Performance Measurement in Facilities Management: A Literature Review

This report provides a comprehensive literature review on performance measurement within facilities management (FM). It explores the evolution of performance management and its significance in FM, highlighting the benefits such as customer satisfaction and benchmarking. The report delves into key concepts like the balanced scorecard, detailing its perspectives (learning and growth, internal business processes, customer, and financial) and its application in FM. It also discusses benchmarking as a crucial technique. The report examines critical aspects of FM performance measurement tools, including the importance of linking data with business-related information. Overall, the report underscores the need for effective performance measurement systems in FM to improve efficiency, manage costs, and align FM activities with organizational goals.

Facilities Management
Performance Measurement

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................2
Literature review on performance measurements in facilities management..........................2
Balanced scoreboard...............................................................................................................3
Benchmarking as a technique in facilities management performance management..............9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................11
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INTRODUCTION
Over the past few decades the nature of performance measurement has changed.
Performance management is the quantification about how well activities in a process or the
outputs of a process achieve a particular goal (Liu & Regan, 2014). As a result of having proper
performance management system the four potential benefits such as customer-satisfaction,
monitoring progress, benchmarking activities and bring change etc., can be achieved. In this
report a literature review will be conducted on performance management in facilities
management organization. In order to monitor facility management service provision, the critical
evaluation of the FM performance measurement tools will be done in this report.
Literature review on performance measurements in facilities management
According to Behrouzi, Shaharoun & Ma’aram, (2014), within the organization
“facilities” create environments for occupants to work effectively and the activities that is being
carried out is influenced by the performance of these environments. In terms of quality, cost and
effectiveness the formulation of techniques that are capable of assessing facilities managements
is critical for advancement of facilities management. As per Bititci & Nudurupati, (2015),
facilities management (FM) can be defined as integrated approach that can be sued to operate,
maintain, improve and adapt the buildings and infrastructure of the organization. It is being done
to develop an environment that supports strongly the primary goals of the organization. In order
to provide vital services in support of the organization FM can be seen as a hybrid management
discipline that combines people, property and process management.
For the occupants of a facility the environment that is developed influences the
performance of the activities that is conducted in that facility. In accordance with the response to
external pressure the emphasis on promoting satisfaction among customers and driving change
from an increasingly global competitive market. The culture promoting continuous improvement
is a clear refection of monitoring progress and benchmarking that is driven form both outside and
within the organization. In context of the organization as stated by Chiarini & Vagnoni (2015)
the development of performance managements is essential as it set the background against senior
management in the organization. In fulfilling the corporate objectives, it will analyse the current
performance and contribution of their facilities services. There has been growth in the acceptance
of performance management. By recognizing FM as a business resource the need for FM
performance, measurement system has already emphasised. In the organization the budget of FM
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can often need about thirty to forty performance total expenditure of the organization. In FM
therefore good performance is important. The FM performance measurement is no longer
rejected by FM managers as per De Wilde, (2014). In order to facilitate performance
measurement a number of different approaches have been developed. Some of them are
operating cost and benchmarking, BIFM measurement protocol, Post- Occupancy evaluation etc.
On either technical or financial aspects, the focus of most of the facilities performance
measurement techniques are there. About the reasons for performance indices and performance
measures the most of the facility related measurement tools lead to a great confusion. A link
between data and business related data is needed for assessment of facilities performance in an
integrated manner.
Balanced scoreboard
According to Lee,Lam & Lee (2015), in the facilities domain business performance
measurement concepts such as balanced scoreboard will be and valuable tool. With operational
and softer customer and staff issues the balanced scoreboard integrates traditional measures of
finances. In business and industry, government and non -profit organization the balanced score
cards are a strategic planning and management system that is been used extensively. Against the
strategic goals that is been set this tool will enhance the both internal and external
communication and also keep track of the performance of the organization. A balanced view of
the performance of the organization will be given. From its early usages as a simple performance
measurement framework the balanced score card has evolved to a full strategic planning and
management system. As per Liu & Regan, (2014), the vision and strategy is being certified by
the organization by making use of a balanced score cards and into the action it is bee translated.
Around the business process and external result, it provides feedback. This is being done in order
to enhance the strategic performance and outcomes. When the companies that operates in an
integrated facilities management the balanced score card connect corporate work as well. In the
information age if the company is to survive and prosper the management system need to be sued
by them that is been derived from their strategies and capabilities. In communication this score
board can be used. In the balanced score board there are four perspectives they are as follows-:
Learning and growth perspective – The infrastructure is being identified by the learning and
growth perspective. The long term growth and improvement need to be built by organization.
The people, system and procedures of organization are the three principle sources if organization
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learning and growth as per Love & Olatunji, (2014).The training of employees and corporate
culture attitudes is also included in this perspective. The main resources in a knowledge work
organization are the people which is the only repository of knowledge. For the knowledge
workers it is been becoming essential to be in continuous mode of learning in the current climate
of rapid change in technology.
Internal business process perspectives – In which the organization excel the internal business
process perspective recognizes the process of internal business. As stated by Parida & Stenström,
(2015), based on these perspective the metrics help the managers to know about how well their
business is running and also the customers’ requirements are being confirmed from their
products and services. By the ones who know the process carefully these metrics have to be
designed by them.
Perspective of customers – As per Upadhaya, Munir & Blount, (2014), the customer and
marketing segment in which the unit of business will compete will be recognized by perspective
of customers and in these targeted market it will ensure the performance of business unit. They
are the leading indicators. In case the customer is not satisfied they will look for other suppliers
that will meet the needs of customers.
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(Source: DEPARTMENT USING BALANCED SCORE CARD, 2017)
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Illustration 1: Balanced score board card

Financial perspective - To the bottom line of important it will indicate whether the strategy of
compels is contributing or not. Related to profitably the financial objective are being measure.
Around the four perspective the balanced scoreboard concept is been build. As per Love
& Olatunji (2014), they are customer, internal process, learning trend growth and financial. A
balance between short term and long term perspective is been balanced by the four perspective of
the scoreboard. The performance measurement structures are being set up by the balanced
scorecard approach. With some of the characteristic such as customer focus, usage of
information to manage etc., it will help the organization. In the facilities domain BSC would be a
valuable tool. According to Upadhaya, Munir & Blount, (2014), for external purpose of balanced
scoreboard a set of generic objectives and key performance measures are been there for
benchmarking purpose the balanced scorecards. For internal purpose the objective is been set by
balanced scoreboards that is specific to the individual of FM organization and against those
objective KPI is used to measure the level of achievement. For each KPI the facilities manager
will define the strategies. By which the objectives will be achieved the facilities manager will
document strategies and tasks. For each strategy and task facilities manager will fix
accountability among people. Reh (2017) has stated KPI to be one of the most effective tool used
for measuring the performance of not only the employed workers in an organisation, but together
assists in measuring the overall performance of the establishment. This is usually being done by
considering its 4 vital metrics namely financial, customer, process and people. On whose basis,
FM enterprises can easily measure their profits and cost, etc. Whereas, the customer metrics is
apparent to help in measuring the total number of customers along with their retention and
satisfaction level. The process matrix consists of such parameters that help the firms to measure
the efficiency of their undertaken procedures as a way of addressing any defects and resolve the
same. Lastly, the key indicators of people metrics are more concerned about the employees and
their satisfaction as well as turnover ratios, etc. Although, Jackson (2017) have enlightened yet
another fact where the key indicators of all above specified metrics can be customized as per an
organisation’s specific area of concern. The most basic agenda of KPI is to act as a compass and
guide the enterprise to choose the right path for the achievement of their set goals. For this
purpose, the KPI should be quantifiable in nature as well as well-defined for an easy
understanding of all involved bodies. Also, it must be communicated at all organisational levels
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with key pointers matching the line of departments for a timely accomplishment of their set
objectives.
Recently in the area of performance measurement the companies have paid more
attention. As competitive issue the performance is regarded. In context of facilities management,
a wide range of choices is available that will measure the facilities management performance.
This will reflect a varied nature of field. In the areas that contribute towards the overall
management of business the attention of skills and techniques of FM should be there. As stated
by Van Horenbeek & Pintelon, (2014), the achievement of goals and connective is one of broad
purpose of performance measurement. The other two purpose of performance measurement is
the to analyse, control and enhance the procedures and processed and of different organization,
teams and individuals to compare and assess the performance. By relating accommodation and
support infrastructure issues to business, finance the attention of facilities management skills and
techniques is in the area that provide overall management of the business.
To the facilities manager therefore the issue of measuring facility performance is a
critical task. In order to assist management decision making there is a need to assess
performance. In FM context performance measurement is applied to management. Within an
organization performance management is a driver to the process of innovation. The physical,
functional and financial are the three components of the measurements of facilities as per
PERFORMANCE MEASUREMENT IN FACILITIES MANAGEMENT; STATE OF
KNOWLEDGE, (2017). To the behaviour of fabric of building the physical performance is
related and structural integrity, heating, lightening, energy efficiency etc are embraced in
physical properties. With the occupiers, the functional performance concerns the relationship of
the building. The space, image, ambience, communication etc are being embraced by functional
performance. From the physical and functional performance of the building the functional
performance arises and recurrent expenditures, capital, depreciation etc are embraced in financial
performance.
According to Behrouzi, Shaharoun & Ma’aram, (2014), over a wide range of critical such
as hard metrics of finance and economics the contribution that is been made by FM in the
organization will be judged by stakeholders. In many ways the FM is able to contribute towards
the performance of the organization. The management of change, strategy, culture, supply chain
management etc., are ways in which FM is able to contribute towards the performance of the
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form. The significant factors that is emerged are quality, value and management of risk. In order
to measure the facilities management performance there is a wide range of choices. In order to
drive effective and efficient measures tools the facilities manager need to be understand the
nature and organization of business.
Benchmarking as a technique in facilities management performance management
This method is not so costly. Out of total quality management the principle of
benchmarking is evolved. In order to gain and maintain competitive advantage it is the most
effective technique that can be used in the business. In order to evaluate the products, services
and work process of organization the benchmarking method is defined as a continuous,
systematic process. For the purpose of improvement in the business it is been identified as the
best practices. As stated by Valmohammadi & Ahmadi, (2015), a performance measurement in
facilities management benchmarking is established well. Within larger organization the
application of benchmarking to facilities management criteria of performance is now common.
In order to set goals of corporates and modifying them into tangible that is delivered to the end
customers it is the ideal role. Around 1984 when the international facilities management
association stated to gather data on trends of facilities and demographics then the benchmarking
within facilities management began. By financial, organizational. Change management and as
per the needs of customers the facility management benchmarking issues are driven typically.
They can be focussed internally or externally driven. The reassure on FM team is been put to pay
attention on customer driven issues. They pay attention on quality and timely service. In the
context of benchmarking people mainly thinks that benchmarking is all about comparison of cost
levels. As per Upadhaya, Munir & Blount, (2014), the various aspect of FM can be benchmark.
Some of them are as follows-:
Use of space – All the cost of premises and the area of floor that is need to be known is driven by
the benchmark the space use. In order to know the purpose of comparison cost of maintenance
etc.
FM management – On a strategic and tactical level bench marketing is thee effective and cost of
operations of facilities management.
Computer aided FMS – The cost and effectiveness of the help desk is being benchmarked.
Between delivery of service and satisfaction of customers the emphasis is been made to measure
the performance gaps.
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Facilities management procurement options
According to Behrouzi, Shaharoun & Ma’aram, (2014), FM is not any easy process it is
been made of many stakeholders that are linked to form together integrate service. To being the
catalyst, stating that quality of the tender documents it is at this point that procurement executive
will stake their claim. The key drivers for change are pricing structure and the process of
evaluation. The change will be effected by procurement team so that they could understand what
they are procurement and difference between price and value can be done. The best value is not
always presented by the lowest process. Through procurement the driving change mean that they
understand the strategy of the property management team and the pricing documents is
developed that focused on the delivery of the strategy. In the process of procurement, the
procurement outcomes are set, the people who are involved are decided, the current services
provision are reviewed. through procurement buying clubs an increasing volume of public sector
FM contracts are going. The standards terms and conditions are there that could include resource
efficiency targets in their organization.
CONCLUSION
In a variety of organization, the performance measurement has taken on renews
importance. In terms of effectiveness, efficiency and adding value the performance measurement
in context of facilities management makes an essential contribution towards success of
organization. In measuring facilities service performance, the technique benchmarking can be
applied.
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REFERENCES
Books and journals
Behrouzi, F., Shaharoun, A. M., & Ma’aram, A. (2014). Applications of the balanced scorecard
for strategic management and performance measurement in the health sector. Australian
Health Review, 38(2), 208-217.
Bititci, U. S. & Nudurupati, S. S. (2015). Value of maturity models in performance
measurement. International journal of production research, 53(10), 3062-3085.
Chiarini, A., & Vagnoni, E. (2015). World-class manufacturing by Fiat. Comparison with
Toyota production system from a strategic management, management accounting,
operations management and performance measurement dimension. International Journal
of Production Research, 53(2), 590-606.
De Wilde, P. (2014). The gap between predicted and measured energy performance of buildings:
A framework for investigation. Automation in Construction, 41, 40-49.
Lee, P., Lam, P. T. I., & Lee, W. L. (2015). Risks in energy performance contracting (EPC)
projects. Energy and Buildings, 92, 116-127.
Liu, J. & Regan, M. (2014). Conceptual framework for the performance measurement of public-
private partnerships. Journal of Infrastructure systems, 21(1), 04014023.
Love, P. E. & Olatunji, O. A. (2014). A benefits realization management building information
modeling framework for asset owners. Automation in construction, 37, 1-10.
Parida, A. & Stenström, C. (2015). Performance measurement and management for
maintenance: a literature review. Journal of Quality in Maintenance Engineering, 21(1),
2-33.
Upadhaya, B., Munir, R., & Blount, Y. (2014). Association between performance measurement
systems and organisational effectiveness. International Journal of Operations &
Production Management, 34(7)Upadhaya, B., Munir, R., & Blount, Y. (2014). , 853-875.
Valmohammadi, C., & Ahmadi, M. (2015). The impact of knowledge management practices on
organizational performance: A balanced scorecard approach. Journal of Enterprise
Information Management, 28(1), 131-159.
Van Horenbeek, A., & Pintelon, L. (2014). Development of a maintenance performance
measurement framework—using the analytic network process (ANP) for maintenance
performance indicator selection. Omega, 42(1), 33-46.
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