How Can We Accurately Measure Department Performance in a Large Engineering Firm?

Dear All,

My manager asked me a question and left me some time to answer it. If the answer is reasonable, the system shall be implemented in the whole company, and I shall be promoted. The question posed was, "How can we measure the performance of a whole department, knowing that such a department comprises excellent employees? What can we do to measure the overall outcome of the department?"

On my end, I have started to read and conduct some research on the question, but I am unsure where to begin.

The company I work for is an engineering company, and the total number of employees is around 2700 persons, including both engineering and administrative personnel.

Thank you in advance for helping me.

Best regards,
Jano

Dear Jano,

How do you determine that employees are excellent? Do you have a system in place to measure their work? If not, begin by defining their Key Result Areas (KRA) and Key Performance Indicators (KPIs). When KRAs and KPIs are well-structured and communicated to all employees, their performance can be effectively evaluated.

It is essential to grasp the basic principles of performance management. Each individual should have specific deliverables set by the management, aligned with the organization's goals for a defined period. These deliverables and goals need to be Specific, Measurable, Achievable, Relevant, and Time-bound (SMART).

Establish performance parameters based on these deliverables. These parameters must be quantifiable, typically in numerical terms, to enable accurate measurement (percentage figures can also be utilized).

I hope this information proves helpful to you.

Hi Jano,

For measuring the performance of the department as a whole, you need to evaluate individual performance.

I guess your company might already have some kind of performance rating system in place. Firstly, try to find out the loopholes/issues with that system. The next thing would be to understand the job profile of every employee and his reporting relationship. For example, a particular designation is responsible for price negotiation with the vendors and releasing the order for the purchase of any product.

In this case, there should be a clear understanding that even after the price negotiation, does that particular designation have the rights to finalize that vendor or does he have to send it to a higher authority for approval and then release the check? In this case, the single designation has to coordinate with three verticals: his senior, the vendor, and the accounts for releasing the check. If any of these will delay, then ultimately, he will not be able to deliver his job on time. So when you draft the KRA, give the weightage accordingly.

Now consolidate it department-wise, but when you calculate it for the department as a whole, then 60%-70% weightage should be for the Senior management employees' performance in that department, and the rest will be of the middle management and lower-level employees.

Keep these two things in mind and then draft. It’s a very lengthy process.

Regards,

Lakshmi

Dear Jano,

Other members have already informed you that you should go ahead. I would like to add a few points.

Identify the internal customers of each department and measure the index of satisfaction. The second thing you can do is to identify the KPIs for every department. Based on the KPIs, you can devise the KRAs to help departments attain their goals.

Ok...

Dinesh V Divekar

[dineshdivekar@yahoo.com]

"Limit of your words is the limit of your world"

Thank you all for the great help. I shall be introducing the whole document within 2 weeks. Do you allow me to review it with you before then? Best regards to all.