Use of Performance models

Hi @Daisy, I may indulge you in the various models that are examinable, but I think what’s more essential is for us to not fall into the trap of taking the model and doing the measurements immediately.

Alex Watt will ask you questions usually with the first requirement on discussing the appreciation of using a performance measurement model to help improve performance management by discussing its strengths and weaknesses, and then the second requirement on calculating the results using the model and interpret it.

This was what had happened to students in the Dec 2011 sitting, on Q2 Cod Electrical Motors, where on part(b) of the requirement asks for an explanation of how ‘performance pyramid’ can be used to achieve a strategy, but students jumped into doing calculations and lost 6 marks before noticing they should be calculating for part(c) of the requirement.

The same thing goes in Dec 2011, Q3 Bluefin school where the question gives a list of cluttered numbers, but never asked a model. Yet students were ultimately distracted to analyze the numbers eventhough the question never asked for any calculation, only realizing at the end of the day, they lost a total of 20 marks.

Apologies for going off-topic, but I realized a lot of us has and still stumble into this trap and I have to explicitly mention a preventive strategy against this. Back to the topic, here are a list of models that you should have awareness on:

1) Hope and Fraser’s Balanced Scorecard for CSFs
2) Lynch and Cross’ Performance Pyramid for classifying results according to levels of management
3) Fitzgerald and Moon’s Building Blocks Model to measure upstream and downstream determinants, standards and rewards
4) Ansoff’s growth and market size matrix, and how it can be used to reduce profit gap
5) Porter’s 5 Forces, Pestel, Porter’s Diamond and Porter’s Value Chain
6) VFM 3E’s model – Efficiency, Effectiveness and Economy
7) Six Sigma DMAIC model
8) Altman’s Z-score model and Argenti’s A-score model
9) Quality costs and how reducing it can improve performance
10) McKinsey 7S model
11) BCG matrix to analyse product/sub-division portfolio
12) SWOT model for strategic assessment
13) ABC budgeting
14) EVA and WACC, and its relevance to value-added management

In Alex Watt’s words: “Analysis is obviously much harder than identification, so do
not expect to score high marks simply by listing points without explaining”.

You will need to write in more instead of just giving out definitions. Note the weightage of the marks.