Prototype a Performance Management System for Linking Performance Measurement and Case -based Knowledge

nigerianfortyfortΔιαχείριση

6 Νοε 2013 (πριν από 3 χρόνια και 5 μήνες)

60 εμφανίσεις

1

Pr ot ot ype a

Per f or mance Management Sys t em f or Li nki ng

P e r f o r ma n c e Me a s u r e me n t a n d Ca s e
-
b a s e d Kn o wl e d g e

CHUNG
-
JEN
KUO

(
d917806)
, S
H
ANG
-
YU
A
N
YANG

(
g913841)
, and
AMY TRAPPEY

Department of Industrial Engineering & Engineering Management, National Tsing Hua Uni
versity
, 101 Sec. 2 Kung Fu
Rd., Hsinchu 300, Taiwan, R.O.C.

Abstract

This study integrates
b
oth performance measurement and knowledge management to develop a performance
management framework and
its prototype
system. The framework enables employees to cre
ate knowledge relevant to
performance indicators of the enterprise to contribute to competitiveness of the enterprise. Although the framework may
limit the scope of knowledge to case
-
based knowledge which relates to performance indicators, however, it also

provide
s

a
mechanism to filter knowledge which is irrelevant to an enterprise’s performance by the performance indicators, and
thereby it can ensure both usefulness and cost
-
effectiveness of the created knowledge for the enterprise.
The prototype based
on

a semi
-
conductor company in Taiwan has
demonstrated
that the integrated performance management system could assure
the conveyance of performance objectives and work plans from high
-
level managers to low
-
level labors and can also
facilitate both vertical a
nd horizontal communication and learning in an enterprise.

Keywords
: Knowledge management, Performance measurement, Performance management, Performance indicator,
Case
-
based knowledg
e


1.
Introduction


In an enterprise, both managers and
regular
employees
should set their individual objectives
according to entire objectives of the enterprise, and endeavor to achieve the objectives by themselves.
That is, “management by objectives”. And the appraisal of performance of specific employee hinges on
his/her cont
ribution to objective achievement of the enterprise (Drucker, 1954). Balanced
-
scorecard
(Kaplan and Norton, 1996) is an even more concrete performance measurement method which enables
an enterprise to deploy strategies into performance indicators and link
upper performance indicators to
lower ones based on
their
cause
-
and
-
effect

relationship
.
Nevertheless, neither management by
objectives nor performance measurement provides managers and
regular
employees with answer to
the
question
:

“What he/she ought to d
o?

”, while without answer to
the question:
“How he/she ought to do?
“ to make contribution to the enterprise.

Organization learning (Senge, 1990) stresses that development of creative potential of employee
2

enables whole capability of the enterprise. The o
bjective of organization learning is to provide answer
to
the
question
:

“How he/she ought to do to make contribution to the enterprise?” However, most
arguments regarding organizational learning were too ambiguous and do not provide concrete
architecture f
or implementation (Garvin, 1993).

Knowledge management is an overwhelming fad in
both
the academic community and the business
arena in recent years. A considerable researches discussed topics regarding definition of knowledge
(Drucker,1998; Kerr,1991; Alle
e,1997; Davenport&Prusak,1998), level of knowledge (Quinn, et
al.,1996; Allee,1997), category of knowledge (Kerr,1991; Nonaka, et al., 1995; Davenport and Prusak,
1998), transfer of knowledge (Nonaka, et al., 1995; Davenport and Prusak, 1998), methodology
to
implement knowledge management (Davenport and Prusak, 1998), application of information
technology (Quinn, et al., 1996; Davenport and Prusak, 1998) and conformation of organizational
culture (Drucker, 1998; Nonaka, et al., 1995; Quinn, et al.,1996; D
avenport and Prusak, 1998). Few
researches discussed the relationship between knowledge and performance indictor in generic
enterprises
. If
knowledge

is not limited within certain
adequate

scope,
it
may
cost the enterprise
considerably much to manage the

unbounded knowledge it created and stores, hence it

may be

difficult
for the enterprise to make sure if the knowledge it’s managing can really enhance
its

competition.

This paper discusses performance measurement and knowledge management simultaneously, a
nd
our goal is to develop a feasible framework which enables the generic enterprises to undertake
performance measurement and knowledge management integrally

and cost
-
effectively.

Performance indicator
Data warehouse
1)
Filter and reinforce content
2)
Store the new case
-
based
knowledge
Performance
Measurement
Employee
Case
-
based
knowledge
IT System

Plan

Collect data

Develop and select
proposals
Performance
Indicator
1

Target

Actual

Benchmark


Performance
Indicator
k

Target

Actual

Benchmark
Performance Indicator K

Author

Motive and objective

Methodology

Internal

External

Invention

Contribution to performance

Improved level of the
performance indicators

Motive to improve

Identify problem

Identify opportunity
1)
Search cases
-
based knowledge by
performance indicator
2)
Learn through documents
3)
Learn by face
-
to
-
face with authors

Do

Implement the proposal

Check

Improved ?

Action

Create a case
-
based
knowledge
Case
-
based Knowledge
Database
Yes
No
Performance management system

Review performance level by indicators

Search knowledge/author indexed
by
performance indicator

Create/filter/reinforce new knowledge
Business Process

Fig. 1. The performance management framework

3

2.
The
p
erformance management framework

The performance indicators that an enterprise stresses determine the objective
s

and behavior of
department
s

and individual
s

in the enterprise (Goldratt, 1990). The contribution to the enterprise by
individual employ
ee depends on how much information and knowledge
he/she

posses
ses

(Kaplan &
Norton, 1996), and employees are the major resources to create and store knowledge for an enterprise
(Edvinsson, 1996). Hence, it is essential to competitiveness of the enterprise
to develop a framework
which enables employees to create knowledge relevant to performance indicators of the enterprise.

The performance management framework
we
proposed is shown in Fig. 1. There are 3 process
aspects in the framework
: a
)

performance

measu
rement

b
)

employee

and
c
)

case
-
based knowledge,
while
each aspect is supported by corresponding IT system.

Performance measurement

In an enterprise, the performance indicators of each
department
and employee can be defined by
means of balanced scorecard (K
aplan and Norton, 1996), which deploys objectives of top
-
level
manages to indicators of bottom layers causally. The target of each performance indicator can be set
considering historical data and plan for the future. Besides, Benchmarking is a persuasive a
pproach to
set effective performance target (Camp, 1989).While each employee knows his indicator and objectives,
then IT
system
is needed to provide
the
employee

with
target value and
actual value
s
of each individual
performance indicator so that
he/she
ca
n
monitor his/her performance level and identify the weakness
for improvement
.

Case
-
based knowledge

Case
-
based knowledge in this study means success
ful
improvement experience

recorded by an
enterprise
. The major index of case
-
based knowledge is performance

indicator, it provides employee to
query and learn the success
ful
experience that is related to the performance indicator. The secondary
index
of case
-
based knowledge
is the author of the knowledge. Employee
can
know who created the
knowledge and
thus
he
can
learn the tacit

knowledge by face to face.

Employee

This system will be designed to provide performance information timely and completely. When the
actual performance value is
worse
than the objective, it prompts employee to improve. According
Deming’s

management cycle, plan

do

check

action,
a employee

can improve his
/her

performance
following
this process.

A e
mployee who
intends
to improve his performance
can
query the related experience and the
author in case
-
based knowledge
, refer to
the experienc
e and make plan

of his own
.
Once an e
mployee
executes
his
improvement
plan and
create new knowledge
, the enterprise should
encourage
him/her to
4

put
his/her
explicit knowledge into the database

of case
-
based knowledge
. The major index
of
case
-
based knowledg
e
is performance indicator

and i
t must be corresponding to the performance
indicator
database
, while t
he secondary index is the
author
;

it

must be corresponding to the human
resource database.
Except to the document of case
-
based knowledge, the u
ser can qu
ery more
information about the author, such as educational background, experienc
e, and research field.

3. Develop prototype of the performance management system

Th
is chapter will develop a system prototyp
e
to demonstrate the performance management
framewor
k introduced in previous chapter which links both performance indicators and their relevant
case
-
based knowledge.
And the
empirical
case we refer to is a

backend business unit
of
a
semiconductor manufacturing company

in Taiwan

s science
-
based industrial pa
rk.

Architecture of the system
prototype


Fig.
2

illustrates the
architecture of
prototype
o
f the performance management system, and the
architecture is the base for further design of system function and user interface. There are 2 major
functions
-
update a
nd query for performance indicators and case
-
based management
respectively
. The
dot lines illustrate the relationship between two functions, for example, performance indicator and
case
-
based knowledge are relevant with each other, and the case
-
based
knowle
dge

is relevant with
employee

data of H
R (Human Resource)

database.

Performance
Indicator
Database
User client
WWW
Case
-
based
Knowledge
Document
Web Server
ASP
Query/Insert/Update
Reply result
Query/Insert/Update
Reply result
Query/Insert/Update
Reply result
HR
Database

Fig.
2
.
Architecture

of t
he performance management
system

We build
a web
-
based
performance management
prototype system
by ASP

technology which
dynam
ically links the backend Access database of performance indicators and relevant case
-
based
5

knowledge document files
.
Fig. 3 illustrates how
a

user logs in the system and the default main page is
demonstrated in Fig. 4,
user can setup definition of performa
nce indicator (PI), setup linkage
relationship of case
-
based knowledge (CBK) to performance indicators, and query information
regarding both performance indicators and their relevant case
-
based knowledge.




Fig.
3
.
Log in

Fig.
4
.
Main page


Define the p
erformance
indicator
s

and the
database

In
the organization of our
empirical

case
,
they defined the high
-
level performance indicators which
are usually
financial

catego
ry
, see upper part of the data in Fig.
5
. Then lower level performance
indicators are
deployed

from higher level ones by
their
cause
-
effect relationship

(Kaplan and Norton,
1996)
, and Fig. 6 shows how the cause
-
effect relationship between 2 performance ind
icators is defined
,
and how existing case
-
based knowledge documents are linked to the dedicate performance indicator.




Fig.
5
.
Definition of
performance

indicator

Fig.
6
. Define relationship

between performance indicators

6


We define
each performance indicator

by 6 attributes
:

(a).

PI No.: A sore index to be utilized by application IT system and users.

(b).

PI name: A name for user to recognize it

s meaning
.

(c).

Dep
artment
:

To define the department in the o
rganization who is responsible for result of the
performance indicator.

(d).

Category:

To categorize each performance indicator to 4 categories defines by balanced
scorecard, i.e., finance, customer, internal process and learning
(Kaplan and Norton, 1996)
.

(e).

Meas
urement

unit
:

To define measurement used to measure result of the performance indicator.

(f).

Type of the target: To define if the value of the PI is

the higher the better


or

the lower the
better

.

(g).

Relation to upper PI: The define cause
-
effect relationship
to upper performance indicator.


Update and q
uery
value of
p
erformance indicator
s

Fig.
7

illustrates how target value and actual value of each performance indicator are updated
, and

if the actual value is worse than the target, the character color of the P
I will turn to red to alarm the one
who update the value.

Fig.

8

shows that once an
employee

of individual department logged in the performance
management system
, the
system

shows default initial
screen

to show the
performance

indicators of the
department

he/she belongs to.
When the actual value
of a performance indicator
is
worse
than
its

target
value, its characters are red to alarm the
employee to
notice
,

and he
can
review the actual value of
dedicate performance indicator an
d compare it with target valu
e.


7




Fig.
7
.
Update
value of
performance indicators



Fig.
8
.
Query and monitor performance indicator
s


Monitor a p
erformance indicator and
relevant case
-
based
knowledge

In Fig. 8, a
n
employee can click the

detail


icon of dedicate performance indicator, then the
system
shows

its, see Fig.
9
, related
upper/lower
performance indicators and
r
elated
case
-
based
knowledge documents
as well. H
e
/she

can open the document
s

to refer to
it conte
nt
and conceive the
idea of improving level of the performance indicator, as indicated in Fig.
10
.


Fig.
9
.
Query
detail information of
a dedicate performance indicator

8


Fig.
1
0
.
Query
content of
a
case
-
based knowledge

relevant to a performance indicato
r

Create the case
-
based
knowledge

Once en
employee

improved the performance level of dedicate performance indicator, he will be
encouraged and/or asked to create a new case
-
based knowledge to
depict

his experience and knowledge
utilized in his work for im
provement.
The cased
-
based knowledge is
categorized

to
several

categories,
e.g., job completion report, project closing report, excellent improvement proposal, excellent QCC
work and prizewinning work internally or externally.
Fig.
11

illustrates
how a cas
e
-
based
knowledge

document

(Word file) is added to link to dedicate performance indicators.



Fig.
11
.
Add a new relevant case
-
based knowledge to dedicate performance indicators


9

4. Discussion

The p
erformance management framework we proposed links both performance measurement
and knowledge management.
I
t
stressed that rather than unlimited knowledge,
case
-
based knowledge

which is relevant to performance indicator will contribute to the
enterprise

s
o
verall performance

with
less vain effort
.

The prototype we built demonstrates how an
employee

in an organization is guided by the
performance indicator to focus his work objectives, refers to historical

successful

empirical

by relevant
case
-
based knowledge
, and creates new case
-
based knowledge in the performance management system
to contribute performance and knowledge as well to the enterprise.

References

1.

Allee, V. (1997), “The knowledge evolution”, Butterworth
-
Heinemann.

2.

Camp,
R
.
C.

(1989), “Benchmarking:

The search for industry best practices that lead to superior performance”, Quality
Press.

3.

Davenport, T. H. & Prusak, L. (1998)
, “
Working knowledge
-
how organizations manage what they know”, Harvard
Business School Press.

4.

Drucker, P. F. (1954), “The Practic
e of Management”, New York: Harper & Brothers publishers.

5.

Drucker, P. F. (1998), “The coming of the new organization”, Harvard Business Review, January
-
February.

6.

Edvinsson, L. (1996), “Developing a Model for managing Intellectual Capital”, European Managem
ent Journal Vol. 14,
No. 4, pp. 356
-
364.

7.

Garvin, D. A. (1993), “Building a learning organization”, Harvard Business Review, July
-
August.

8.

Goldratt, D. M. (1990), “Theory of Constraints”, Cronton
-
on
-
the
-
Hudson, NY: North River Press.

9.

Kaplan, R. S. & Norton,

D.P. (1996), “Translating Strategy into Action
-
The Balanced Scorecard”, Harvard Business
School Press.

10.

Kerr
, R. (
1991)
, “
Knowledge
-
based Manufacturing

Management”,

Addison
-
Wesley.

11.

Nonaka, I. & Takeuchi, H. (1995), “The knowledge creation company”, New Yo
rk: Oxford University Press.

12.

Nonaka, I., Umemoto, K. and Senoo, D. (1996), “from Information Processing to Knowledge Creation: A Paradigm
Shift in Business Management”, Technology In Society, Vol. 18, No. 2, pp. 203
-
218.

13.

Senge, P. M. (1990), “The fifth d
iscipline

The art and practice of the learning organization”, Doubleday.