed for the better is that organisations are now at a point where they are looking to embrace service performance monitoring, measurement and payment. As a result, this concept has become more intelligible for all stakeholders involved which, of course, is a very good thing.

As most will already know, performance monitoring and payment involves creating a ‘mechanism’ for measurement around the FM service specification that will demonstrate the level of performance that is achieved. This can really only be practically realised by introducing key performance indicators (KPIs) which, when chosen correctly, are straightforward and undisputable quantifiable metrics.

Let us delve a little further by way of example – say that the service provider needs to prepare ‘the board room’ before a key meeting. How would we go about creating a KPI for this? Simple, we capture the essence of what it is that we expect. It could read along the lines of: ‘The service provider shall ensure that the board room is clean and tidy an hour prior to meetings’.

It is now quite easy to monitor the service providers’ performance in this context, whereby the FM merely has to check whether or not the meeting room has been cleaned and tidied an hour before meetings. So we are on the road to best practice, but in practice how does it work? Well if the FM checks the room and it is littered with coffee cups from a previous meeting then this is where performance monitoring becomes truly useful for the organisation, as there will be a quantified performance deduction to pay by the

service provider for such an omission.

It goes without saying that it is human to make mistakes. We should therefore try not to overreact when the odd failure occurs. In our case, the failure could be down to some kind of mix-up at the helpdesk and the request simply did not get through to the operational team. In these situations the service provider cannot be blamed at all (unless it is they who are running the helpdesk!), but under normal circumstances, there should be some kind of ‘tolerance’ built into the system that makes some kind of allowance for the odd mistake, providing that it is not a regular occurrence.

In our example, in order to comply with this requirement, the service provider could be given the chance to remedy the situation up to 15 minutes before the start of the meeting, otherwise a failure event will be deemed to have occurred.

However, this leaves us with an apparent ‘gap’ between the service we pay for, ie cleaning and tidying up the board room 1 hour before a key meeting, and actual service provision, ie we still pay the same amount up to 15 minutes prior to the event. As FMs, we may be okay with one or two failures (our tolerance) but we do not want to be facing consistent failures that are only rectified ‘just-in-time’.

So we also need to capture instances where tolerance is exceeded, eg ‘a failure event will also be deemed to have occurred every time it involves a third consecutive failure in service delivery within the measurement period’.

We have established the fundamentals for creating our KPI and failure tolerance, but we also need to create a measurement period. This will provide all parties with clarity regarding the time

A DIY for performance measurement and payment!

‘Organisations are now at a point where they are looking to embrace service performance monitoring, measurement and payment’

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A DIY for performance measurement and payment!

period when a KPI (which could be daily, weekly, monthly, etc) is reported upon, evaluated and actioned. As the service provider will start again with a ‘clean sheet’, it is important to tailor the measurement period according to the relevant importance of the particular KPI.

Let’s work through an example of how this could work. Our service provider had some real problems getting organised last month which has led to several failure events, say eight, concerning the board room. At the monthly meeting, it is deemed that the eight incidents are viewed as severe under-performance and this needs to be addressed by the contract manager. The following month, the service provider moves several mountains to get it right, and because of their efforts the board room is now up to standard for every single meeting. The performance payment deduction imposed for the previous months’ unacceptable performance has obviously had the desired effect.

This demonstrates the basics of performance monitoring and reporting and how it can improve performance; however, we have not yet considered ‘incentives’ for the service provider to achieve outstanding performance, and this is where a more sophisticated performance payment system comes into play.

With performance payment FM is looking to keep the service provider ‘on the ball’ and continuous improvement is therefore its central tenet. If we go back to our example of the board room, let us say that the agreed performance standard for the service is ninety percent and the service provider achieves ninety one percent in any given month. Now we will be looking to improve on the ninety one percent to maintain the continual improvement

of the service. This is also in the interest of the service provider, as the further they get used to operating above the threshold then the less likely they are to dip below it and succumb to the performance payment deduction system kicking in.

Whilst most organisations are of the opinion that they should be paying out in excess of the agreed contract sum, practice has shown that extremely good performance can be achieved when performance payment cuts both ways. This is based on the principle that sometimes ‘the carrot works better than the stick’, so in our example of the board room, if one hundred percent is achieved, then this could be grounds for granting a ‘bonus’ payment. In this way the service provider will have an incentive to perform better, the end result being continuous improvement.

Now that we have applied and examined the concept of the performance measurement and payment mechanism, let us take a look at what the end product for the board room KPI looks like in practice.

See table 1

and the performance payment mechanism:

See table 2

This is of course just the first step for our endeavours in developing a comprehensive performance measurement and payment system. But as you progress with the development you must not forget – keep it as simple as possible!

Martijn Groen, Bernard Williams Associates EfmR

Service Level Agreement Performance Measurement Performance Thresholds

Reference Category Item KPI Tolerance Period

KPI 1.01 Cleaning Board Room

The service provider shall ensure the board room is clean and tidy an hour prior to meetings

In those instances of failure to comply with this requirement, the service provider shall be given the chance to remedy the situration up to 15 minutes before the key meeting, otherwise a failure event wil be deemed to have occured

Monthly 90% <90% <85%

Performance Achieved Performance Payment Multiplier

95-100% 1.190-95% 185-90% 0.980-85% 0.875-80% 0.770-75% 0.665-70% 0.560-65% 0.455-60% 0.3<55% 0.2

Table 1

Table 2

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Essential fm Report 94 March/April 2011

Please see our programme below for May/June. For more details please visit www.bifm-training.com or ring BIFM Training – 020 7404 0440. Please note the BIFM Training programme is managed by Quadrilect Ltd.

May10-12 The Professional FM 1 [Intermediate] Central London10 The Tender Process Central London11 Cutting Costs but Maintaining Services Central London11 Contract Management FULL Central London2 Negotiating to Win Central London17 IOSH Safety for Senior Executives Central London17-19 Understanding FM Foundation - (optional) ILM Level 3 Award or Certificate in FM Edinburgh24-26 The Professional FM 2 [Intermediate] Central London25 Fire Safety Law & Risk Assessment Central London

June    7-8 Managing Relocation, Fit-Out & Move Central London7-9 Team Leading - ILM Level 2 Award in Team Leading Central London8-9 Display Screen Regulations & Risk Assessment (IEHF accredited) Central London14-15 The Essentials of Property Management Central London21-23 Understanding FM Foundation - (optional) ILM Level 3 Award or Certificate in FM Central London21-22 Disaster Recovery & Business Continuity Central London22 Climate Change - The Impact on FM Central London28-30 The FM Business School Central London29-30 Health & Safety Regulations, Responsibilities & Risk Assessment Central London19-21 The Professional FM 1 [Intermediate] Central London25-29 IOSH Managing Safely certificate Central London27 Fire Safety Law & Risk Assessment Central London

If you are not already a member of BIFM, you may not be aware that membership brings significant savings on all of the BIFM training courses, as much as 20%. For more details on the other membership services and benefits please contact BIFM on 0845 058 1358 or [email protected].

BIFM Training Calendar

BIFM Training Calendar

14

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Essential fm Report 94 March/April 2011

InfobankCommissioning Editor

Sezgin Kaya Sezgin Kaya has built up his expertise and academic background in international facilities management markets, strategic facilities management, asset management service delivery models, facilities systems, benchmarks, and performance management. He has worked as a senior consultant in IBM Global Business Solutions since 2006, and manages cross-border change management projects, standardisation and technology processes for international facilities management organisations. Sezgin can be contacted at IBM Global Business Services – 020 7021 8990.

Scott Swanson

Scott Swanson is the Global Director of Environmental Health and Safety for Johnson Controls GWS (Global Workplace Solutions), the first business within Johnson Controls to appoint a global EHS leader. Further details are available on the Johnson Controls website at

www.johnsoncontrols.co.uk/facilities management.

Martijn Groen

Martijn Groen, MSc (Facility and Environment Management), is an FM Consultant for Bernard Williams Associates. BWA’s FM Division provides experienced and comprehensive FM consultancy services to enable clients to optimise premises and facilities performance, to benefit the organisation as a whole. web: www.bwa.uk.net

e-mail: [email protected].

Greg Davies

Greg Davies BSc (Hons) Microbiologist is a Head of Service Development for Elementus, a leading independent health, safety and environmental consultancy. Elementus proactively supports many organisations across the UK, providing help, advice and training on workplace compliance, ensuring a safe and sustainable working environment and giving complete confidence in organisational policies and operations.

E-mail: [email protected]: www.elementus.comTel 0844 800 7705.

Jane Wiggins

Jane Wiggins is a freelance tutor in FM. She delivers the Level 4 BIFM Certificate at the RTC for service leavers, the Level 5 Diploma in partnership with Blue Eye and the Level 6 Diploma at Central College of London. She has tutored the BIFM Student of the Year winners from 2004 and each year to 2010 under the old Part 1 and 2 examination scheme. In addition, Jane has written the Facilities Manager’s Desk Reference – a text to support all levels of facilities management staff in their careers. Jane also works as an Associate tutor at the College of Estates Management in year 1 and 3 of the MSc Facilities Management course.

[email protected] 033341www.fmtutor.co.uk.

Authors

Infobank

15

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