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Facilities Assessment of facilities management performance in higher education properties Dilanthi AmaratungaDavid Baldry

Article information: To cite this document: Dilanthi AmaratungaDavid Baldry, (2000),"Assessment of facilities management performance in higher education properties", Facilities, Vol. 18 Iss 7/8 pp. 293 - 301 Permanent link to this document: http://dx.doi.org/10.1108/02632770010340681 Downloaded on: 19 June 2016, At: 05:58 (PT) References: this document contains references to 39 other documents. To copy this document: [email protected] The fulltext of this document has been downloaded 4666 times since 2006*

Users who downloaded this article also downloaded: (2000),"Assessment of facilities management performance – what next?", Facilities, Vol. 18 Iss 1/2 pp. 66-75 http:// dx.doi.org/10.1108/02632770010312187

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(2001),"Case study methodology as a means of theory building: performance measurement in facilities management organisations", Work Study, Vol. 50 Iss 3 pp. 95-105 http://dx.doi.org/10.1108/00438020110389227 (1994),"A Strategy for Facilities Management", Facilities, Vol. 12 Iss 11 pp. 6-10 http://dx.doi.org/10.1108/02632779410070200

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General facilities management principles and its performance assessment

Assessment of facilities management performance in higher education properties Dilanthi Amaratunga and David Baldry The authors

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Dilanthi Amaratunga is a Researcher and David Baldry is a Lecturer, both at the School of Construction and Property, both at Management at the University of Salford, UK. Keywords Facilities management, Higher education, Performance measurement Abstract In the general facilities management literature, it is assumed that there is a causal link between facilities management practices and performance. The role of facilities management in facilitating organisational performance, and thereby in providing competitive advantage, is widely acknowledged. However, the mechanisms of how this happens in higher educational establishments are quite unclear, prompting performance evaluation researchers to question whether performance evaluation in fact does add value, and enhance organisational performance. Assessment of performance of buildings of institutions delivering higher educational services has become a matter of particular interest to governments seeking to increase the effectiveness of educational provision and maximise value for money. This paper presents initial findings of the characteristics of important aspects of a performance evaluation approach related to higher education properties, and discusses the development of a framework based on the balanced scorecard to measure performance relating to higher education establishments. Electronic access The research register for this journal is available at http://www.mcbup.com/research_registers/jpif.asp The current issue and full text archive of this journal is available at http://www.emerald-library.com

Facilities Volume 18 . Number 7/8 . 2000 . pp. 293±301 # MCB University Press . ISSN 0263-2772

Facilities management (FM) is based on the premiss that the efficiency of any organisation is linked to the physical environment in which it operates and that the environment can be improved to increase efficiency (Grimshaw and Keeffe, 1993). Becker (1990) suggests: ``FM is responsible for co-ordinating all efforts related to planning, designing, and managing buildings and their systems, equipment and furniture to enhance the organisation's ability to compete successfully in a rapidly changing world''. The aim of FM should be not just to optimise running costs of buildings, but to raise efficiency of the management of space and related assets for people and processes, in order that the mission and goals of the organisation may be achieved at the best combination of efficiency and cost (Spedding and Holmes, 1994). The review of literature suggests that the key components that impact on FM implementation are a synergistic blend of ``hard'' and ``soft'' issues. This concept therefore comprises both production oriented and user relations oriented elements (Varcoe 1992). This perspective is exemplified by the work of Becker (1990), Williams (1996) and Douglas (1996). Further, literature reveals that FM encompasses a vast spectrum of perspectives about people, organisations and change processes to realise the value of any organisation. These practices are generally consistent with the ideas and techniques originally articulated by Nutt (1992) and Then and Akhlaghi (1992). By grouping similar requirements postulated in the literature, Barrett (1992) classifies all these into three separate categories. Thompson (1990) also provides a meaningful taxonomy for classifying FM attributes. Performance, in business terms, means the manner or quality of functioning (BW Associates, 1994). It thus relates to a building's ability to contribute to fulfilling the functions of its intended use (Williams, 1993). Facilities represent a substantial percentage of most organisations' assets and their operating costs; thus it is hardly The authors are grateful to the Royal Institution of Chartered Surveyors Education Trust, for the award of a research grant to support this work.

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surprising that performance appraisal in facilities management is becoming a formal and regular part of the FM process. Much work has been done to measure facilities management performance, but it often ignores the influences of erratic patterns of reinvestment in building fabric and components which can add as much as 25 per cent to the cost of running a building (Kincaid, 1994). Alexander (1996) identifies measurement of performance as one of ``three essential issues for the effective implementation of a facilities strategy''.

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Facilities performance assessment in higher education setting A university, as any other organisation, is trying to improve its efficiency in the face of rising operating costs and increasing user expectations (Varcoe, 1995). When a particular university is taken into consideration, it has perhaps a wider range of differing building types with more diverse operational needs than most other organisations. Whilst the higher education properties can contribute to high quality education, it is the interrelationship within the organisational context that provides the catalyst for improved performance (Moohan, 1993). The ongoing research attempts to build from the broad principles of facilities performance evaluation by developing a methodology for assessment of a facility's ability to satisfy the objectives of teaching within universities. Buildings are key functional as well as economic resources. They need to be seen more as assets than as liabilities (Douglas, 1996). One thing is certain: change is constant. In particular, the future for university properties is not totally predictable. The pace of change affecting buildings, primarily through technological and economic influences, is likely to increase rather than slow down (Weller, 1995). Proliferation and diversity of technology and adaptation of sharing facilities, greater emphasis on quality in the study place, are some of the potential implications of the changes for universities (Belcher, 1997). Externally, they may inevitably suppress the demand for teaching spaces of universities. This in turn will increase the need to adapt redundant spaces to new uses. On the other

hand, the recent massive expansion in higher education participation has forced universities to achieve more economic use of their facilities (Clarke, 1997). Performance evaluation will play an ever increasing role in building design as external and internal factors place more demands upon the facility (Kerschkam, 1991). This is especially true for universities and institutions which are entrusted with the responsibility of utilising public funds judiciously (Preiser, 1995). Performance measures provide a mechanism to both learn from the past and evaluate contemporary trends in the use of facilities of universities (Avis, 1995). It is hoped that the collection, interpretation, and analysis of information about performance measures of facilities will provide the key to better planning and design for the future. It is likely to advocate that universities take a more progressive commercial approach to resource allocation than has been the case in the past (Clarke, 1997). It is, therefore, suggested that university models of facilities performance evaluation, if developed sensitively, can be more useful not only to inform resource allocation in universities but also to lead to development of new resourcebased approaches for commercial competitive advantage (Preiser, 1995). Further, assessment of the performance of institutions delivering educational services has become a matter of particular interest to governments around the world seeking to increase the effectiveness of educational provision and maximise value for money (Belcher, 1997). Defining performance measures enables the organisation to: . establish position, through carefully and consistently measuring performance; . communicate direction, through targeting what is to be achieved by when; . stimulate action, through identifying who should act and what should be done; . facilitate learning, through explaining why this is measured; and . influence behaviour. Measuring performance explicitly focuses attention on feedback loop and this influences behaviour. Special issues of facilities performance in higher educational organisations Though research in performance evaluation of manufacturing and service industries has

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evolved in a scientific and rigorous fashion based on the early works of Neely et al. (1995), Boice and Kleiner (1997), Preiser (1997), and Clift (1996), the study of other areas, particularly in higher educational establishments has not evolved in a similar rigorous fashion (Zimring et al., 1995). Preiser (1994), summarising the findings of a survey on the issue of facilities performance evaluation in higher educational establishments, comments that the slow speed of quality deployment of higher educational institutions is a critical issue worthy of further study. A number of reasons have been cited for the limited use of facilities management, performance evaluation in particular, in higher education: . theory development and measurement issues are particularly weak in performance evaluation practices in higher education (Preiser, 1994); . lack of training and acceptance by facilities management personnel of the ``soft'' side of performance evaluation, such as behavioural observation and participative management (Pariseau and McDaniel, 1997); . differences in interpretation as to what performance evaluation really means and how it is to be pursued (Belcher, 1997); . maintaining ``soft'' side of performance is a challenge (Tilke, 1995); . the difficulty in accepting the premiss that things can be further improved based on performance measurement outcomes (Finch and Clements-Croome, 1997); . performance evaluation is experience based rather than empirical (Davis, 1996); . difficulty in establishing objective measures of performance variables (Barrett, 1992); . the extent of management commitment is poor (Preiser, 1995). One of the most important developments in higher educational institutions over the last decade has been the growing recognition of the strategic importance of facilities management (Clarke, 1997). The success of manufacturing in many countries has for some time been attributed to close attention to facilities improvement (Oakland, 1989), and now studies are increasingly reporting that management of higher educational

establishments is focusing attention on facilities improvement for a number of reasons, especially in a search for competitive advantage. Pariseau and McDaniel (1997) comment that higher educational institutions are unusual in the sense that it is difficult to assess the quality of the output against the actual performance. Such a statement, however, clearly does not mean that performance evaluation policies cannot be developed in this field. Belcher (1997) comments that, due to the nature of their activities, their background and their assignment, higher educational institutions bring a different view to performance assessment activities in facilities management and they bring more of a sense of scientific enquiry.

The criticism of traditional management control The financial environment in which today's organisations do business puts new and different demands on management control and on the control systems which organisations use (Olive et al., 1999). During the last ten years, traditional management control has been increasingly criticised and summarised below are some of the views advanced in the debate: . furnishes misleading information for decision making; . fails to consider the requirements of today's organisation and strategy; . encourages short-term thinking and suboptimisation; . plays second fiddle to the requirements of financial accounting; . provides misleading information for cost allocation and control of investments; . furnishes abstract information to employees; . pays little attention to the business environment; and . may give misleading information. Performance measurement incorporating non-financial measures has been a topic of great interest throughout most of the 1990s. This is because non-financial measures overcome the limitations of just using financial performance measures. ``Soft'' measures, such as employee satisfaction and commitment, are coming to the fore as

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protagonists of the business performance measurement revolution urge organisations to complement their traditional financial focus with softer data. An increasingly popular measurement technique to accommodate these issues is the balanced scorecard developed by Kaplan and Norton (1996a).

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Balanced scorecard: a new approach to performance assessment in facilities management The concept of the balanced scorecard (BSC) emerged as a reaction against the increasing focus on purely financial measures for planning and managing the business. The concept of the BSC came out of the realisation that no single performance indicator can capture the full complexity of an organisation's performance. It is a tool which adds value by providing both relevant and balanced information in a concise way for managers, creating an environment which is conducive to learning organisations and eliminates the need for managers to ``choose'' which type of control system to use at any given time. Its aim is to present management with a concise summary of the key success factors of a business, and to facilitate the alignment of business operations with the overall strategy. Kaplan and Norton (1996a, 1996b) claim that the BSC provides managers with the instrumentation they need to navigate to future competitive success and that it addresses a serious deficiency in traditional management systems: their inability to link a company's long-term strategy with its shortterm actions. The BSC paradigm is that the financial results are obtained by successful implementation of strategic initiatives in the key business perspectives as opposed to being their driving force. Four perspectives In viewing an organisation through four vital perspectives which are the financial perspective, the customer perspective, the internal business process perspective, and the learning and growth perspective (Figure 1), the balanced scorecard is intended to link short-term operational control to the longterm vision and strategy of the business. The perspectives represent three of the major stakeholders of the business (shareholders,

customers, and employees), thereby ensuring that a holistic view of the organisation is used for strategic reflection and implementation (Mooraj et al., 1999). A number of key questions are asked: . To succeed financially, how should we look to our shareholders? . To succeed with our vision, how should we look to our customers? . To satisfy our shareholders and customers, at what internal business processes must we excel? and . To succeed with our vision, how shall we sustain our capacity to learn and grow? Financial perspective This perspective shows the results of the strategic choices made in the other perspectives, while at the same time establishing several of the long-term goals and thus a large part of the general ground rules and premisses for the other perspectives. The measures chosen will represent the relevant stage in the product/service life cycle. Customer perspective This perspective describes the ways in which value is to be created for customers, how customer demand for this value is to be satisfied, and why the customer will be willing to pay for it. Therefore, the internal processes and the development efforts of the company should be guided by this perspective. This part of the process is the heart of the scorecard because, if the company fails to deliver the right products and services for cost-effectively satisfying customer needs in both the short and the long term, revenue will not be generated, and the business will wither and die. Internal business processes perspective What processes generate the right forms of value for customers and achieve the fulfilment of shareholder expectations? The answers should emerge from this perspective. This involves describing all company processes from the analysis of customer needs through delivery of the product/service and identification of the resources and capabilities which the company needs to upgrade itself. These can include both short-term and longterm objectives as well as incorporating innovative processes development in order to stimulate improvement.

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Figure 1 Four perspectives of the balanced scorecard

Learning and growth perspective The learning and growth perspective enables the organisation to ensure its capacity for long-term renewal, a prerequisite for survival in the long run. In this perspective the company should consider not only what it must do to maintain and develop the knowhow required for understanding customer needs, but also how it can sustain the necessary efficiency and productivity of the processes. The organisational learning and growth come from three sources: people, systems, and organisational procedures. It is the structure within which long-term growth and improvement are to reside. Cause-and-effect relationships The key to the BSC approach is that within an organisation causal relationships exist such as how a change in human capital causes changes in other areas. Through assessments of an organisation, one can create causal relationships, which are tied to the mission, and the model should then be tested to validate whether these relationships exist. These relationships are initially a ``best guess'' and that is how causal relationships are first determined. Then these relationships are tested either with logic like reality checks or multiple evaluations, or with statistics. Identifiable cause-and-effect relationships are an important aspect of the BSC when choosing the appropriate indicators. It enables the translation of a financial aim into

operational factors that will level to that increased revenue. It clearly demonstrates the hypothesised cause-and-effect links, which can be tested using the BSC measurement process.

Methodology ± the pilot study The purpose of the research being reported on is an attempt to devise a performance evaluation framework into facilities management and to facilitate learning about facilities performance evaluation and the outcomes, based on the concept of balanced scorecard, invented by Kaplan and Norton (1992, 1996a, 1996b), which was briefly described above. This study concentrated on higher education establishments as the unit of analysis and focused on finding the practical issues of facilities management performance in a higher educational setting. The pilot study was undertaken to achieve the following objectives: . to understand the context contingencies in FM organisations; . to test the ``operationability'' of the objectives and constructs identified in the literature; . to discover the type of activity supported in the pilot organisation which can be regarded as part of its performance measurement process;

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.

to provide the focus for the research project by helping to refine the data collection plans with respect to both the context of data and the procedures to be followed.

A pilot project acted as an initial attempt towards providing some contribution to the research in question, by providing a more detailed and recent view of the drivers and barriers to performance evaluation initiatives within a facilities management environment and to provide some ideas for further discussion around the process involved in the successful implementation in higher education. The survey at the initial stages helped to increase the understanding of what exactly had been done in practice on performance evaluation issues of facilities management in higher educational organisations. The pilot case was chosen on the basis that it supported the criteria mentioned above, that is, it was FM intensive. The chosen method of research direction is twofold. First, through interviews (semi-structured), with FM personnel, the study tried to analyse the determinants of performance measurement in FM. In tandem with the determinants of performance measurement factors identified by Kaplan and Norton (1996a), it investigated the relative importance of various other issues raised by the literature review, the most significant ones being the implications of the BSC in assessing FM performance. In order to meet the objectives of the study, information was gathered via questionnaires, structured interviews and literature review within the framework of case study research. Interviews were conducted following a flexible set of questions, which was varied or extended at the time of interviewing, to provide a more detailed view on the matter investigated. The comments given by the managers on the content of the questions were valuable in developing workable questionnaires for the future work. The balanced scorecard forces managers to think in terms of fundamental competitive issues. It is the translation of the business unit's strategy into a linked set of measures that define both the long-term strategic objectives and the mechanisms for achieving and obtaining feedback on those objectives. The data collection within the hierarchy of the facilities management and other

customers was structured into three main stages: (1) facilities management's vision and corresponding objectives; (2) critical success factors in relation to these objectives; and (3) development of an appropriate balance of performance measures to support the critical success factors. The pilot data provided considerable insight into the basic issues being studied. In attempting to find a relationship between the level of FM practice and its impact upon performance, the pilot study assumed that performance measurement in FM is basically governed by the user focus, measurement framework, management involvement, communication and tools and techniques. For a fuller description of the pilot study, see Amaratunga and Baldry (1999).

Findings Authors rightly recognised that, if facilities management organisations are to design fully effective performance measurement systems, it is essential that management can clearly determine what their precise performance measurement information needs are. Barrett (1992) identified certain goals common to most facilities management organisations and this evidence suggests a need for a balanced scorecard approach, which adequately reflects the characteristics, goals and critical success factors of the facilities management organisation. Kaplan and Norton (1992) envisaged that the identification of key performance measures would form a prerequisite to developing the scorecard, and an iterative process would take place before the scorecard emerged. Critical success factors and corresponding performance measures Critical success factors and appropriate measures were determined, based on the management responses and keeping in mind the vision and the objectives. By focusing on the aspects of the business which created value for customers and by carefully reappraising the organisational philosophy and incorporating this into the performance measurement system, this study was able to build a balanced scorecard at the exploratory

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stage, which will act as a set of propositions to be tested at the next phase of the study. In interviews and workshops, the management defined and agreed on the strategy, designed strategic objectives to operationalise the strategy, and chose measures that would show whether or not the FM organisation within the higher education establishment was successful in achieving strategic goals. Strategic stakeholder objectives for BSC This offers customised value propositions to targeted customer/stakeholder segments: . defines propositions which different customers value; . understands the economics of fulfilling various propositions; and . differentiates through employees capable of recognising customer needs and possessing the knowledge to proactively satisfy them. Indeed these present no real surprises and they serve to confirm the relative importance of customer satisfaction and achieving good value for money. It is essential for an effective and useful balanced scorecard for use by facilities management organisations to reflect these emphases. An operational manager involved in the pilot study offered the view that: ``Greater knowledge of the FM organisation's service offerings will help our stakeholders better fulfil their needs''. Table I gives examples of some strategic objectives and measures that resulted from the process. Some of the essentials identified are: . perform consistently and seamlessly in the eyes of the customer; . service customers expediently: the timeliness of the response should meet or exceed the customer's requirements; and

.

eliminate mistakes in all customer service encounters.

The role of the balanced scorecard With BSC as a performance assessment model, an increasing number of roles have been identified for the performance assessment in FM higher educational establishments. These range from providing the critical information to be used in a strategic reflection process, to being a key part of the management system of the organisation whereby feedback can be obtained on both the strategic objectives and the indicators being used to measure their attainment. The organisation becomes better at learning and more perceptive and continually develops its competence. Figure 2 illustrates the extent of the process and shows the areas involved (adapted from Kaplan and Norton, 1996b). It was further identified that BSC provides benefits in three primary categories in the FM in higher education establishments: communication and team work, commitment and feedback and learning. By launching a BSC initiative, the intent was to provide a different way of thinking in order to follow more thoroughly the Figure 2 Balanced scorecard: a system for strategic implementation

Table I Customer satisfaction issues and measures Goals

Measures

Customer satisfaction

Value for money, hassle free relationship, high performance professionals, personalised quality service, range of services offered, quality of service, reaction to customers' needs (customers satisfied with timeliness)

Effective service partnership

Customers satisfied with the responsiveness, co-operation and communication skills of the FM organisation

On time delivery

Contracts where initial contractual delivery date meets actual delivery/acceptance date

Cost avoidance

Benefits derived from favourable terms and conditions (e.g. technology upgrades)

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implementation of their generally wellelaborated strategy. An additional advantage of deploying BSCs will be the alignment of measurements that encourage knowledge sharing between all participants from a continuous improvement standpoint. For instance, measuring customer satisfaction in a comparable manner may lead to superior and homogeneous services to higher educational establishments' customers. Such an approach to improving performance in the management of facilities puts the facilities manager firmly in a pivotal position and gives him the centrality in the process that he must have to orchestrate a performance-conscious and proactive organisation.

Forward view The very existence of FM as a modern discipline is based on integration of performance assessment issues, as it is clearly concerned with the overlap between people, processes and places in organisations. Performance measures provide an essential feedback-loop in the process of strategic change. In order to achieve complete learning, a performance measurement system should reflect the value system of all the FM organisation's stakeholders. The issues identified against the customer perspective have been highlighted in this paper, although it is not within the scope of this paper to describe the issues relevant to the issues of other perspectives. However, further research is needed to construct a reasonable framework highlighting the perspectives of the BSC and also how it should be tested against the validity of the cause-and-effect relationships, followed by the provision of cost benefit analyses. This will be the key issue to be addressed by research. It would be of interest, both to organisations who have made the move to the BSC and to those who are considering it, to know how significant value may be added.

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