A New Quantitative-Based Performance Management Framework for Service Operations

Abstract

Performance measurement system for individuals and teams is still qualitative and compliance oriented in many organizations. Therefore, most performance evaluations are considered overstated and unreliable by senior management. A new performance management method, discussed in this study, has been designed and developed in a service operation environment to measure and enhance the efficiency and effectiveness of employees and teams based on a new quantitative approach. In this data-driven approach, all work efforts are evaluated and converted to a comprehensive credit system, allowing aggregation of individual outcomes using a few metrics. All employees need to pass a minimum threshold to start earning benefits. Other key metrics, including quality and risk, can be added to the system to ensure that employees follow standards, restrictions, and other expectations. This model directly aligns performance-based payouts and rewards to performance outcomes, and therefore improves employees' efficiency and effectiveness. The model has been tested and implemented in several operational units of a large financial institution in North America with outstanding impacts and outcomes.