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Top five aspects of an effective quality management system – #2 Performance management

In the first of this series of blogs, we looked at the importance of management and leadership in the success of a quality management system and here we explore the key role performance management plays.

In the world of quality management systems, performance management describes the need to determine, monitor and measure the outputs of your management system but what exactly does that mean? Although there are some elements the ISO 9001:2015 standard requires, it doesn’t prescribe to you exactly what, how or when to measure, it requires you to establish what’s important to you as a business, and what will give you a good indication of progress towards success and will provide you with data on which to base improvements.

So, whilst there is a framework within the standard, the emphasis is on you as an organisation to determine exactly what, how or when to measure ,and below we provide you some top tips on how to ensure performance management supports your QMS.

Quality management system

What to measure?

The first step to getting performance management right is understanding exactly what to measure. Clause 9.1.3 of the standard requires you to analyse data and information to evaluate:

  • The conformity of your products and services
  • The degree of customer satisfaction
  • The performance and effectiveness of your QMS
  • Whether planning has been implemented effectively
  • The effectiveness of actions taken to address risks and opportunities
  • The performance of external providers
  • The need for improvements to the QMS.

So as a starter for ten, the above must be covered by the design of your QMS: however, they are certainly not intended to be, and in fact shouldn’t be, an exhaustive list. The ‘what’ should be intrinsically linked to your company objectives, after all, these objectives have been identified as critical to success and achieving them should be the focus of the organisation.

Organisations often monitor the things they already measure because that’s the data they have, but that does not necessarily mean it’s the right thing. Ask yourself this question: if the data starts to fall outside the targets we have set, will we actually do anything to resolve the issue? If the answer is no, then the data you’re gathering can’t be linked to anything critical. Make sure the information you monitor will actually lead to positive action if it starts to fail.

It is also important to focus on ‘the vital few’ when selecting what to measure and monitor. Too many organisations suffer from information overload, finding themselves bogged down in data without a clear understanding what to do with it all.

How to measure?

The ‘how’ may seem the most obvious of the steps to many organisations, but ensuring that the information you monitor is providing you with a real indication of specific performance can be a tricky process.

The 2015 standard goes beyond what was required by the 2008 standard. It requires that not only is performance data analysed but part of that must be performance trends. That is to say that performance must be viewed over a period of time and not just at a single point in time.

It has become increasingly important, then, to identify the links between performance data sets, and understand those interrelations so that trends can be interpreted and acted upon appropriately. For instance, monitoring resource utilisation alongside revenue may show that utilisation becomes less efficient the busier the organisation becomes, and as such, a review is needed over the way resource planning is managed, especially if there are strategic plans to grow through increased workload.

Understanding metrics that may fluctuate seasonally or cyclically is also an important factor to consider when looking at how to measure and monitor. Introducing rolling statistics can be a useful way to remove the effects of fluctuations and provide you with a true trend analysis.

Utilising visual displays and dashboards for data can make a huge impact on an organisation’s ability to analyse data effectively and should be implemented for key performance data.

Dashboard

When?

When and how often you measure and analyse data is all about balance. It isn’t a one size fits all approach, and each individual metric must be reviewed on its own merit. The context of the organisation plays a key role in determining the appropriate time frames; for instance, an insurance company may not need to check its customer satisfaction levels on a monthly basis as it has very few interactions with its customers over the course of a year. It may only check at the end of the cover period, whereas a manufacturing company producing regular supply to the same customers may issue a survey on a monthly basis.

You must also ensure you don’t over-analyse data. Levels of order intake may vary on a month by month basis but level out each quarter, so it may be inappropriate to monitor on a monthly basis as this would simply create unnecessary reactions.

In keeping with ISO’s risk-based approach to the QMS, it’s also appropriate to determine the frequency of monitoring by the risk each metric poses to business success. The higher the risk, the more frequently the metric should be measured, and a preference for leading indicators rather than lagging ones should be employed.

Performance measurement

Our team of experienced consultants work with companies across a number of industry sectors to not only implement quality management systems but help ensure they are designed to deliver sustainable continuous improvement and business growth and can help you develop, define and implement systems for your performance monitoring. Call us today to see how we can support you.

Keep an eye out for the next in this series of blogs – #3 Risk-based thinking

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