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Procurement Perspectives: The measurement of efficiency evaluating performance

Stephen Bauld
Procurement Perspectives: The measurement of efficiency evaluating performance

A comprehensive process of performance evaluation encourages all members of an organization to improve their efficiency.

The measurement of efficiency can be challenging in certain contexts. For instance, a police force that has a higher number of arrests per police officer is not necessarily more efficient than one that has less, nor is a fire department more efficient because it handles a higher number of fires per person per year.

For many types of organizations, prevention is as important, or is sometimes a more important goal to strive towards. The overall evaluation process goes beyond top-down dictation and control.

Equally important is determining whether the existing resources that have been committed to each aspect of operations are adequate. Even the best manager will fail if not supported by adequate resources.

Where insufficient resources have been provided, they should be strengthened to meet the identified need. Performance expectations also need to be critically evaluated. If too high, they must be adjusted to bring them into line with what the organization and its stakeholders can realistically expect.

To have any enduring benefit, evaluation must be linked to some process of improving performance.

Systematic review of operations allows the identification of best practices that can be exported to other parts of organizational operations.

It must also allow intelligence to be passed from one part of the organization to another. Evaluation can be used, as is typically the case in a bank internal auditing process, to confirm adherence to a prescribed procedure.

However, continuing improvement in efficiency is furthered where the evaluation process fosters innovation and effective solutions to problems encountered in implementing strategic objectives.

As well as ensuring compliance with organizational policy, and consistent effort to promote defined strategic goals, an equally important issue in evaluation should be to determine those innovations that work best.

As in the case of individual assessment, any process of organizational performance evaluation must be balanced and fair. It must have recognized any accomplishment as well as failure and record strength as well as weakness.

It must facilitate future planning, as well as measure the success of earlier initiatives. The ability to assess entails sizing people up; a manager must assess the extent to which an individual can be given responsibility, along with the type of responsibility this person can handle.

A manager must be able to assess the strengths and weakness of those who the staff deals within and outside the organization, to gauge how they will respond to pressure and interact with others and the effect that they will have upon them.

This is especially true in the world of procurement as interaction with suppliers and contractors is a significant part of the job.

A key aspect of performance evaluation is to examine critically the decision-making process, including the question of those who are involved in the decision-making. All managers require support.

Division within the supply chain command presents obvious danger to any purchasing department of most organizations. It is therefore understandable for purchasing managers to look for those who will provide them with support when selecting their advisers.

Unfortunately, such an approach raises the risk of sycophancy. An insecure manager will often reach out to anyone who is prepared to give vocal support, irrespective of whether that person is up to the job, or whether the support voiced is genuine.

Such reliance does not shore up the manager but merely worsens the existing problem.

Senior leadership must create sufficient confidence within an organization to ensure that all aspects of any decision are properly considered.

This cannot occur where the organization shivers under a cloud of fear.

Discipline must be carefully controlled so that it does not compromise communication. Where discipline is handed out, it must be necessary to correct mistakes, not to fix blame.

Stephen Bauld is a government procurement expert and can be reached at Some of his columns may contain excerpts from The Municipal Procurement Handbook published by Butterworths.

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