A COMPARATIVE STUDY ON CRITERIA OF PERFORMANCE MANAGEMENT IN MALAYSIAN HEALTHCARE

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1 A COMPARATIVE STUDY ON CRITERIA OF PERFORMANCE MANAGEMENT IN MALAYSIAN HEALTHCARE Mohd Khairolden Ghani 1, Zuhairi Abd Hamid 1, Syahrul Nizam Kamaruzzaman 2, Zairul Nisham Musa 2, Ihfasuziella Ibrahim 1 1 Construction Research Institute of Malaysia (CREAM) 2 Faculty of Built Environment, University of Malaya khairolden@cidb.gov.my, zuhairi@cidb.gov.my, syahrulnizam@um.edu.my, zairul@um.edu.my, ihfasuziella@cidb.gov.my ABSTRACT Facilities Management or better known as FM is often viewed as a support services for an organization in running their business. FM is relatively new in Malaysia, perhaps it still at the infancy stage. Presently, the adoption and practice FM in Malaysia is predominantly focused on multinational company (MNCs) and also little bit on the government side. The issue of efficiency, productivity and professionalism in the construction industry can be achieved through the adoption of best practice. Facilities in healthcare especially hard fm are very important to be considered in fm. It is found that mechanical and electrical services maintenance had contributed major percentage to the performance management. Through performance management, requirement and solution will be presented to the clients in an easy manner. This study focuses on criteria of performance management within the meaning and understanding from various researchers of performance management, and recommends the best methods for Malaysian healthcare. The purpose of this study was to identify the criteria of performance management in Malaysian healthcare based on FM perspective, that underestimated by most people. The mechanism used to analyze the definition of performance management. From the analysis of the facility management definition, criteria of performance management were highlight from various researchers. Then, the criteria will be used as components to develop a strategic performance management for hard FM in Malaysian healthcare. Noted that the performance management in healthcare are very important and therefore, performance management in facilities management have to be the main agenda and need to be managed efficiently. Keywords: Performance management, criteria, facilities management, hard FM and healthcare

2 INTRODUCTION Facilities Management (FM) has emerged as buzz word in construction industry today. (Atkin and Brooks, 2009) regarded FM has been traditionally old-fashioned activities such as cleaning, repairs and maintenance. Since the beginning of twenty-first century, FM as gradually be recognized by property fraternity as a cost-centre that can contribute to the performance of organization which requires effective management (Lavy and Shohet, 2009). The evolvement of FM the most of the part in the world is growing fast but in Malaysia still at the infancy stage. It was started back in 1990 but however, most of the people feel that FM is just maintenance per se. People especially in the construction business fraternity still opine that FM is more on maintenance and not thinking of beyond that boundary. Dealing with facilities needs to ensure the quality, maintenance and performance has to be taken care of. In order to maintain the facilities, one should look into the performance of facilities itself. A good performance system has brought maintenance function into the limelight (Muchiri et al., 2010). The need for management applies in a FM context as a subset general management is performance measurement (Amaratunga and Baldry, 2002). (Egan, 1998) recognized the need for construction and facility managers to closely work as part of integrated team to reduce the cost of maintenance. According to Ruslan (2007) the key issue currently plaguing FM in Malaysia is low service quality and performance. According to CREAM (2011), it was found that performance measurement in FM context in Malaysia have been divided into six components namely fire protection and maintenance, mechanical services maintenance, electrical services maintenance, asset life cycle management, management policy and administration and cleaning services. It is found that mechanical and electrical services maintenance had contributed major percentage to the performance management. Through performance management, requirement and solution will be presented to the clients in an easy manner. RELATED WORKS Definition and Scope of Performance Management Performance management is a strategic tool used in measuring effective organization. The success of organization is relying solely on clear performance management process (NovaScotia, 2012). It is also supported by (Ana-Maria et al., 2009) that performance management plays pertinent roles in managing team and individual to achieve organizational objective. Performance management definition made by (Ana-Maria et al.,2009) is a strategic and integrated approach for sustainable organization in improving the performance of the team and individual. (Hay Group, 2008) also define performance management is about improving team and individual performance through strategy

3 process that links people and jobs. They also outline performance is a shared understanding process of what to be achieved, managing people process and also a process to ensure the most effective ways of people do the process. (Eckerson, 2009) define performance management is a discipline that aligns performance with strategy. Performance management relates with information technology in order to monitor the execution of business. (Amaratunga and Baldry, 2001) defines performance measurement is a mechanism to evaluate trends in facilities from the past. Through the collection, interpretation and analysis of information will give the key to better planning and design for the future. Perspectives of Performance Management for FM in Healthcare Managing performance has become important to support management and practice within FM organization. Performance has contribute lot to the FM in organization in many ways including strategy, culture, control of resources, service delivery, supply chain management and change management (Amaratunga and Baldry, 2002). According to KPMG (2010), a performance management framework would consist of interlinked processes, system, tools used for arranging knowledgeable people to drive the strategy. The framework will only be succeed when individuals transforms their decisions in line with strategy. KPMG (2010) through their research found that a strategy must be agreed upon by all. If agreed strategy does not exist, an effective balanced scorecard will not be developed further. In order to translate strategy and corporate mission to be realized, a coherent set of measurement need to be developed. The measure is to drive people with skills and capability to align with core values in organization. To achieve this, the organization should establish business planning and budgeting as part of the performance process with good reporting and efficient information system. Criteria in Performance Management Tucker and Pitt (2009) in their study have adopted ranking system in assessing performance customer feedback; Efficiency of service delivery Criticality to business operation Service provision (in-house/outsourced) Table 1 FM Customer Benchmarks- Service Ranking

4 (Source: Tucker and Pitt, 2009) In analyzing the Table 1 above, the mechanical and electrical engineering (M&E) services rated as most critical but reciprocally rated as least in terms of efficiency. While, other hard services such as building fabric and waste management are rated least critical as compared to M&E engineering. These two components of hard services also rated least in terms of quality and efficiency (Tucker and Pitt, 2009). The assumption could be made from these findings. Firstly, customers are always put the soft services or known as front line as most importance and the most quality job done by FM. It will give the good image and reputation of such organization in business. (Bassioni et al., 2005) through their study had outlined seven (7) driving factors in performance measurement framework. The identified criteria are; I. Leadership II. Stakeholders focus customer and other stakeholders III. IV. Strategic management Function and programme management-people, partners, suppliers, physical resources, intellectual capital and risk management V. Process management VI. Information and analysis VII. Work culture The commonly used measured in maintenance performance has divided into three (3) categories based on their focus. The categories are measures for equipment performance, cost performance and process performance (Campbell, 1995). (Boussabaine and Kirkham, 2006) have advocates that one of the component to consider in utilizing capital resources is cost structure of hospital facilities management (FM). The benefits of cost efficiency not only impart to organizations services, facilities and activities but to the improvements of whole life cycle costs. (Kennerley and Neely, 2002) in other views highlighted performance measurement system should have four main criteria in organization i.e effective processes, skills and human resources, appropriate culture and flexible system. (Harris et al., 2007) had highlighted some of the issues concerns with the link between human resource management (HRM) and performance. The implication of human resource would also play significant impact in terms of relationship between human resource practices, policies systems and performance. The HRM practices would certainly contribute to performance by motivating employees to adopt desired attitudes and behaviours to enhance organizational performance. (Taticchi and Balachandran, 2008) have developed performance measurement and management (PMM) in the organization. This system constitutes the baseline for effective and implementable design for integration. The interrelationship of that comprise five system used;

5 a) Performance system b) Cost system c) Capability evaluation system d) Benchmarking system and; e) Planning system (Silva and Ferreira, 2010) had found that in their study of public healthcare services (PHS) in Portugal, the strategic control process is critical. The level of strategic process shows the significant flaws in terms of communication between parent institution, Health Sub Region (HSR) and PHS. This problems if not control would lead to the motivational of staff, poor information flow mechanisms and low level of accountability. In the scope of facilities, the cost is always the main criteria need to be considered. The assessment made is only focus to the competitiveness of procurement rather than the cost effectiveness. (Williams, 1996) found that cost effectiveness of facilities can control the process of service delivery. Three financial control facets are critical in order to achieve costeffective facilities. Three facets are budgetary control; value engineering and competitiveness procurement are shown in the figure below. He also stressed the measurement of facilities should relate with three main components namely physical, functional and financial. Physical performance relates to the behavior of buildings such as structural integrity, heating. Functional performance relates to the buildings occupier such as space, layout and ergonomics while financial performance will touch on capital expenditures, depreciation and the efficiency of the money spent. Figure 1 Three Facets of Financial Control Interrelationship (Source: Williams, 1996) Figure 1 below made up of success in service performance really lie on the customer satisfaction. Once the customer satisfied, it will add value to the quality and will become more perfect match in service performance. The cost factors will give the value of money in terms of cost per patient and thus all these factors will reduce operating costs tremendously across its core and non-core activities (Tranfield and Akhlaghi, 1995).

6 Figure2 Mutual Gains and Guarantee to Meet Service Performance (Source: Tranfield and Akhlaghi (1995) American National Standard (2012), Feedback is an essential feature of all stages of the performance review process. During the performance planning process, both behavioural and results expectations should have been set. Performance in both of these areas should be discussed and feedback provided on an ongoing basis throughout the performance evaluation and rating processes. In addition to providing feedback whenever exceptional or ineffective performance is observed, providing periodic feedback about day-to-day accomplishments and contributions is recommended. For the feedback process to work well, it should be a twoway communication process that is the joint responsibility of both managers and employees. This method requires training both managers and employees about their responsibilities in the performance feedback process. Effective feedback should be timely, constructive, specific and balanced, and should include both positive and development information based on what the employee did or did not do in terms of his or her behaviour. It is critical that feedback be based on behaviours rather than on personal characteristics and that these behaviours are linked to effective versus ineffective performance. However, according to (Azlan Shah Ali et al., 2010), there are 5 criteria s need to be highlighted such as time schedule performance, cost, quality performance, functionality technical performance and communication among parties. (Purbey et al., 2006) stated, the performance measurement parameters can be categorized into following three categories: 1) Efficiency 2) Effectiveness 3) Flexibility. Efficiency measure deals with the success with which hospital management uses its funds or resources to produce outputs or outcomes.

7 Efficiency measurement consists of following sub-indicators such as resource utilization and cost reduction. The second dimension is effectiveness. The review of literatures indicates that effectiveness will include dimensions like customer satisfaction, quality of service etc.effectiveness can be measured by measuring the following dimensions such as service quality, customer satisfaction, growth and safety.flexibility is a lead performance measure, which focuses on analyzing forward looking, predictive and future performance comparisons. This can measure a system s ability or the adaptability to respond to diversity or change. There are professional flexibility, instrument flexibility, process flexibility,volume flexibility,mix flexibility,expansion flexibility, and new service flexibility. METHODOLOGY The method used in this research is a comparison method. Data that will be produced is in the form of a matrix. The purpose of the comparison method used is to compare each of the criteria in performance management. It is based on each different researcher s opinion. Then, each of the same criteria will be matched with the same opinion with each other. The same criteria will be aggregated. Total criteria between 2-6 times the frequency range to be considered. Thus, the criteria will be used in this study to produce a model performance management in Malaysian healthcare. This is because, there are no performance management model in Malaysian healthcare until now. ANALYSIS

8 Table 2 Matrix comparison of performance management criteria Discussion of Result The table 2 shows that the thirteen criteria from twelve different researchers. Criteria will used to develop a model of performance management in Malaysian healthcare. Among the criteria taken into account is the Efficiency of Service, Process Management, Work Culture, Communication / feedback process, Physical Performance, Time Schedule Performance, Cost Performance, People-skills and Human Performance and Quality. According to Manchester metropolitan university 1998, Effective communication, regular review and constructive feedback are at the heart of good performance management systems. For Efficiency criteria of Service, four researchers have the same opinion of Tucker and Pitt 2009, the Campbell (1995), Purbey et al., (2006) and Kennerley and Neely (2002). For Process Management, there are 2 servings researchers have the same opinion of Harris et al., (2007) and Bassioni et al., (2005). Then, the criteria of Communication / feedback process, researchers are unanimous is Silva and Ferreira (2010) and Shah Ali A et al., (2010), while the criteria are expressions of a work culture Kennerley and Neely (2002) and Bassioni et al., (2005). For physical performance, the researchers involved are Campbell (1995) and Williams (1996). For Cost Performance, researchers are unanimous is Campbell (1995), Boussabaine and Kirkham (2006), Silva and Ferreira (2010), Williams (1996), Taticchi and Balachandran (2008), and Shah Ali A et al., (2010). For the People-skills and human resources involved researchers are Kennerley and Neely (2002), Harris et al., (2007) and Azlan Shah Ali et al., (2010). For Quality Performance, the researchers involved are Taticchi and Balachandran (2008) and Azlan Shah Ali et al., (2010). Accordingly, there are nine criteria that are important in develop a model performance management in healthcare. All these criteria are used in the AHP method to produce a hierarchy of the most important criteria are given priority in producing the model in the context of performance management in Malaysian healthcare. According to Arash Ali Shahin and Mahbod (2006 ), Analytical Hierarchy Process or AHP is a very popular research process because it is based on the calculation of the weights and the solution of the problem where different with other research common tools. AHP process is easy to use for a variety of uses and stages. ( Saaty, 2001). The objective of this formula as a solution of problems and has been used in various fields and sectors ( Yang and Lee, 1997 ). AHP consider qualitative in research approach and combining into a single question in the context of an empirical basis. AHP uses a qualitative approach to restructure the hierarchy of problems to a more systematic solution. As for the quantitative aspect, pair - wise comparison approach is used to get the response and more consistent validity through questionnaires ( Yudiyanty, 2002).

9 Conclusion In conclusion, this study is to develop a strategic management model for hard fm performance in healthcare. Focus is given to hard fm because the problems are more focused on hard fm and the cost to operate is large compared to soft FM.Healthcare is considered as a very important institution for people and had been recognized providing medical care for people. FM in healthcare need to be given priority compared to other sectors because it s dealing with human life. The service delivery and performance in healthcare sector required most sophisticated approach compared with other organization. People would always express their views in media with regards to the quality services rendered by healthcare. The issue of service quality and performance are plaguing among the healthcare throughout the country over the years. Therefore, it stated clearly in healthcare s vision and mission is to provide a high top quality of services and keep improving customer satisfaction from time to time. According to Ruslan (2007) the key issue currently plaguing FM in Malaysia is low service quality and performance. Therefore, a strategic model of performance management for Malaysian healthcare project will be established to address these issues. A model will be detailed out pertinent consideration and key criteria of service level in determining the successful of FM performance management in healthcare. Thus, the findings serve as future research for develop a performance management framework in Malaysian healthcare through the measurement method known as performance management quality index (PMQI ). Reference Amaratunga, D. and Baldry, D. (2002a). Performance measurement in facilities management and its relationship with management theory and motivation, Journal Facilities Management, Volume 20, Number 10 pp Amaratunga, D. and Baldry, D. (2001). Facilities management issues in the public sector, PS Public Service.co.uk, 20 th April Ana-Maria, G., Constantin, B., and Catalina, R. (2009). The strategic performance management process, The Journal of the Faculty of Economics, University of Oredea, Issue 1, Volume 4, pp Arash Shahin & Ali Mahbod, M. (2006). Prioritization of Key Performance Indicators: An integration of analytical hierarchy process and goal setting. International Journal of Productivity and Performance Management, Vol.56 No. 3, Atkin, B. and Brooks, A. (2009).Total Facilities Management, 3rd Edition, Wiley- Blackwell Publishing Ltd.

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