BUSINESS

RELATIONSHIPS
Session 6 : Key Performance Indicators
Establish and maintain business relationships SITXMGT501

Review from last week

2

Last week we discussed:

Organisational Culture
Benefits of Organisational Culture
Considerations we should make
Types of Organisational Culture
Linked with planning of your Negotiation
Any questions?

Homework from last week

3

Last week you were asked to:

Continue planning your Assessment 2

Complete Activity 3: Organisational Culture

Please submit now

Introduction
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Last week we discussed Organisational Culture

and its impact and influence on negotiations. After
considering this, you need to consider the finer
details and what outcomes you want from you
negotiations.
Today we will discuss, KPIs, Key Performance
Indicators which you must consider during your
planning stage.

Key Performance Indicators

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What is meant by the term KPI?

Why must we consider these before
negotiating?
What should we include?

Key Performance Indicators A definition

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Key Performance Indicators refers to:

A set of quantifiable measures that a
company or industry uses to gauge or
compare performance in terms of meeting
their strategic and operational goals..

Key Performance Indicators An example

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A company must establish its strategic and

operational goals and then choose the KPIs which
best reflect those goals.
For example:
If a Hotel chains goal is to have the fastest growth
in its industry, its main performance indicator may
be the measure of revenue growth year-on-year.

Where do we begin?
8

When we talk about business planning and setting

objectives we need to think at two levels:

What to do or get done, the steps to take

What is to be achieved, the final outcome

So how does this relate to your Planning of your

Negotiation?

Key Performance Indicators The basics

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Tasks

Objectives

Procedures

Outcomes

Process

Achievements

Jobs Activities

Measures Milestones

Means

Ends

KPIs The basics as an example

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Examples

Student

What to do

How this is measured

Apply

Date/form/send to..

Accepted

Selection Criteria, Formal letter, time and place

Enrol

Fill Out/Pay/Supply details/Student card

Attend

Class/time/location/time span

Do the work

Read/discuss/present/write/make/fix/show/amend

Submit assessment

Form/time/place/signature

Perform practical tasks

Place/time/dress/equipment/procedures/technology
Cook/set up/pour/taste/clear/measure

Assessed as competent

Yes/No, or attain a score that satisfies

Graduate

Apply/dress up/walk on/receive certificate

What KPIs should you have?

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How can you measure?

What do you measure?

Now think about your assessment scenario?

Measuring Key Performance Indicators

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You can measure a KPI by:

Figures, statistics and spread sheets
Evidence of physical objects and/or products
Records and papers
Observation
Talk, Listen, Ask, Explain
Written reports and documents

Measuring Key Performance Indicators

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You can measure a KPI in terms of:

Quality
Quantity
Cost
Timeframes
Efficiency
Compliance with a standard, procedure or
requirement
Creativity
Personal qualities

KPIs A Restaurant example

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Example

Restaurant

Preparation

Food, seating and tables, staff, cash float

Open

Table settings, menus

Greet and seat

Timeframe, waiting time

Service

Communication skills, language, problem solving, politeness

Selling

Explain products, up-sell specials, encourage return visit

Payment/revenues

Use technology, check credit card details, approval , signature

Health and safety

Food, chemicals, spills, lifting, work breaks

Staffing levels

Roster, classification, sign on, casuals, supervision

Inventory purchases

Check deliveries, documents, use-by dates, stock rotation

Accounting-Taxation

Legal and accounting records for cash, GST, wages

Maintenance

Programmed and ad-hoc

RSA

Hours, location of selling, under age, intoxicated patrons

What can we measure with a KPI?

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Front Office

Room Service

Function Room

Bar/Tavern

Back to your Planning

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For your practical negotiation, you will consider

and identify your goals and outcomes. You
therefore need to consider how you will measure
the outcome of your negotiation to discover if you
are successful or not.
Your KPIs will let you know the result of your
Practical Negotiation but also your success in this
unit!

What do you have to do?

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Firstly, identify clear goals and objectives of your

negotiations. From these, identify how you can
measure their success after the negotiation.
Show as much detail as you can so that it will be
clear;
when
where
how
to what level
and within what tolerance

KPIs A SMART Approach

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When you begin to develop your KPIs, it is

important that they are SMART.
SMART stands for:
SPECIFIC
MEASURABLE
ACHIEVABLE
RELEVANT
TIMELY

KPIs SPECIFIC
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Clearly explains to employees what they have to

do (their performance) to be successful
Distinguishes between effective and ineffective
performance
Focuses on the behaviour itself, rather than
personality attributes such as 'attitude to
customers'
Terms such as 'work quality or 'job knowledge'
are too vague to be of use

KPIs MEASURABLE
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Based on behaviour that can be observed and

documented
Must be job-related
Managers must also provide employees with
ongoing feedback on their standard of
performance

KPIs ACHIEVABLE
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KPIs must be seen by all that they are

achievable.
The KPI must be realistically achievable.
If it is set too high for the circumstances (such
as an ambitious production target), not only will
it be irrelevant but it will ensure failure.

KPIs RELEVANT
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It is essential that employees:

clearly understand the KPIs
that they have the same meaning to everyone
concerned
proper consultation occurs as it is more likely to
result in standards that are relevant and valid

KPIs TIMELY
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KPIs should have an appropriate time frame

It should be possible to collect the relevant
information either 'as it happens' or within a
short time afterwards, otherwise it will lose its
relevance.

Comment on these KPIs

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Build environmental sustainability into each

business activity
Implement new brand standard before financial
year end
Host a minimum of one guest speaker per
semester
Industry client stakeholder satisfaction rating
exceed 90%

Homework
25

Please complete the following homework:

Continue planning your Assessment 2

Next class
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Thank you for listening. Any questions?

Our next class we will discuss and experience

The Wedding Planner.