C17 F5 Futher Performance Management
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Mazni HanisahC17 F5 Futher Performance Management
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Mazni Hanisah2 Bus Co is a large bus operator, operating long-distance bus services across the country.
y. There are two other national
operators in the country. Bus Co’s mission is to ‘be the market leader in long-distance transport providing a greener,
cleaner service for passengers nationwide’. Last month, an independent survey of 40,000 passengers was carried
out, the results of which are shown in the table below:
Table: Bus passenger satisfaction % by national operator
Operator Overall satisfaction Value for money Punctuality Journey time
Bus * 67 80 82
Prime * 58 76 83
Express * 67 76 89
* denotes that the percentage has not yet been calculated.
The ‘overall satisfaction’ percentages, which have not yet been inserted into the table, are calculated using a weighted
average which reflects the importance customers place on each of the other three criteria above. The weightings used are
as follows:
Value for money 40%
Punctuality 32%
Journey time 28%
The managing director (MD) of Bus Co has said: ‘Independent research has shown that our customers are the most
satisfied of any national bus operator. We are now leading the way on what matters most to customers – value for money
and punctuality.’
Required:
(a) Calculate the ‘overall satisfaction’ percentage for each operator. (2 marks)
(b) Taking into account all the data in the table and your calculations from part (a), discuss whether the
managing director’s statement is true. (4 marks)
(c) When measuring performance using a ‘value for money’ approach, the criteria of economy, efficiency and
effectiveness can be used.
Required:
Briefly define ‘efficiency’ and ‘effectiveness’ and suggest one performance measure for EACH, which would
help Bus Co assess the efficiency and effectiveness of the service it provides. (4 marks)
(10 marks)
3 [P.T.O
.
Section B – TWO questions ONLY to be attempted
2 Beeshire Local Authority (BLA) is a local government body which provides a range of services for the area of Beeshire
within the country of Seeland. Beeshire is a wealthy area within the country with many tourist attractions. One
of BLA’s tasks is to ensure that waste is collected from the homes and businesses in Beeshire. The goal for BLA’s waste
management department is ‘to maintain Beeshire as a safe, clean and environmentally friendly place where people and
businesses want to both stay in and return to.’ The need for waste collection is linked to public health concerns, the desire
to keep the streets clean and attractive and the desire to increase the amount of rubbish which is recycled. BLA is funded
through a single local tax and does not charge its residents or businesses separately for most of its services,
including waste collection. There is no public or political appetite for outsourcing services such as waste
management.
Waste collection is performed by the workforce using a fleet of vehicles. The waste is either taken to recycling plants or
else to landfill sites for burying. BLA obtains revenues from all the recycled waste but this only just covers the cost of
running the recycling facilities.
Against a background estimate that waste will increase by 1% p.a. in the future, the national government has ordered local
authorities, such as BLA, to promote the recycling of waste and has set a target of 40% of all waste to be recycled by
2015. In order to discourage the creation of non-recyclable waste, the government has imposed a levy per tonne of waste
buried in landfill sites and has stated that this levy will rise over the next five years in order to encourage continuing
improvement in the amount of recycled waste.
Currently, Seeland is in a long recession and so local authority revenues have fallen as tax revenues reflect the poor state
of the economy. Along with other local authorities, BLA has tried to cut costs and so has focused on financial measures of
performance. In a recent, private meeting, the chief executive of BLA was heard to say ‘keep costs under control and we
will worry about quality of service only when complaint levels build to an unacceptable level.’ As one of the area’s largest
employers, cutting staff numbers has been very difficult for BLA due to the impact on the local economy and the reaction
of the residents.
The current performance indicators used at BLA are drawn from the existing information systems with national figures
given for comparison. Those relating to waste collection for the year ending 31 March 2014 are:
BLA National
total
Total cost ($m) 250 2,850
Volume of waste
landfilled (tonnes) 1,250,000 13,750,000
recycled (tonnes) 950,000 9,500,000
total (tonnes) 2,200,000 23,250,000
No. of staff 3,500 39,900
Staff cost ($m) 110 1,190
No. of households 2,380,952 26,190,476
No. of complaints about waste uncollected 18,250 200,750
BLA National
average
Frequency of waste collections (days) 14 12
Notes on BLA data:
1. Cost data and no. of households comes from BLA’s financial systems.
2. Waste data comes from weighing lorries at the landfill sites and recycling facilities.
3. Staff data is collected from BLA’s HR system.
4. Complaints data is based on numbers of letters and phone calls to the waste management department.
5. Frequency of collection data is obtained from the department’s vehicle schedules.
6
Required:
(a) Explain why non-financial indicators are particularly useful for public sector organisations, illustrating your
answer with brief examples relevant to BLA. (6 marks)
(b) Explain how the value for money provision of waste services by BLA should be assessed by suggesting and
calculating justified performance indicators using the information in the scenario. (12 marks)
(c) Discuss the difficulties of measuring qualitative factors of performance, suggesting appropriate solutions for
BLA. (7 marks)
(25 marks)