Analysis of Performance Improvement and Management for Care UK

This report analyzes the performance of Care UK, a British health and social care provider. It begins by examining strategic planning models like strategic mapping and gap planning, discussing their advantages and disadvantages in the healthcare context. The report then delves into financial statement analysis, interpreting revenue trends, EBITDA margins, and the significance of financial ratios for stakeholders. It calculates and discusses the importance of residual income. Finally, the report evaluates the use of non-financial and multidimensional models of performance management within Care UK, offering a comprehensive overview of performance improvement strategies and their application in the health and social care sector. The report is a student submission, providing insights into performance management.

PERFORMANCE
IMPROVEMENT AND
MANAGEMENT IN
HEALTH AND SOCIAL
CARE

Table of Contents
INTRODUCTION...........................................................................................................................3
QUESTION 1...................................................................................................................................3
Strategic Planning model and Advantage and disadvantage of using same in the organization 3
QUESTION 2...................................................................................................................................6
Analysis of financial statements of company.........................................................................6
Analysis of Efficiency ratios .................................................................................................7
Residual incomes of the company before and after investments...........................................8
Information that is important apart from the ratio analysis for interpreting the financial
statements of company...........................................................................................................9
QUESTION 3.................................................................................................................................10
Discussion paper for evaluating use of non- financial and multidimensional model of
performance management....................................................................................................10
CONCLUSION .............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The competition within the market and in the business environment is very high and to
manage this competition it is necessary for the company to manage its performance in effective
and efficient manner. Thus, for this concept of performance management is being used which
help companies in managing its performance in effective and successful manner. The present
report is based on Care UK which is a British company established in UK and deals in providing
social and health care to general people. The current report will outline the different types of
strategic planning model which are appropriate for the care providers. Also, this will highlight
some calculations and ratio analysis and there interpretations. In the end the use of non- financial
and multidimensional model of performance management will be discussed.
QUESTION 1
Strategic Planning model and Advantage and disadvantage of using same in the organization
Strategic planning process in the organization is a process in the organization in which looks at
developing different direction, decision and allocation of the different resources in the
organization. There are many different type of the strategic model which can be used by different
heath care organization of the UK. Strategic planning in the organization used to serve as the
road map to help the different organization to discover the different way through which different
operation can be carried out in the organization (Tahir, Ibrahim and Nurullah, 2019). Some of
the example are as follows:
Strategic Map: It is one of the best model which can be applied on the heal care industry
of the organization. This tool is the visual tool which is designed in the organization for the
purpose of communicating the strategic plan in the way in the organization that it help
organization in achieving the high level of the business goal in the organization. Reason for

choosing the same for the health care organization is that it used to provide the good framework
of the strategy in which organization used to make the different strategy by looking at the 4
different perspective of the organization (Liao, Lin and Lin, 2016). The 4 perspective are
Financial perspective, customer perspective, Internal Perspective and Learning and growth
perspective of the organization. Looking at four different perspective in the organization will
help the organization in building a multidimensional product in the organization, which can help
the company in covering better market area coverage of the organization. Benefits and drawback
of using Strategic Mapping for the organization are as follows:
Benefits
Access multiple Level: Biggest benefit which will be enjoyed by the organization by
using strategic mapping in the organization is that it will help the organization accessing the
overall performance of the organization, by looking the same at the different level. Not only that
as it help the organization in looking at many different perspective, it help the organization in
going deeper into many different component of the individual before making different strategy in
the organization. This will eventually help the management of the organization in getting support
in context of the information in the organization.
Delegate task more efficient: Strategy mapping will also help the organization in
delegating the different task very efficiently in the organization. As strategic mapping in the
organization used to help the organization in dispersing the different task in the organization in a
way that it help the organization in breaking down the different strategy in the organization more
efficiently (Ahmad and Zabri, 2016). It will also help the organization in bring good sort of
clarity in the organization to carry out the different sort of activity in the organization. Generally
strategic mapping in the organization used to make the different blogs and used to delegate
further boxes in the organization, which help employee and organization in understanding the
different delegated task easily in the organization.
Drawbacks
Impact the efficiency of business: Biggest disadvantage of using strategic mapping in
the organization is that it used to demands a good amount of the resources from the organization
end to carry out different operation of the business. As organization has to invest a good amount
of the time and the efforts from the organization end to carry out the process of the strategic
planning in the organization. This eventually used to has a very negative impact on the

performance of the business as efficiency of the business is very negatively impacted in the
organization. As a result organization used to look at other strategic model in the organization
that is pestle, swot and gap analysis in the organization.
Complex Process: Another disadvantage which has been find of this strategic model is
that it is one of the complex process to be carried out in the organization. Reason behind the
same is find out that organization used to collect the information from many different places and
has to evaluate the same in the organization in a way that it used to suit in the strategic mapping
of the organization (Xu, Yuan and Xu, 2017). This eventually used to complex the different
process of the organization.
Gape planning: Gape planning is the another strategic planning model which can be used in the
health care industry. In this strategic planning method organization has to compare the actual
position of the business and the position organization is planning to go in the coming future. This
eventually used to help the organization in finding out the different variance in the performance
of the organization (Mondragón-Ixtlahuac, Cortés-Martíne and Delgado-Hernández, 2017). On
the basis of the variance found, organization used to make variety of the different decisions in
the face of the strategy to overcome the variance in the organization. In this model organization
has to make sure that they used to promote the different expectation of the company in the
organization and on the basis of the same used to compare the actual and expectation of the
company.
Advantage of Gape Planning
Better idea of the organizational position: Gap planning in the organization used to
help the organization in getting better idea about the different position of the business. As this
tool used to analysis the current position of the business before making any sort of the decision
in the organization, which help the organization in making more efficient decision in the
organization as compare to the other strategic model.
Clarity: Gape mapping also help the organization in maintaining a good amount of the clarity in
the organization. As all the employee in the organization are clear about the different activity
which they have to perform or can be said that what is organization is expecting them to do in
the organization (McBride. and McBride, 2017). This help the organization in passing on the
good level of motivation to all the employee in the organization, as they feel free to work for the
organization to carry out different operation of the business in the organization.

Disadvantage of gap analysis
The major disadvantage of using gap analysis as a strategic planning model is that this
can reduce the morale of employees of Care UK if the cause of gap is the performance of
employees. This is majorly because of the reason that if the root cause is the performance of the
employees then they will get demotivated as they perform up to their maximum efficiency.
Another major disadvantage is that this will increase the cost of company as they have to
hire an external person who will help the company in analyzing the gap and the causes of gap.
Even this process of gap analysis is very time consuming because the manager and employees of
Care UK will have to critically analyze all the factors of decision and then they will gather data
relating to the gap and how to remove the gap for getting successful.
QUESTION 2
Analysis of financial statements of company
Financial analysis is important for the shareholders. Objective of the financial statements
is of providing the information about financial positions, performance during the year and
change in financial position of enterprise which is useful for making number of economic
decisions. This provides important information about the performance of company in a given
year, that refers to the effectiveness of utilising the resources of company. This gives whether
company is able to achieve the desired returns and profits with the available resources. They
identify the growth achieved by business during the given year as compared with other
companies. They compare the results and returns of different companies to identify whether their
investment is generating adequate returns or not. It is essential for the shareholders to identify the
viability of their investments. Shareholders with he help of financial analysis can identify the
returns of their company and whether their wealth have been increased or not along with the
investments in the companies. With the use of financial statements shareholders can identify the
fluctuations in the trends and figures between the terms of company.
It helps them in analysing the proportion of debts in the company to assess the financial
risks associated with it. If the company is taking excessive debt it may cause the company to
decrease their profits and shareholders may decide to remove their investments in the equity
share capital. In the present case of UK Care ltd company shareholders are required to analyse
the performance of company and its operations. It could be interpreted from the income
statements of company that there is fall in the business revenues of residential care from the

quarter 1 but as compared with the quarter 1 of 2017 it has shown an increase in the current year.
This could be interpreted from the information and increasing trend that it is showing growth as
compared to last year. There is a increase of 5.8% from last year. The growth may be seen due to
the success of new policies and strategies for increasing the sales of business. Shareholders can
see that the EBITDA margin in residential care has gone down from last year and also from the
1st quarter.
This is also analysed that the overall revenues are increasing of the group. There has been
growth of 7.9% from last year in the revenues of company. Adjusted EBITDA of the company
has increased from last year. The decrease may be seen due to success of the new policies for
reducing the costs and increasing the productivity of company using the available resources.
Shareholders can show residential department has not shown increase but the health care
department has improved the performance since last year. Attention is required to be given in the
residential department for improving the EBITDA in the business. The start up losses of
company have increased from last year.
Company is required to control the start up losses as this is decreasing the earnings of
company. Care UK ltd is performing well and is showing growth but are required to pay
attention towards residential care of company as the earnings are decreasing even when the
company has made efforts for increasing the revenues and achieved the growth. Shareholders
may have concern about the decrease in performance of residential care as due to this company
will be investing funds for improving operations of business. It should adopt new cost effective
procedures for carrying out the activities of company so that the earnings could be improved.
There is wide range of information available to the users of financial statements for assessing the
performance of company. If company is not showing considerable increase shareholders may
start to withdraw their funds. This reduces the share prices impacting the whole position of
company.
Analysis of Efficiency ratios
Efficiency ratio represents the information about the management of company operations
by its executives. It reflects the capacity to utilise existing resources for generating revenues and
increasing profits. This is required for company to be successful and achieving its objectives
getting the positive outcomes. Corrective measures are required for increasing the efficiency of
company in running its operations. Care UK's efficiency will be identified by comparing with

that of the industry averages. Financial occupancy of Care UK is 85% which was 89% last year.
Industry average of financial occupancy is 96%. It could be interpreted that financial occupancy
of company is below the industry average. KPI trend is showing declining trend for financial
occupancy. This is not a good factor for enterprise and this may affect the business. Due to
decline in financial occupancy company may not be able to cover its costs.
The average weekly fee of Care UK is 875 and company has raised the fee by 53 from
last year. However fee charged by Care is lower than the industry average of 910. It should also
raise its prices but it may cause the financial occupancy to fall even low. It should promote the
business for creating brand awareness among the people. This will help in increasing the
financial occupancy of company and also it may raise its fees.
Labour costs to the revenue ratio of Care is 60.7% , this is high as the revenues are not
increasing in same proportion as that of the rise in labour costs. The industry average is 55% and
ratio of company is above the industry average that labour cost is high as against the revenues in
comparison with the other companies. From the trend line it could be assessed that the ratio
shows high fluctuations in the quarters depending on the sales of company. It should not use
excessive manpower for carrying the operations of business. But more focus should be given by
company on increasing the revenues as removing employees is no possible for the companies.
Revenues should be increased by the company using promotional strategies for decreasing the
ratio.
Residual incomes of the company before and after investments.
Company is having capital employed of 600000 with the ROI of 18%.
Income before investment = 600000 * 18%
= 108000
Income after investment
Company is planning to invest in company 250000 having a life of 5 years. The net
profits after depreciation of company will be 22000. Cost of capital of company would be 18%.
Using the investment appraisal techniques for assessing the earnings after investment of
company has used Net present value method.
Computation of NPV
Year Cash CF after PV factor Discounted

inflows
befoe
depreciatio
n
Depreciatio
n @ 18%
cash
inflows
1 22000 72000 0.847 61016.95
2 22000 72000 0.718 51709.28
3 22000 72000 0.609 43821.42
4 22000 72000 0.516 37136.80
5 22000 72000 0.437 31471.86
Total
discounted
cash inflow 225156
Initial
investment 250000
NPV
(Total
discounted
cash
inflows -
initial
investment
) -24844
Interpretation
From this it could be analysed that the residual income after investment is negative. This
means that it will suffer loss from further investment.

Information that is important apart from the ratio analysis for interpreting the financial
statements of company.
Apart from the ratio analysis there are also other important informations that are required
to be interpreted by the financial statement of company. Users should identify the structure of
financial statements, they should analyse the economic characteristic of industry in which
company is operating and the strategies that company carries out for differentiating it from the
competitors. The economic characteristic of the industry should be analysed that requires
identifying the chain of activities involved in the business process (Pham, 2017). Users can use
the trend lines for interpreting the growth and fluctuations in the figures from previous years. It
can also analyse the functions of company and the risks involved in the business. They can also
analyse the financial statements by seeing the variations in its revenues and the growth factors.
The changes in financial statements are directly reflected on the share prices of company,
share prices tend to rise with the rise in company performance. Most commonly trend analysis is
used by experts for assessing the financial statements after ratio analysis. Other techniques
which may be used by the users are horizontal analysis and vertical analysis over the years for
assessing the performance. Horizontal analysis provides yearly comparisons of the performance
of company in different periods (Francis, 2019). Vertical analysis could be used for making
comparisons between different companies,
QUESTION 3
Discussion paper for evaluating use of non- financial and multidimensional model of
performance management
For becoming successful the most important and crucial thing is to manage and evaluate
the performance of the company in effective manner. This is majorly because of the reason that
if the company is continuously working and the performance of company is not increasing then it
is of no use. This is majorly because of the fact that performance management is the process with
help of which the company can ensure that all the business activities are directed towards the
attainment of goals of the business in effective and efficient manner. This performance
management help Care UK in managing its performance in effective manner as this will outline
that whether the company was successful in attaining what they intended to achieve or not.

There are many different types of performance management models and system which
help the company in attaining what they want in the same manner. This is majorly because of the
reason that this help the company in managing the overall performance of the company in such a
way that it attains the overall objective of company. Thus, for this Care UK is going to make use
of non- financial performance management and multidimensional model of performance
management. The non- financial performance management is a technique which does not include
money as the measure of analyzing the performance of Care UK. Rather some non- financial
methods of performance management system and tools are being used by the company for
managing its performance.
There are many different types of performance management system through which Care
UK can evaluate its performance and this can be without involving money as a base in
comparison. The major non- financial performance management is the brand image of company
and the goodwill in the market. This is a good source of performance evaluation of Care UK
because the image within the market will highlight value of company in the eyes of consumers.
If the image of company is good within the market, then the consumer will like go to Care UK
for taking medical assistance. If the consumers are happy in going to Care UK, then it can be
said that the company is performing in effective manner.
Another measure of non- financial performance management is to analyses the consumer
experience and consumer retention for Care UK. This is also a good method of evaluating the
performance of Care UK. This is majorly because of the reason that if the consumers are happily
going to Care UK for getting the treatment then it is concluded that Care UK is performing in
good manner. Thus, this states that the company is much preferred by consumers and it is liked
by the consumers and it can be stated that the performance of the company is very effective and
it is liked by the consumers to a great extent.
One more type of non- financial measure of analyzing the performance of Care UK is the
innovation and creativity which the company is bringing in its method of treating the patients
coming to the place. If the Care UK will use different types of innovation and bring creativity in
the process of treatment and care which is being provided to the patients coming to Care UK.
Thus, these non- financial performance management are a good method of evaluating the
performance in order to manage and improve the performance of the care home.

Other then the non- financial performance Care UK can also use the multidimensional
models of performance management which are helpful for Care UK in managing and evaluating
the performance (Wang, Broach and Yang, 2018). The multidimensional model of performance
management are the models which are applied within the Care UK in order to manage the
performance of the company so that they can gather relevant information and practice in order to
improve the performance to a another level. There are many different types of multidimensional
performance management model which can be applied by Care UK in order to improve the
performance of company. The most common multidimensional performance model is the key
performance indicators. This is a method of evaluating the performance of the Care UK by
keeping some common factors as base and comparing the present performance with the past
performance. For instance, Care UK uses different KPI that is key performance indicator like
number of beds, financial occupancy, direct labor as percentage of revenue, average weekly fee
and many other different indicators. In this method the number of beds in current year are
compared with the previous year and if the current number of beds are high then it means that the
performance of the care home has increased. This also suggest that the number of beds has
increased and this states that the number of patients has also increased and indirectly it means
that the number of patients has risen.
One more multidimensional model of performance management is the bench-marking
which is also a good model in evaluating the performance of the company. This is a method
under which the company compares it facts and figures and the volume of profits with that of the
competitors. This is a good source of performance evaluation because of the reason that this help
Care UK in knowing its competitive position in the market and where it stands among the other
competitors. This is majorly because of the reason that the bench-marking help Care UK to
compare its profit of a year with that of other competitor. Thus, this will help Care UK in
analysis the deviation of profit of them with that of the competitors, and also what are the major
cause of the deviation. Also, there can be many other basis on which the company can compare
its performance with that of the other competitors. This bench marking can also be used by Care
UK in comparing the performance of the employees within the health care setup only. This will
improve the performance of the employees within the healthcare setup because when the
performance of the employees is being compared then the employees are being motivated to

work in more effective manner such that their performance is better as compared to the other
employees in the same setup.
One more different multidimensional model for performance management of Care UK is
variance analysis. This is also a good method of evaluating and analyzing the performance of
Care UK (Xu, Yuan and Xu, 2017). This is majorly because of the reason that under this method
some standards are being set and the performance of the employees are directed towards the
attainment of that standards. After the performance is done then it is compared with that of the
standards made. Thus, if there will be deviation among the standards set and the actual
performance made by the employees then Care UK need to take some measures in improving the
performance of the company.
CONCLUSION
In the end it is summed up that for becoming successful it is necessary for the company
to have effective use of performance management. This is because of the reason that this
performance evaluation will tell the actual position of the company in which currently the
company is operating. This is majorly pertaining to the fact that this will help the company in
improving the position of the company in future and in comparison with the other competitors.
Thus, the present report stated that the two model which can be helpful for strategic planning are
gap planning and strategic mapping. Further usefulness of financial analysis for shareholder
along some calculations was done. In the end the use of different non- financial performance
management was done like consumer, goodwill and brand image. Along with this
multidimensional model of performance management was also used like KPI, bench-marking
and others.

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