Improvements Towards the Identification and Quantification of Relationships Between Key Performance Indicators

Abstract

The quantitative relationships at the performance measurement system (QRPMS) is a methodology for identifying and quantifying relationships between key performance indicators. These relationships present additional information for decision-making purposes. QRPMS employs the Guttman-Kaiser criterion (K1) to complete a critical step during the methodology. This study presents evidence that the K1 criterion has limitations that compromise the reliability of QRPMS's results. An improved QRPMS version is developed, and the results of the existing and improved QRPMS are compared in a mining industry case study. It is shown that the improved QRPMS delivers more accurate and reliable results. OPSOMMING Die quantitative relationships at the performance measurement system (QRPMS) is 'n metodiek om verwantskappe tussen sleutel prestasie-aanwysers te identifiseer en te kwantifiseer. Hierdie verwantskappe bied addisionele inligting vir besluitnemingsdoeleindes. QRPMS maak gebruik van die Guttman-Kaiser kriterium (K1) vir die uitvoering van 'n kritieke stap gedurende die metodiek. Die studie lewer bewys dat die K1 kriterium beperkinge het, wat die betroubaarheid van QRPMS resultate beïnvloed. 'n Verbeterde QRPMS weergawe word ontwikkel, en die resultate van die bestaande en verbeterde QRPMS word vergelyk in 'n mynbouindustrie gevallestudie. Die meer akkurate en betroubare resultate van die verbeterde QRPMS word geïllustreer.

Performance Management and the Integrated Development Plan of the Msunduzi Municipality in South Africa

“…PM in South African municipalities is poorly understood (Jooste and Botha 2018), which has resulted in the ineff ective implementation of performance systems (Magoro 2016). Th is is further impeded by incompetent management and poor leadership with regards to PM (Manyaka and Sebola 2015;Isaacs 2016).…”

“…Ideally, performance indicators ought to fl ow in a logical manner from level to level in an organisation as this will assist employees in aligning their actions with the organisation's plan (Parmenter 2012). In underperforming organisations there could be an inadequate understanding of how performance is accomplished, for example how performance indicators eff ect outcomes and each other (see Manyaka and Sebola 2015;Jooste and Botha 2018), or a lack of understanding of the relationship between the organisation's strategic goals and employees' activities. In the Makhuthamaga Local Municipality in the Province of Limpopo, South Africa, Magoro (2016) observed something similar.…”

“…He established that there were diff ering understandings amongst municipal employees of what PM was, and this negatively aff ected its implementation. Shrinivasan, Dasgupta, Desai and Nallacherry (2012) and Dasgupta, Shrinivasan, Nayak and Nallacherry (2013) cited in Jooste and Botha (2018) note that performance indicators are linked; hence improving one might impair another while in some cases, the eff ect of a performance indicator can be delayed.…”

Alignment and Identification of the Relationships between Key Performance Indicators in a Multilevel Tree Structure to Support Transportation Agency Decisions

“…PCA computes several principal component (PC) equivalents to the total number of variables (which, in this case, are the KPIs). A selection criterion methodsuch as Guttman-Kaiser, parallel analysis, or the scree plot-was proposed to determine the appropriate number of PCs for the analysis (14). After the number of PCs was determined, a multiple regression analysis was used to determine the dependence of the dependent variable on its predictors.…”