Measurement and improvement of organisational performance using model of performance analysis

Abstract

Organisational performance is strongly dependent on four important parameters namely human capital, finance, facilities and good management practices. Measurement and assessment of organisational performance is crucial as this will assist in the management of human capital in the organisation. The aim of the study is to develop an assessment system that will be able to measure organisational performance. The system will integrate human capital variables namely competency, teamwork and leadership, and enhance their alignment to improve the overall performance of an organisation. The objective of the research is to develop a model of performance analysis based on human capital parameters in a way it can be organised and systematised to enable the assessment or prediction of organisational performance. The model was calibrated using iteration processes with the set of Key Performance Indicators (KPIs) to determine the desired values of the input variables. The capability of the model to predict organisational performance was determined by comparing the calculated values against the actual performance. Seven organisations were selected based on their similar core business representing each geographical location throughout Malaysia that is the Northern, Eastern, Middle and Southern regions of the Peninsular Malaysia, and Sabah and Sarawak of East Malaysia. Matrix analysis and triangulation methods were used to determine the validity of the findings. A comparative analysis was carried out for the seven selected organisations. Internal and external questionnaire analysis were done and the results were triangulated with Customer Satisfaction Index (CSI) as checkpoint. Research validation tests were carried at another two organisations and results showed that the model of performance analysis developed in this study was able to predict the performance of the two selected organisations with errors less than 10%. The outcome of the study will enable proper and systematic management of organisational performance.