Posted at 10.28.2018
Every organisation strive for good performance. Performance improvement considers organisational change where management of the company puts in place some assignments to help raise the current degree of performance. In this value the programmes may completely change the company behaviour and conducts to permit the changes to have effect. Management aspires to increase the organisational efficiency and efficiency in providing its products and services.
As the problem of truth performance requires performance procedures to evaluate the financial and non financial results. Thereafter performance spaces and future improvement activities are prepared considering moral aspects. Most organisations use performance indications which serve as powerful method of keep an eye on and improve performance. Organisations use different methods and techniques they are suffering from to process changes for improvement purposes.
Most of men and women measure company's performance by looking at 'amount of money the business has just made'. They consider earnings, ROI, revenues to be the solution for performance. The main issue of considering only financial aspects of the business enterprise is that these measures report the past actions that the company may have no immediate control. Taking a good example of customer aspects, they are not directly covered under financial aspects. Concentrating only on financial aspects may over time jeopardise the company's relationship with the clients and may look because of their needs with the competitor company.
In view of the above a more detailed and clear methodology is needed that put equal weight and emphasis to both financial and non financial aspects. An approach that not only considers lagging signals but also appears onward and consider leading indicators. This prompted the researcher to consider using the Balanced scorecard platform in evaluating the performance of the neighborhood Authorities Pensions Account (LAPF) and recommend actions to enhance the current degree of performance.
The research topic explains by itself, and aims to learn the performance advancements that could be achieved when LAPF opts to put into action the BSC way. Thus this issue addresses two aspects; performance improvement and the Balanced Scorecard.
As it is mostly known, the BSC attacks the balance between your financial and non financial actions of performance. In short BSC is a framework used for evaluating business performance of any company. Kaplan and Norton consider BSC as ' Organisational performance management tool'. As will be assessed in Chapter two, ( section 2. 3) BSC consists of defining company objective, strategy and procedures. These should be clear and decided upon by the interested stakeholders. After the BSC is set management should make an effort to understand the factors that cause change and fluctuations of the BSC. These factors are incredibly important as will lead the organisation to totally understand where and when to spend to pay the performance spaces. The following diagram ( figure 1. 1) shows a straightforward healthy scorecard template. ( adopted from Kaplan and Norton, 1992. )
For each one of the four perspectives, proper goals that website link with the perspective and strategy are founded together with the relevant measures. For the starter like LAPF this simple framework is preferred to maximise the probabilities for successful execution. As the BSC is a continuing approach, management may later desire to adjust the objectives and procedures to reflect the current operating and monetary conditions.
Performance improvement is a continuing process. It can be regarded as a pattern. Consider the following diagram ( amount 2) with the explanations below.
Plan: The company needs to know very well what should be achieved and programs strategically. Strategies should be integrated and aligned with the corporate strategy. Management also should place the objectives and goals to attain the corporate strategy. The process also involves defining responsibilities and communication means, figuring out talented personnel to lead the execution process.
Execute: The procedure involves placing the plans into activities. This requires the execution of the prepared activities to attain the budgeted earnings and loss profile, forecasted balance sheet and cash flow statement. Normally the strategies are for a short while period covering one financial yr. Generally it is done in operational level. With this study the performance will be assessed considering 2009/10 plan budget.
Check ( measure): The company then actions the performance using the indicators already established. This calls for evaluating the realised performance with the budgeted plans. Without measuring the performance, the organisation will not know whether changes need be applied to reach the budgeted goals or even to change the goals for the year.
Act: At this stage, the company should think and choose new techniques may lead to improvement. Here changes are important but should be carefully considered if when integrated the results will be improvements. Brain storming takes place at this time. It is also from this stage where management should find out the root factors behind bad or unsatisfactory performance and recognizes hurdles to success. As will be explained in chapter three (section 2. 5) applying changes pose an issue to many managers. Hence, it is recommended a clear and organized process be adopted to make changes successful. Performance improvement needs changes. In another words, this is the 'improvement methodology' level where management can think of improvement methods such as BSC, Six Sigma, TQM, etc.
1. 2 SPONSOR COMPANY Account- THE NEIGHBORHOOD Authorities Pensions Fund( LAPF)
The Local Authorities Pensions Fund (LAPF) is a social security institution founded under the LAPF Work No 9 of 2006. This Action repealed the Local Authorities Provident Work No. 6 of 2000. The difference would be that the former Take action no 6 of 2000 was recommended limited to Defined Contribution Plan as the existing Function No. 9 of 2006 is designed for Defined Profit Plan. LAPF as one of the six social security organizations in Tanzania was founded with the aim of providing sociable security cover to the employees of the local government authorities, organizations and Institution managed by Local Regulators. As per the Tanzanian federal regulation each of these six schemes was founded by different legislation and includes a precise category of folks or sector. LAPF has more than 70, 000 associates each contributing (on a monthly basis) a complete of 20% of member's basic salary (an employee's basic salary), which the employer's share is 15% and 5% is contributed by the staff (member). In addition to the HQ (in Dodoma region) the Organization has five Zone Offices throughout the country covering 4 to 5 parts for each Zone.
Vision, To be one of the better provider of cultural security cover in Tanzania (LAPF Act)
Mission Statement, To provide public security benefits with related services to its customers. (LAPF Function). In summary, the following are the primary functions of the Finance:
Pay advantages to insured person
Improve benefits payable under the Act
Register persons required by the law to contribute to the Fund
Safeguard members contributions and other Fund's resources
Invest contributions in less risk and high earnings yielding investments
For years now LAPF uses financial steps in analyzing the success of the Account. As your competition in sociable security markets becomes an extreme and speedy development running a business, reliance on financial actions becomes questionable. This results to some of the financial methods to be inadequate and inefficient in assessing the Fund's performance from its procedures, e. g. how to assess customer satisfaction. Through the performance measurement system any Organisation gets a comprehensive view of how it is accomplishing. LAPF as a performance-driven and achievement-oriented in a competitive interpersonal security industry, must maintain a competent performance measurement system. The system is employed to observe the changes in overall performance. Thus, the researcher is designed to propose the utilization of BSC construction as the way that'll be applied in evaluating and bettering the performance of the Finance. LAPF may wish to take up the BSC system in calculating its performance to solve the condition of ineffective options of performance recently adopted. Thus at this initial stage the purpose of the study is never to put into practice the BSC approach.
Balanced Scorecard entails both financial and non financial performance actions. In 1990, BSC was set up by Robert Kaplan and David Norton to complement financial measures. The technique has become famous and generally adopted by some Organisations due to the benefits produced from its implementation. The application of only financial options to judge performance may not give a real picture how the Organisation performs. This prompted these Organisations to switch their strategies in examining their performance applying critical procedures (both financial and non financial) in each one of the four BSC perspectives. Thus balance scorecard helps management to understand a comprehensive picture of the business enterprise operations grouped into these four categories i. e. Financial, Customers, learning and growth, and inside process.
LAPF as the very first time individual of BSC must choose relevant performance steps for each and every of the aforementioned categories keeping in mind the type of its business. The adoption of BSC as a couple of measures will help management in formulating technique to achieve the Fund's aims. It is thought that BSC provides about management revolution and can provide real information in the procedures of the Finance as both financial and non financial performance steps will be employed in analyzing the success of its procedures.
The main objective of the study is to find means of improving LAPF performance. To achieve this, the researcher will adopt the Well-balanced Scorecard (BSC) framework to judge the performance of the neighborhood Authorities Pensions Fund (LAPF). The performance will be assessed in each of the four BSC perspective i. e. financial, customers (people), interior process, and Learning & development. In this respect the researcher will compare the expected organized performance (as per the LAPF coverage, budget etc) with the current performance as identified by employees and management (resulted from questionnaires and interviews). It should be noted that the researcher WILL NOT aim or arrange for BSC implementation. Other goals are as discussed below:
To assess the level of BSC understanding among employees
To build positive image of BSC in the sight of LAPF management and staff
To persuade the Company to look at the BSC approach
To propose a BSC framework relevant to the LAPF needs, aims and operations
To find out whether the Account has another different method for increasing the performance besides using BSC approach
Lay down foundations for even more research on enhancing performance dimension system.
What could possibly be the performance improvement by execution of the Balanced Scorecard(BSC)?The situation of Local Specialists Pensions Account in Tanzania (LAPF)
What is Performance Way of measuring?
How could it be improved?
What is Well balanced Scorecard?
How widely is Balanced Scorecard used?
What will be the benefits of using Balanced Scorecard?
What are the problems and /or challenges in implementing the BSC?
How to lessen the chances of BSC failing?
What will be the metrics for calculating performance?
Are there any other tools for improving performance dimension besides BSC?
How do they change from Amounts Scorecard?
How does LAPF evaluate its performance?
What does indeed LAPF understand about the BSC?
Is the approach known? From what extent?
Is the proposed BSC highly relevant to LAPF working environment?
Will the LAPF management accept changes?
How does indeed employees and management evaluate the current performance of the Account? (As per the proposed BSC construction)
What are the benefits likely to LAPF from the suggested approach?
What are the challenges along the way of bettering the Fund's performance?
What will be the efforts being followed to enhance the Fund's performance?
Any other choice besides the proposed approach?
Table 1 below is a suggested BSC construction for LAPF as created by the researcher. This platform stands as the main research area as it was used to judge the Fund's performance. The questionnaire and interview questions were based on this framework to determine what should be the degree of performance ( as organized by management), what is the current level, and what should be done to improve the current degree of performance. It is expected that the contents of the BSC ( goals and actions) may be fine-tuned after accommodating feedback from the LAPF management and personnel. This research does not cover implementation of the BSC, the decision on whether to totally implement the BSC strategy lays with the LAPF management, where the Fund must study and arrange for the implementation process.
Invest the efforts received in an extremely and secure produce investment ( Accurate financial commitment making)
-Return on Investment (ROI)
-Increase in premium
-Percent upsurge in Cash Flows
-Return on Assets
Effective cost reduction
-Percent reduction in cost
-Percent reduction in risk occurrence
-Percent of damage anticipated to risk
-Percent mistake in forecasts
Increase regular membership base
-Number of new people registered
-Frequency of people complaints
-Members Study rating
-Complaints response time
-Timeliness of service
Provide seminar and education to members
-Number of workshops conducted
Attract more people and sustain members
-Number of new members
-Increase in premium
Increase Benefits Packages
-Number of new packages
-Lead time (time taken to introduce new offer)
Marketing LAPF and its products and services
-Percent decrease in payment circuit time
Provide benefit package deal on time
-Claim control time
-Number of customer problems reported over an interval of time
-Percent decrease in rework
-Industry quality rating
Effective reporting/information system
-Average time for circulation information
- Percent of late reports
-Percent of problems in reports
Maintain inter departmental team work
-Number of days to speak feedback
-Information blood circulation time
Training to employees
-Training time per employee
-Number of employees trained
-Employee turnover rate
-Chances for empowerment and promotions
-Level of freedom of view and suggestions
-Percent of employees recommendations and recommendations put in action
-Percent of complains about salary and incentives
-Response period to employees complaints
-New products /service
- Opportunity level showing creativity
Team building and effectiveness
-Percentage of empathy level
-Percentage success of goals
Strategic map shows the cause-and-effect relationship. Making use of the four BSC perspectives, we are able to draw a cause -and -effect logic flow showing the relationship between them. In simple words it depicts the link that exists between your perspectives. It therefore outlines just what a company wants to perform (financially and to members) and how to accomplish it ( through effective and productive internal techniques, supported by experienced, encouraged and creative employees). Physique 1. 3 below shows an example of strategic map relevant to LAPF functions.
If LAPF employees lack bonuses to improve their morale to work, it adversely affects the time taken to process members boasts. In turn this brings customers complaints that cause delay in submitting efforts in time. The supreme effect of it is inadequate cash to operate, invest and pay other beneficiaries.
Incompetency employees make errors in producing the says that necessitate reworking the says. This increases the operating costs that decrease the cash flow position.
High employees morale, shorter repayment cycle time business lead to users satisfaction. Subsequently increases efforts that boost the cash flow.
Low morale, ignoring employees ideas and incompetent employees altogether lead to employees dissatisfaction. This may in turn lengthen the payment circuit time, which results to member's dissatisfaction. Eventually this leads to delay in efforts which by the end affect the Fund's cashflow.
Note: Figure 3 shows only some few measures as indicated in the well balanced scorecard. More actions can be added and a link with a reasoning flow be set up to show the cause and effect relationship between the BSC perspectives.
The research was conducted as per the LAPF's code of ethics. Participants were free, to control their own determination to participate, add or even to drawback. Where confidentiality and anonymity was demanded the analysis honored this and make sure no harm, pain or discomfort is triggered to any participant. Adherence of ethical issues in each stage of the research process from, data collection, examination and reporting is my priority consideration. The Fund will be briefed of the study findings.
This thesis consists of five chapters.
Chapter one: Includes general launch and this issue to be explored. It also has quick explanations of the ideas found in the key research subject, i. e. Performance improvement and the healthy scorecard.
Chapter two: Consists of all relevant books concerning the well-balanced scorecard, performance improvement, and change management which is very important to consider before commencing any programme to improve performance. I personally consider change management to be very critical and is inspired by several inner and external factors. From this section we will offer an possibility to understand periods that lead to successful changes. The normal flaws/errors done by the organisation when implementing changes ( which are the main causes of inability) as described by John Kotter, 1996 are also within this chapter. Moreover the chapter contains other performance management approaches beside the well-balanced scorecard and an assessment how they associate or differ with the BSC.
Chapter three: Comprises of methodological section. In a nutshell questionnaire and interview are the primary resources of data collection because of this research. Furthermore, it also includes sampling and respondents information.
Chapter four: Includes the results and debate thereof. In addition, it includes examination of data collected through questionnaire and interview.
Chapter five: Points out the conclusions and advice based on the info collected.
This study has the following limitations;
This research will not cover execution of the BSC in LAPF. It is limited to the utilization of the proposed BSC framework to evaluate LAPF performance, whereby the Fund's objectives and their related procedures are more specific. It is from the studies, conclusions and recommendations LAPF management may think and plan the implementation of this procedure.
The study is bound only to the neighborhood Authorities Pensions Fund scheduled to time and financial constraints. It generally does not cover every other organization in the cultural security industry in Tanzania, neither LAPF performance will be compared to preceding years' performance
The planned number of interviews to be conducted cannot be come to as the targeted personnel were out of the office for different reasons. In this respect the researcher made a decision to increase the variety of questionnaires to be provided from 30 to 40 in order to collect as much data as you can.
The indications and way of measuring tools in this review use extra data in measuring performance. Secondary data may have inaccuracies. Inaccuracies in data could result in results that are unreliable and unsuitable for measuring performance and in attaining targets.
Weights have not been placed on any particular dimension or goal area. LAPF priorities change with changing nationwide Sociable Security needs and it might be necessary to effectively place additional weights on some sizes to achieve the desired result.