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Self-assessment in a multi-organisational network

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Max Saunders
Max Saunders
Robin Mann at Centre for Organisational Excellence Research
Robin Mann
  • Centre for Organisational Excellence Research
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Purpose The New Zealand Benchmarking Club (NZBC), a multi‐organisational network, aimed to improve the performance of member organisations through best practice benchmarking. The purpose of this paper is to critique the NZBC self‐assessment process, report the scores for self‐assessments from 2000‐2002, and present an analysis of the 2001 self‐assessment data. Design/methodology/approach A questionnaire measured the improvement rate of NZBC organisations through annual self‐assessments against the Baldrige Criteria for Performance Excellence (CPE). Training was provided for facilitators in each organisation, who supported teams of four to six persons who completed the self‐assessment. Correlation coefficients of pairs of CPE categories and items were used to identify strong relationships between them. Findings Self‐assessment data from 2001 identified 57 strong relationships between different CPE categories and items. The strongest correlation identified (0.94) among CPE items was found between “customer focused results” and “financial and market results”. Acting on the self‐assessment results, management initiatives were implemented and scores in 2002 showed significant improvements over 2001. Research limitations/implications Future research involves case studies and longitudinal studies of annual data to identify possible causes of the strong relationships found. Practical implications Results indicate the benefit organisations obtain from sharing best practices, resources, and self‐assessment experiences. The practices required for effective administration of self‐assessment in a network are given. Originality/value An example of self‐assessment in a multi‐organisational network, and how it was managed. Of interest to organisations that are in an existing network, or wish to create a similar network. No studies of self‐assessment in a network were found in the literature.
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Self-assessment in a
multi-organisational network
Max Saunders and Robin Mann
Centre for Organisational Excellence Research, Institute of Technology and
Engineering, Massey University, Palmerston North, New Zealand
Abstract
Purpose – The New Zealand Benchmarking Club (NZBC), a multi-organisational network, aimed to
improve the performance of member organisations through best practice benchmarking. The purpose
of this paper is to critique the NZBC self-assessment process, report the scores for self-assessments
from 2000-2002, and present an analysis of the 2001 self-assessment data.
Design/methodology/approach – A questionnaire measured the improvement rate of NZBC
organisations through annual self-assessments against the Baldrige Criteria for Performance
Excellence (CPE). Training was provided for facilitators in each organisation, who supported teams of
four to six persons who completed the self-assessment. Correlation coefficients of pairs of CPE
categories and items were used to identify strong relationships between them.
Findings – Self-assessment data from 2001 identified 57 strong relationships between different CPE
categories and items. The strongest correlation identified (0.94) among CPE items was found between
“customer focused results” and “financial and market results”. Acting on the self-assessment results,
management initiatives were implemented and scores in 2002 showed significant improvements over
2001.
Research limitations/implications – Future research involves case studies and longitudinal
studies of annual data to identify possible causes of the strong relationships found.
Practical implications – Results indicate the benefit organisations obtain from sharing best
practices, resources, and self-assessment experiences. The practices required for effective
administration of self-assessment in a network are given.
Originality/value – An example of self-assessment in a multi-organisational network, and how it
was managed. Of interest to organisations that are in an existing network, or wish to create a similar
network. No studies of self-assessment in a network were found in the literature.
Keywords Self assessment, Business excellence, Performance measures, New Zealand
Paper type Research paper
Introduction
Self-assessment against a performance excellence model by organisations within a
multi-organisational network can provide an effective basis for cooperative learning
and benchmarking. In particular, member organisations can share their
self-assessment results and strengths and opportunities to collectively improve
performance. In addition, organisations that individually may find self-assessment
difficult or too resource-intensive can cooperate with other network organisations, for
example in sharing training resources, to develop a more effective and successful
self-assessment process.
There are two main challenges in using a multi-organisational approach to
self-assessment. Firstly, the commitment and personal involvement of managers is
required especially if self-assessments results are to be shared. Secondly, an
administration system is needed to coordinate the assessment process, including
The Emerald Research Register for this journal is available at The current issue and full text archive of this journal is available at
www.emeraldinsight.com/researchregister www.emeraldinsight.com/0265-671X.htm
IJQRM
22,6
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Received August 2003
Revised March 2004
International Journal of Quality &
Reliability Management
Vol. 22 No. 6, 2005
pp. 554-571
qEmerald Group Publishing Limited
0265-671X
DOI 10.1108/02656710510604881
training, analysis of the completed assessments, preparation of reports, and regular
networking meetings to discuss the assessment results and action planning.
This paper presents and discusses the multi-organisational approach to
self-assessment used by the New Zealand Benchmarking Club (NZBC). Club member
organisations are committed to a common strategic initiative of ”improving
organisational performance to world class levels by sharing and transferring best
practices” (Mann, 2000). As part of this initiative all club members undertake an
annual self-assessment against the Baldrige criteria for performance excellence (CPE).
From considering the aggregated self-assessment results of member organisations, the
club then sets-up benchmarking projects to address the areas of greatest concern for
members. In addition, self-assessments help to identify those organisations that have
higher levels of performance so that other club members know which organisations to
approach to learn from. Finally, through calculating the average score of club members
against the CPE the progress of club members to world-class performance can be
tracked (Saunders and Mann, 2002).
In a study of self-assessment practices in Europe and Australia, Van der Wiele and
Brown (1999) identified a number of approaches to self-assessment, and found that a
management driven approach tended to work best. The NZBC approach to
self-assessment is management driven. The senior management team from each
member organisation commits to the club’s process prior to joining the club (therefore
attendance at meetings, participation in benchmarking studies and self-assessment,
and commitment to a CPE improvement target of 50 points per year). NZBC
administration services are provided by a small team funded by membership
subscription, with an advisory group comprising of representatives of NZBC
organisations having an oversight and governance role.
This paper has two main objectives. First, to provide a description and critique of
the NZBC self-assessment process, including the benefits and difficulties NZBC
members have found with self-assessment. Other networks can apply this knowledge
to assist their members to improve their performance through self-assessment.
Organisations that are not in a network can also use the information presented to
create networks similar to the NZBC. Second, to report the NZBC average scores for the
self-assessments from 2000-2002, and provide an analysis of the 2001 self-assessment
data. This data provides an indication of the success of the NZBC, and highlights
relationships between business enablers and results that can help organisations to
determine where best to focus their improvement effort.
The paper is organised as follows. The next section outlines the evidence for the
validity of the CPE framework and self-assessment against it, and the motivation of
NZBC members to self-assess. The method section describes the NZBC’s
self-assessment questionnaire design, its deployment, and provides an analysis of
the questionnaire data. This is followed by the findings, discussion of the results, and
conclusions.
The Baldrige CPE and self-assessment
The Baldrige CPE (also known as the New Zealand Business Excellence Framework in
New Zealand) was developed primarily by practitioners (NIST, 2001). The items that
make up the criteria are regularly updated in response to feedback from performance
improvement practitioners and organisations that have applied for quality awards
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555
based on the Baldrige CPE (NIST, 2001). Researchers who have investigated the CPE
framework have found that it has considerable validity (Douglas and Judge, 2001; Ford
and Evans, 2000; Hausner, 1999; Hendricks and Singhal, 1999; Pannirselvam and
Ferguson, 2000; Wilson and Collier, 2000).
Hendricks and Singhal (1999) studied the long-term effects of implementing
effective quality management programs. Using the winning of CPE quality awards as
the criterion to select organisations, their research shows a strong link between quality
and financial performance. The study found that US quality award winners
experienced increased income, sales and total assets during their respective
post-implementation periods as compared with their controls. Hausner (1999) found
a similar link between quality and business results in a study of Australian Business
Excellence Framework award winners and finalists. The Australian framework is
derived from the CPE. Ford and Evans (2000) compared the strategic planning
category of the CPE against the conceptual literature on strategic planning. They
found substantial alignment between the planning framework of the CPE and the
strategic management literature.
Pannirselvam and Ferguson (2000) reviewed quality management constructs that
have been empirically tested for a relationship between quality management and
business performance, and tested causal models based on the CPE framework. Using
data from a US state quality award, they validated statistically the relationships
between CPE categories. From their study of CPE quality award winners,
Pannirselvam and Ferguson (2000) found the greatest determinant of organisational
performance, both in the market and internally, to be customer focus and relationship
management.
The effectiveness of self-assessment against business excellence models in
improving performance has been well debated, and a number of self-assessment tools
and approaches for both the CPE and the European Foundation for Quality
Management (EFQM) models have been evaluated in the literature (European
Foundation for Quality Management (EFQM), 1999; Jonas et al., 2002; Jarrar, 2001; Lee
and Quazi, 2001; Reames, 1998). The self-assessment process is one method of
promoting continuous improvement, and is used to identify the areas where an
organisation may most benefit from adopting a best practice approach (Van der Wiele
et al., 1996; Ford and Evans, 2001). In a study of European and Australian companies,
Van der Wiele and Brown (1999) found a very positive perception about the effects of
self-assessment on business results. Leggitt and Anderson (2001) reported the
outcomes from improvement initiatives developed from a Baldrige CPE self
assessment at a US hospital. These included market share improvement, listing as a
top 100 hospital, and a successful complaint management program. In a study of nine
large organisations, Samuelsson and Nilsson (2002) noted there was no universal
method for self-assessment, and that successful approaches fit the organisation, are
used continuously, and foster participation. The self-assessment process used by the
NZBC has been developed using both the academic literature and practitioner
experience, and this is detailed with examples in the method section. It is of particular
interest due to the rigour of the self-assessment process and the fact that all NZBC
organisations have committed to using it year on year, so that it provides a reliable
means for assessing relative strengths and opportunities and tracking the overall
NZBC score over time.
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For NZBC members there are two main motivations for undertaking the
self-assessment process. One is to monitor the improvement in their organisation, and
the second is to determine the benchmarking gap between their organisation, other
NZBC members and world-class performance, by comparing the scores obtained. By
using tools such as gap analysis they then have the opportunity to develop
improvement plans based on reliable data about their recent performance. An
important aspect of self-assessment, particularly within a network format such as the
NZBC, is that its cost in time and resources can be low, as training, analysis, reporting
and administration costs are shared among the group.
Although aggregate self-assessment scores are presented in this paper to help
illustrate the progress made by the NZBC as a group, and they are useful indicators of
the outcome of the network’s quality improvement journey, individual members are
more focussed on their own improvement journey. There is a declared intent for all
club members to improve their self-assessment scores by at least 50 points per year. To
achieve this level of improvement members are committed to using benchmarking as a
key tool for addressing their opportunities. This may involve participating in one of the
club’s benchmarking projects, or through learning from one of the better performing
organisations within the club.
It is worth noting that assessments by external examiners against the CPE criteria
are also used by NZBC members, particularly by organisations seeking a CPE award.
However in 2001 most NZBC members were not seeking a CPE award, but wanted a
critical assessment of the performance of their management systems.
Method
Self-assessment
The NZBC 2001 self-assessment questionnaire was modelled on the CPE and based on
a similar style of questionnaire used in the UK. Mann’s experience of leading the
benchmarking and self-assessment initiative for the UK’s food and drinks industry
(Mann et al., 1999) allowed eight years experience of review and development in the UK
and New Zealand to be incorporated in the self-assessment process. A review was
undertaken of more than 15 organisational self-assessment questionnaires before the
NZBC 2001 self-assessment questionnaire was compiled (NZBC, 2001) and a team of
experienced CPE evaluators approved the NZBC self-assessment process.
A review process is carried out annually on the self-assessment questionnaire.
NZBC members had undertaken a self-assessment against the CPE in 2000, and the
2001 self-assessment questionnaire took account of feedback from the NZBC 2000
assessment. The NZBC Advisory Group, comprised of representatives from NZBC
organisations, had reviewed the feedback. In planning the 2001 assessment the
refinements suggested by this review were incorporated in both the content and the
administration of the questionnaire.
Questionnaire design
The questionnaire contained 99 questions, 66 covering the CPE enabler categories and
33 assessing the business results category. The CPE enabler categories were
leadership, strategic planning, information and analysis, customer and market focus,
human resource focus, and process management. Business results formed the seventh
category. Each of the 18 criteria items had at least three questions. Figure 1 shows an
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557
example question. The relevant criteria number was included for each item. The
questionnaire included an evidence section that provided additional questions to help
clarify the evidence the organisation should consider in answering the main question.
An explanation section was also included that provided descriptions of terms.
The questionnaire format allowed qualitative data to be obtained efficiently. The
questionnaire also enabled the qualitative self-assessment data to be analysed in a
quantitative way, as numerical scores within the CPE categories (NZBC, 2001). CPE
assessments are scored from a total of 1,000 points, with 550 points assigned to the
enabler criteria (management areas from one to six) and 450 points assigned to the
business results criterion (category seven). The scoring system used for the
questionnaire was linked to the Baldrige CPE scoring guidelines (for a copy refer to
NIST, 2001). A panel of experienced CPE-trained evaluators selected the weighting
percentage assigned to each response for each question, to ensure that it was aligned to
the CPE scoring guidelines. The CPE scoring system has three dimensions: approach,
deployment and results. The first two scoring dimensions are applied to the enabler
criteria, and the results dimension to category seven (business results). All responses to
questions within a particular category item were then aggregated, averaged and then
weighted using the weighting allocated to each item by the CPE.
There were six potential responses for each question, with a maximum score for any
question of 85 per cent. This limited the maximum score obtainable for the
self-assessment questionnaire to 850, instead of the 1,000-point maximum for a full
independent assessment against the CPE. According to Brown (2000), an overall CPE
score of 100 per cent should be considered impossible to achieve, and a score of 50 per
cent is a high score and is not considered average or easy to achieve. Limiting the
maximum score to 850 takes account of the fact that it is difficult to design
Figure 1.
Example question from
the 2001 NZBC
questionnaire
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self-assessment questionnaires that allow an organisation to score at the high end
against the CPE (as the questions would need to become quite complex and more of
them would be required). This is a limitation of a self-assessment questionnaire format
compared to a CPE quality award assessment. An assessment for a quality award
involves site visits and interviews by outside assessors, permitting a more independent
evaluation than self-assessment (Hutton and Topp, 1999).
Hutton and Topp (1999) outlined the basic principles that they contend assessment
design should follow: ensure senior management buy-in; get input from all levels and
functions; focus on improving business results, not on recognition or scores; plan the
improvements and assign responsibilities; ensure follow-through; and integrate the
assessment process into the planning system. These principles were observed in the
design of the NZBC self-assessment process, and formed the basis of the training for
members prior to completing the self-assessment questionnaire.
Training
Initial training began with the NZBC director orienting senior management in member
organisations to the Baldrige CPE process and obtaining their assurance of full
organisational commitment. The NZBC director, a Baldrige CPE-trained examiner, was
actively involved in training and oversaw the process. Each organisation identified a
facilitator who was to be trained in the criteria to lead the assessment. A one-day
workshop was held to familiarise facilitators with the criteria, their categories, the
assessment process, and how to complete specific questions in the assessment. The
training promoted consistency in the interpretation of the questionnaire items, and
moderated the possibility of scoring variations between inexperienced facilitators
(Yang et al., 2001). The action planning process was emphasised as a means of
integrating the information obtained from the self-assessment into the strategy for
further performance improvement.
The assessment process
The self-assessment process used was very prescriptive, and was completed over a
one-month period in 2001. Teams of at least four persons were formed to complete the
assessment in each organisation. The facilitator selected a team with as broad a
representation of services and departments as possible (18 people in one large
organisation). The facilitator did not complete the questionnaire but provided support
for team members. The team members individually completed the questionnaire in
preparation for the consensus meeting. The consensus meeting was one to two days in
length. The time spent on the self-assessment process in each organisation varied from
15 to 50 hours, averaging 20 to 25 hours. The completed assessments were returned to
the NZBC director for analysis.
The analysis of the self-assessment questionnaire for each participating
organisation was completed and scored according to the principles and points
allocation outlined in the CPE. As experienced CPE evaluators were involved in the
design of the questionnaire, it is believed that the self-assessment results in this study
provide a good guide to an organisation’s relative strengths and opportunities for
improvement and a fair guide to an organisation’s CPE score. Most scores are
estimated to be within þ/220 per cent of the score that would be identified by a more
rigorous assessment using external evaluators that have an in-depth knowledge of the
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559
CPE. The widest variation is estimated to be þ/240 per cent. These figures were
estimated by an experienced team of CPE evaluators after considering data obtained
from two organisations that undertook an evaluated CPE assessment at a similar time
to the self-assessment, and using their knowledge of the CPE and self-assessment
process.
The scores for all organisations in each CPE item and category were entered into
Minitab (version 13.0) and collated. Correlation coefficients were obtained for all
combinations of pairs of CPE categories and items, and were used to identify strong
relationships between them. Other statistical techniques were considered to further
analyse the correlations. Exploratory factor analysis (EFA) would ideally be performed
on the enabler and business results category data to determine the enablers that have
the main effects on results. The sample was however less than the recommended size of
at least 150 observations (Rahman, 2002) and therefore EFA would not give reliable
solutions.
An individual report was written for each member, detailing the results and
analysis of their self-assessment. The report compared members’ results within other
members of the NZBC (with the identity of each organisation coded to preserve
anonymity) and against world-class performance, and identified areas for
improvement. In addition to the feedback report, members also met for a day to
share the findings from their self-assessments and the names of the top three
organisations per criteria item was communicated to encourage best practice sharing.
Results
A total of 15 organisations completed the NZBC’s annual self-assessment against the
CPE criteria in 2001. The categories with greatest opportunities for improvement were
leadership (primarily because this category is given the highest point weighting by the
CPE), information and analysis, customer and market focus, and strategic planning
(NZBC, 2001). The NZBC’s areas of greatest strength were human resource focus and
process management.
The CPE enabler items that were identified as key opportunities for improvement
were, ranked in order: organisational leadership, measurement and analysis of
organisational performance, customer relationships and satisfaction, strategy
deployment, and product and service processes.
A number of significant relationships were identified when the NZBC 2001
self-assessment data were analysed. A total of 57 strong correlations were found
between CPE categories and items (r.0:705, p,0:004). The strongest relationships
are shown in Table I. The correlation matrices for the seven CPE categories and the 18
CPE items are shown as Tables II and III, along with a description of the CPE
categories and items (see note in Table III).
Four of the most significant relationships identified are presented below. These
have been chosen as examples because they involve business results (CPE results
– category 7), and therefore were of particular interest to managers, who typically
represent NZBC organisations at network meetings. These relationships were
presented to senior managers at the annual NZBC self-assessment results meeting
in November 2001, and were highlighted in the published results that were
distributed to all NZBC members. Each data point on the scatter graphs represents
one NZBC organisation.
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Item or category Item or category
Strength of
relationship
Correlation
coefficient (r)
Significance
(p-value)
7.1 Customer focused results 7.2 Financial and market results Very strong 0.937 0.000
7.4 Organisational effectiveness results 7.2 Financial and market results Very strong 0.913 0.000
1. Leadership 2. Strategic planning Very strong 0.910 0.000
1. Leadership 2.1 Strategy development Strong 0.875 0.000
1.1 Organisational leadership 2. Strategic planning Strong 0.844 0.000
7.1 Customer focused results 7.4 Organisational effectiveness results Strong 0.824 0.000
6.3 Support processes 7.2 Financial and market results Strong 0.819 0.000
1.1 Organisational leadership 2.1 Strategy development Strong 0.816 0.000
5.2 Employee education, training and development 6.1 Product and service processes Strong 0.810 0.000
6. Process management 5.2 Employee education, training and development Strong 0.801 0.000
5. Human resource focus 4.2 Information management Strong 0.799 0.000
6.3 Support processes 7.0 Business results Strong 0.794 0.000
1. Leadership 2.2 Strategy deployment Strong 0.794 0.000
7.1 Customer and market focus 7.2 Financial and market results Strong 0.793 0.000
6.3 Support processes 7.4 Organisational effectiveness results Strong 0.791 0.000
2. Strategic planning 1.2 Public responsibility and citizenship Strong 0.788 0.000
Enabler points (aggregation of categories 1 to 6) 7.4 Organisational effectiveness results Strong 0.783 0.001
Enabler points (aggregation of categories 1 to 6) 7.2 Financial and market results Strong 0.779 0.001
6. Process management 7.2 Financial and market results Strong 0.774 0.001
Enabler points (aggregation of categories 1 to 6) 7. Business results Strong 0.771 0.001
3.1 Customer and market focus 7.1 Customer focused results Strong 0.767 0.001
Note: The CPE item or category numbers are shown in front of the item/category descriptions
Source: NZBC (2001)
Table I.
Key relationships
between CPE items and
categories
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561
Figure 2 provides strong evidence of the relationship between the management
systems an organisation employs (the CPE enablers – categories 1 to 6) and the
business results it achieves (CPE results – category 7). This graph shows the spread of
CPE scores from 15 self-assessments.
Another particularly strong relationship was identified between organisational
effectiveness results and financial and market results (an item in CPE results) (see Figure 3).
Figure 4 shows a very strong positive relationship between the scores for members’
customer-focused results and their financial and market results. This indicates that
organisations that score highly in customer-focused results also score highly in
financial and market results. A strong positive relationship is also shown in Figure 5
CPE category 1 (L’ship) 2 (SP) 3 (C&MF) 4 (I&A) 5 (HRF) 6 (PM) 7 (BR)
1 Leadership 1.00
2 Strategic planning 0.91 1.00
3 Customer and market focus 0.53 0.53 1.00
4 Information and analysis 0.62 0.68 0.66 1.00
5 Human resource focus 0.76 0.73 0.56 0.66 1.00
6 Process management 0.55 0.52 0.69 0.60 0.71 1.00
7 Business results 0.52 0.60 0.71 0.66 0.67 0.74 1.00
Source: NZBC (2001)
Table II.
Correlation matrix for the
seven CPE categories
Item
no. 1.1 1.2 2.1 2.2 3.1 3.2 4.1 4.2 5.1 5.2 5.3 6.1 6.2 6.3 7.1 7.2 7.3 7.4
1.1 1.00
1.2 0.58 1.00
2.1 0.82 0.47 1.00
2.2 0.74 0.69 0.71 1.00
3.1 0.40 0.54 0.54 0.39 1.00
3.2 0.39 0.56 0.48 0.33 0.72 1.00
4.1 0.38 0.63 0.42 0.67 0.39 0.63 1.00
4.2 0.63 0.59 0.59 0.70 0.75 0.65 0.73 1.00
5.1 0.56 0.40 0.49 0.71 0.44 0.33 0.50 0.75 1.00
5.2 0.65 0.48 0.59 0.36 0.60 0.42 0.22 0.61 0.63 1.00
5.3 0.73 0.58 0.65 0.67 0.47 0.50 0.61 0.68 0.52 0.66 1.00
6.1 0.41 0.33 0.44 0.08 0.61 0.41 0.24 0.56 0.33 0.81 0.43 1.00
6.2 0.46 0.47 0.58 0.56 0.62 0.58 0.61 0.73 0.66 0.59 0.46 0.63 1.00
6.3 0.61 0.40 0.54 0.52 0.66 0.53 0.39 0.76 0.56 0.64 0.57 0.59 0.71 1.00
7.1 0.27 0.34 0.41 0.36 0.77 0.65 0.38 0.65 0.61 0.55 0.27 0.54 0.76 0.73 1.00
7.2 0.44 0.43 0.52 0.51 0.75 0.72 0.56 0.76 0.63 0.56 0.49 0.56 0.77 0.82 0.94 1.00
7.3 0.48 0.31 0.41 0.56 0.09 0.35 0.53 0.37 0.42 0.32 0.57 0.15 0.39 0.44 0.39 0.53 1.00
7.4 0.53 0.54 0.59 0.64 0.65 0.58 0.54 0.67 0.57 0.59 0.58 0.53 0.75 0.79 0.82 0.91 0.66 1.00
Notes: 1.1 – Organisational leadership; 1.2 – Public responsibility and citizenship; 2.1 – Strategy development;
2.2 – Strategy deployment; 3.1 – Customer and market knowledge; 3.2 – Customer relationships and satisfaction;
4.1 – Measurement and analysis of organisational performance; 4.2 – Information management; 5.1 – Work
systems; 5.2 – Employee education training and development; 5.3 – Employee well-being and satisfaction;
6.1 – Product and service processes; 6.2 – Business processes; 6.3 – Support processes; 7.1 – Customer focused
results; 7.2 – Financial and market results; 7.3 – Human resource results; 7.4 – Organisational effectiveness results
Source: NZBC (2001)
Table III.
Correlation matrix for the
18 CPE items
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between customer and market focus and customer-focused results. Although this
relationship may appear trivial, in that improved customer focus could be expected to
result in increased customer satisfaction, it is important because of its link with
financial and market results. This linkage is explored in the discussion section.
Figure 2.
Relationship between
scores for enabler points
and business results
Figure 3.
Organisational
effectiveness results and
financial and market
results
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563
Table IV shows NZBC scores for the seven members that participated in all three
annual self-assessments, 2000-2002, with New Zealand benchmarks for comparison.
Drawing on the experience of the New Zealand Business Excellence Foundation, who
conduct CPE-based assessments throughout New Zealand, it is believed that the
Figure 4.
Customer focused results
and financial and market
results
Figure 5.
Customer and market
focus enablers and
customer focused results
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average score of a New Zealand organisation is around 150 points. A New Zealand
National Award winner deemed to be world class would score greater than 600 points.
Only the average scores for the seven members that participated in all three annual
self-assessments are given in Table IV. This gives a more revealing comparison of the
annual average improvement than would the average annual scores for all NZBC
members, that are affected by changes in membership from year to year. Table IV
shows the significant increase in average score for 2002, an improvement of 75 points
over the 2001 average score.
Discussion
Identification of key determinants of business success
The analysis of the CPE self-assessment results of NZBC members in 2001 identified 57
strong relationships (with correlation coefficients greater than 0.7) between different
CPE categories and items. The strongest correlation identified between CPE items (a
correlation of 0.94) was found between “customer focused results” and “financial and
market results” (see Figure 4) in support of the findings from Pannirselvam and
Ferguson (2000). From their study of Baldrige quality award winners, Pannirselvam
and Ferguson (2000) found the greatest determinant of organisational performance,
both in the market and internally, to be customer focus and relationship management.
One of the strongest relationships identified between CPE categories was between
CPE “enablers” and “business results”, a correlation of 0.77. The relationship indicated
that organisations that score highly for management systems as assessed against the
CPE criteria also score highly for financial and market results (see Figure 2). Although
scatter graphs do not identify causal relationships, it is clear from Figure 2 that
organisations with excellent approaches to leadership, strategic planning, customer
and market focus, information and analysis, human resource focus and process
management are more likely to achieve excellent business results (composed of
customer satisfaction results, financial and market results, human resource results,
and organisational effectiveness results). This relationship was also identified in an
analysis of the NZBC’s self-assessment results in 2000 (NZBC, 2001).
The findings reveal two sets of relationships that warrant further investigation.
These are the very strong positive relationships between customer and market focus
systems and customer focused results (Figure 5), and customer focused results and
financial and market results (Figure 4). It is possible to track a relationship from
customer and market focus systems to customer focused results, and then to financial
and market results. This suggests that improving the performance of customer and
market focus systems can improve financial and market results. It also indicates the
CPE points score
New Zealand organisation average score 150
2000 NZBC average score 260
2001 NZBC average score 287
2002 NZBC average score 362
Highest points score of NZBC member, 2001 435
Note: There was a substantial increase in the NZBC average score in 2002 over 2001
Table IV.
NZBC scores for the
seven members that
participated in all three
self-assessments,
2000-2002; and New
Zealand benchmarks
Self-assessment
565
importance of measuring the performance of an organisation’s customer and market
focus systems and customer focused results as these can provide an early indication of
future financial results. This in turn suggests that the responses to the ten questions in
the customer and market focus section of the questionnaire give a good indication of an
organisation’s future financial results. The ten customer and market focus questions
are listed in Table V.
The role of the self-assessment process in organisational improvement
The analysis of the assessments revealed that, within organisations, most had areas in
need of improvement. To facilitate their improvement plans many members joined
NZBC benchmarking projects or initiated other specific projects based upon the results
of the assessment. For example, NZBC benchmarking projects were formed in the CPE
categories of leadership, customer and market focus, information and analysis,
strategic planning, and human resources (Saunders and Mann, 2002). After the
self-assessment results meeting in November 2001, where the correlations were
presented and the link between customer and market focus and financial and market
results was highlighted, a number of members implemented their own initiatives,
particularly to improve customer focus systems.
Subsequent self-assessments provided the data to allow members to examine the
effectiveness of these initiatives. While the impressive 75 point increase in average
scores for 2002 over 2001 (Table IV) cannot be attributed solely to the 2001
CPE no. Self-assessment question
3.1.a.1 Do we define who our customers are (from which market segments) and clearly
identify their needs?
3.1.a.2 Do we effectively determine key product and service features and their relative
importance to customers?
3.1.a.2 Do we collect a variety of data/information that helps us to determine current and
future customer requirements for all our services and/or products?
3.1.a.2 Do we have effective processes/methods for ensuring that customer information is
used effectively so that our products and services are continually improved to meet
current and future customer requirements?
3.1.a.3 Do we evaluate the usefulness of our customer information and data gathering
methods?
3.2.a.1 Do we have an effective process in place to build customer loyalty and retain current
business as well as generate positive referrals?
3.2.a.2 Do we use a variety of methods to make it easy for clients to seek assistance and
comment on the quality of the services or products we provide?
3.2.a.3 Do we seek, monitor and record customer complaints and take appropriate action to
ensure that problems do not occur again?
3.2.b.1 Do we employ a variety of methods and measures (e.g. surveys, interviews, and focus
groups) that provide customer satisfaction and dissatisfaction information that is
used for improvement?
3.2.b.3 Do we use thorough and objective methods and sources to determine how our
organisation’s level of customer satisfaction compares with those of all major
competitors?
Source: NZBC (2001)
Table V.
Customer and market
focus questionnaire items
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566
self-assessment process and the improvement initiatives that were subsequently
deployed, feedback from managers suggests they played a significant role.
An evaluation meeting was held following the reporting of the self-assessment
results. Feedback from the evaluation meeting showed many managers valued the
learning they experienced by participating directly in the assessment process. A
theoretical explanation for the improvement of NZBC self-assessment scores over time
is the internal motivation that managers have to self-assessment, and the subsequent
management-driven improvement initiatives based on data from the self-assessments.
Van der Wiele et al. (2000) noted that self-assessment is usually an internally motivated
change process, with the personal involvement of managers in self-assessment an
important motivator for implementing and continuing self-assessments. At the
evaluation meeting there were also comments that in some organisations there was a
lack of action by management on the opportunities for improvement identified during
the self-assessment process, an issue also documented by Ford and Evans (2001). This
highlights the important role that action planning for improvement plays.
The NZBC assessment process effectively ends with the presentation of the
evaluative report, which identified strengths and opportunities for improvement.
However this feedback report also describes a suggested method for developing an
action plan. This involves the management team agreeing on an action planning
process and selecting category leaders to ensure implementation of agreed actions. An
action planning meeting follows to reach provisional agreement on all actions. The
potential impact of each action on each item is then assessed to check that the actions
have been prioritised appropriately. After the sign-off of the action plan category
leaders conduct regular progress reviews.
Limitations of self-assessment
For the NZBC self-assessments there was no formal moderation of the scores, or
independent validation of the scores through site visits and interviews. This raises the
question of the accuracy and validity of the self-assessment scores, which could be
subjectively biased, and therefore invalidate the correlations among items from the
self-assessment instrument. This issue has been addressed in a study by Lee and Quazi
(2001) that has confirmed the accuracy and validity of a well-constructed
self-assessment. They tested the scores from a self-assessment questionnaire against
the scores of the same organisations in their quality award applications. The results
showed significant correlation between the assessment score bands and the actual
score bands received in their quality award application (Lee and Quazi, 2001).
The main objective of the annual NZBC self-assessment is to provide scoring data
that will assist member organisations to improve. Whilst it is useful to demonstrate a
strong relationship between the scores obtained by the self-assessment method as
compared to a full quality award assessment, for the NZBC questionnaire one of the
prime benefits was that it provided a relative score against other organisations that
took part and used the same process.
The value of self-assessment data for business research
Typically it is very difficult to find conclusive evidence of relationships between
success factors in a business. This is due to the dynamic nature of the business
environment and the difficulty of developing assessment tools that can isolate success
Self-assessment
567
determinants within a business and generate sufficient data to provide conclusive
evidence of a relationship.
The likely reasons why a number of strong relationships have been able to be
identified in the NZBC 2001 data are:
.A self-assessment derived from the CPE provides a complete assessment of an
organisation, with the CPE accepted worldwide as a valid organisational
performance model. The NZBC self-assessment questions and response
weightings were aligned to the CPE scoring guidelines and checked by
experienced CPE evaluators.
.The self-assessment has been applied reasonably consistently by all NZBC
member organisations. The self-assessment process used is very prescriptive,
and all members also attend a training day in the process. These measures
promote consistency in the interpretation of the questionnaire items, and
moderate the scoring variations that can occur between assessors (Yang et al.,
2001).
.The self-assessment questionnaire has been developed to a level that allows a
reasonably accurate assessment against the criteria. Studies of similar
self-assessments have shown that the scores correlate closely with actual
scores obtained in quality award applications (Lee and Quazi, 2001).
Concluding remarks
The analysis of the NZBC self-assessments for 2001 identified many strong and
statistically significant relationships between CPE categories and items. For example,
financial and market results showed a strong correlation with customer focussed
results, customer and market systems, and organisational effectiveness results.
Business results showed a strong correlation with management systems (as assessed
by the CPE enabler criteria). For NZBC members, the 2001 correlations highlighted the
CPE items and categories that were strongly associated with business results. This
directed management attention to those areas that, if improved, could produce the
greatest positive effect on organisational performance. The correlations had particular
value to NZBC members that had similar scores across all the CPE categories, as their
individual assessment did not give them a clear indication of where to most effectively
target their improvement effort.
While a number of correlations with business success have been identified in the
NZBC 2001 data, further work is needed to identify the possible causes that underlie
these relationships. Current work with NZ CPE-aligned organisations involves case
studies that are investigating the relationship between organisational performance and
customer and market focus, strategy deployment, and the CPE improvement journey.
These have been identified from the self-assessment data as productive research areas
for the management of organisational quality improvement. A longitudinal study of
the annual NZBC self-assessment data to further investigate the relationships between
self-assessment, the enabler criteria, and business results will contribute to theoretical
and conceptual development (Saunders and Mann, 2002). Future research will compare
NZBC self-assessment data with externally evaluated assessments, as NZBC members
apply for CPE-based quality awards. This will test the validity and reliability of scores
IJQRM
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568
obtained from the NZBC self-assessment questionnaire against the scores of the same
organisations in their quality award applications.
The New Zealand experience with performance improvement can be compared with
Australia. Van der Wiele and Brown (2002) found that in the 1990s many Australian
organisations had goals of applying for an Australian quality (business excellence)
award and were using the self-assessment framework to guide their quality
management efforts, often using consultants for the process. More recently most of the
organisations have relied on their own resources to pursue quality and consultants
were only used for very specialised services (Van der Wiele and Brown, 2002). This is
similar to the New Zealand experience. Many New Zealand organisations are members
of the New Zealand Business Excellence Foundation, who administer the New Zealand
CPE Business Excellence Awards, and use the CPE framework to guide their
performance improvement. While some NZBC members seek a CPE award, most rely
on self-assessment to evaluate their management systems, and use the services
provided by the NZBC to achieve this in preference to using consultants (Saunders and
Mann, 2002).
Some difficulties do occur in using self-assessment in a network environment to
investigate performance improvement. There is an annual turnover of members in the
NZBC, and this change in membership means there are a limited number of
organisations that have completed a consecutive series of self-assessments. This limits
the number of organisations available for longitudinal studies, with seven of the 13
NZBC members who undertook self-assessment in 2000 also self-assessing in 2001 and
2002. Another difficulty for longitudinal studies is the fact the CPE are reviewed
annually. Although the changes have been relatively minor since 2000, they do mean
that the self-assessment questionnaire is altered to reflect changes to the criteria, and
therefore self-assessment results from different years are not completely comparable.
However a potentially larger issue is that of scoring variations caused by
inexperienced assessors. This issue has been minimised by the NZBC training process.
The complexity of CPE based self-assessment can daunt smaller organisations that
have limited resources to commit to the process. Instead of a full award-based
self-assessment, Biazzo and Bernardi (2003) suggest a self-assessment against a partial
application of excellence models as a less complex option for SMEs. However the
approach of the NZBC has helped overcome this difficulty, as the network format
provides expertise and reduces the time and resources required for training, analysis,
reporting and associated administration.
Besides pooling resources and expertise in self-assessment, other advantages of
self-assessing within a multi-organisational network include sharing experiences with
improvement initiatives and transferring best practices. The information in this paper
can be used by practitioners to assist other networks to improve their performance, and
to assist organisations that are not in a network to create networks similar to the
NZBC.
Self-assessment is only one instrument in quality improvement, and the sustained
increases in performance shown by NZBC members are due to a combination of actions
including identifying opportunities for improvement based on the assessments,
implementing action plans based on these opportunities, and sharing good-to-best
practices. The strength of a self-assessment against the CPE lies in its comprehensive
nature and its generic format (Reames, 1998). These features have allowed a diverse
Self-assessment
569
network of organisations to share resources to train staff in the assessment process,
and to collectively improve both the assessment tool and their organisational
performance.
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Further reading
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the EFQM excellence model”, International Journal of Quality & Reliability Management,
Vol. 20 No. 2, pp. 164-88.
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business performance”, International Journal of Quality & Reliability Management, Vol. 11
No. 4, pp. 29-44.
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Article
  • Jan 1999
Every year since 1992, TELUS Mobility (TM) has conducted a systematic Baldrige assessment and used the results to develop a focused improvement plan. This strategy has led to world-class performance and outstanding business results. This session covers TM's improvement journey, assessment methods, and learnings about how to drive continuous improvement.
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Organisational performance measurement and improvement: Recent developments and the New Zealand context.
Article
  • Jun 2002
This paper describes recent developments in organisational performance measurement and improvement, and the New Zealand response to these developments. The paper begins by providing an overview of the movement towards business excellence and benchmarking, and summarises the research evidence showing that the Baldrige framework has considerable validity. In New Zealand, benchmarking and business excellence initiatives have been promoted by The New Zealand Benchmarking Club (NZBC) and the New Zealand Business Excellence Foundation (NZBEF). Preliminary findings of the NZBC's 2001 self-assessment results show strong relationships between several Baldrige categories and items (the strongest between "Customer Focused Results" and "Financial and Market Results"). A summary of benchmarking studies in progress at the Centre for Organisational Excellence Research (COER), Massey University, is presented. The need for continued co-operation and collaborative research between organisations such as NZBC, NZBEF, New Zealand Organisation for Quality (NZOQ) and COER on quality management and performance improvement is identified.
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Self-assessment of excellence: An application of the evidential reasoning approach
Article
  • Nov 2001
Self-assessment of performance using the European Foundation for Quality Management (EFQM) Model for Excellence is widespread amongst European organizations. The paper reports the development of a model, based on the evidential reasoning approach from multiple attribute decision-making (MADM), which it is argued helps to reduce the subjectivity of the scoring of an organization's performance against the criteria of the EFQM Model and brings a degree of science into the self-assessment process. The development of the MADM model is based on the people management criteria of the 1998 version of the EFQM Model and tests have been undertaken using two self-assessment submission documents from a major multi-utility organization.
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Organisational self-assessment options: A classification and a conceptual map for SMEs
Article
  • Nov 2003
  • Int J Qual Reliab Manag
The growing importance and considerable prestige that quality awards hold have encouraged firms to adopt “excellence models” as evaluation frameworks for organisational self-assessment. This has contributed to the spread of a specific form of self-assessment logic: primarily, the search for conformity to a set of non-prescriptive requirements that reflect validated, leading-edge management practices; secondarily, the search of alignment of practices with organisational needs and business factors. But the adoption of this kind of self-assessment is not necessarily the proper “choice”, particularly for small and medium-sized enterprises (SMEs). This paper examines the nature of the diagnostic processes incorporated in award-based self-assessment and in other diagnostic models developed in the organisational literature. This analysis provides the foundation for the development of a classification matrix that enables us to differentiate five self-assessment approaches (paradigmatic, normative, situational, normative-situational, and open), which can be implemented either with a process-based or a non-process-based analytical frame. On the basis of this matrix we outline a “conceptual map” that could help SMEs in questioning the meaning and substance of “organisational self-assessment” so as to choose knowingly and rationally frameworks and diagnostics instruments.
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A methodology for developing a self-assessment tool to measure quality performance in organizations
Article
  • Mar 2001
  • Int J Qual Reliab Manag
This paper proposes a development methodology that uses the assessment criteria of the national quality award as the basis for creating a self-assessment tool to measure quality performance in organizations. The Singapore Quality Award (SQA) assessment criteria were used as the framework for developing the self-assessment tool. The SQA award criteria were translated into a multi-item questionnaire. The self-assessment tool is used to assess quality performance in various functions of the organization. The scores obtained using the assessment tool was tested against those of the recent SQA applicants. Results showed significant correlation between the assessment score bands and the actual score bands that they received on their SQA application. As of the end of 1998, about 200 business organizations in Singapore had used the self-assessment tool. Self-assessment tools using different national quality award criteria could also be developed based on the proposed development methodology described in this paper.
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Business Improvement through Quality Management Systems
Article
  • Feb 2000
  • MANAGE DECIS
This paper focuses on the use of the ISO 9000 series certification and the use of self-assessment against an excellence model, as two examples of management fads which have survived for a long period of time. The literature suggests that two variables are related to the perceived success of the implementation of a fad. First, the degree of intrinsic as opposed to extrinsic motivation which is present, and second, the depth of organisational change which is demanded by the implementation. The two fads described in this paper differ in relation to these two variables.
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