Performance Improvement and Management in Health & Social Care Sector

This report provides an analysis of performance improvement and management strategies within the health and social care sector, using Arden Mountain Nursing Home as a case study. It explores the application of performance management tools such as the Balanced Scorecard (BSC) and PESTEL analysis to enhance organizational performance and achieve strategic objectives. The report recommends the use of the BSC tool to monitor financial performance, customer satisfaction, internal processes, and growth & learning. Additionally, the report includes a DuPont analysis to evaluate Arden Mountain Nursing Home's Return on Equity (ROE), identifying areas for improvement in total margin and asset turnover. The analysis suggests that while the organization's ROE is higher than the industry average, there are opportunities to optimize asset utilization and financial management for sustained success. Desklib offers a variety of solved assignments and past papers for students.

PERFORMANCE
IMPROVEMENT AND
MANAGEMENT IN
HEALTH & SOCIAL CARE

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................1

QUESTION-1
Performance management can be defined as a tool which enables an entity to manage
and control its performance and evaluation of the work so can pave way for organizational
success. For an organization just performing its business activities is not sufficed, they are
having need to evaluate their performance on regular interval so if gets any discrepancy, can go
for mitigation and improvement (Schleicher, Baumann, 2018)
Strategic planning is the process where an entity defines its mission, vision for it is
striving and how it would be achieving them in the future would be clarified in the performance
management. At the same time here on regular interval progress of the plan is also taken into
consideration. Tactical plans are those where what is strategic goal is defined, operational plans
decipher the operational aims and tactical plans are about actions or events to reach certain point.
Arden Mountain Nursing Home which is leading healthcare organization, with the
mission “ a commitment to excellence in long term care for adults globally” (Ahenkan,
Tenakwah and Bawole, 2018) It wants to expand the operations in UK so can work with wider
diaspora. The vision of the entity is “to achieve the highest possible level of person centred care
in a home”. Arden Mountain nursing home is very ambitious and wants to widen its operations
so the vision of longevity may be achieved with only a suitable strategy.
To achieve the mission and vision of the organization it is essential to have a well-
structured performance management system which enable it to escalate performance and
eradicate all potential bottlenecks in attempt to make the mission, vision feasible. Performance
management helps to measure performance of the entity, considering various dimensions.
Performance measurement is the process to evaluate the performance of the
organization. It aids to understand the performance of the organization in numeric form. Which
paves way to understand the areas where improvement can be imparted in order to achieve the
mission and vision of the organization. The vision of Arden Mountain nursing home is to expand
its business in UK and providing at least five facilities in the nation, which is only possible with
proper monitoring of the performance (Chen, Jagota and Kumar 2021)
Arden care home is engaged in healthcare sector where providing the best quality is the
only way to secure positioning in the market. A minute mistake may bring severe repercussions
to the entity. There are a range of such performance management tools which can be used by the
organization.
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Balance score card-
Balance score card is a performance management tool which is used by various entities to
understand the status of their performance. This is very helpful to identify and hike their internal
practise. BSC is a very affective tool since for hiking external outcomes of the organization is
aids to make needful changes for further improvement. The tool is very diversified and present
proper picture of performance management. Since for all key aspects there are some indicators
and measurement techniques used.
In this tool there are four aspects which are taken into consideration. These perspectives
are financial, customer, learning and growth, internal process. It believes that for improvement of
the performance of the organization these four aspects are very promovent and if they are not
given proper attention then an entity can not grow.
Advantages-
 It gives a proper structure to the strategy of the organization and clarify all key aspects
we here they have to pay attention (Radu-Alexandru, 2019)
 It helps to ease the communication process among all key aspects, cause the elements of
the model are articulated clearly which eradicate possibility of malicious communication.
 Paves way to connect individual aims to the aims of the entity.
 All four elements get managed property due to giving separate attention.
 The best part of the tool that it gives special attention to growth and learning which is
very essential for performance management.
Disadvantage-
 It is having need to be tailored as per the needs of the organization.
 The model presented by BSC is very complex in nature and may raise some difficulties in
practical application.
 For carrying out BSC it needs to have too many data then only it can be successfully
executed.
 It is having strong model of leadership since the model can be used by only changing the
form or tailoring it so in absence of proper leadership model it would not foster much to
the entity.
PESTEL-
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It is the tool which aids the entity to perceive all external factors which may affect the
operational efficiency of the entity. These factors play severe role in accomplishment of the
organizational goals. This model is generally used to understand external environmental aspects
which are having potential to affect the operations of a business (Helmold and Samara, 2019)
Advantages-
 In healthcare sector where a lot of factors affect the performance of the entity can be
evaluated with the help of the tool.
 It gives simple understanding of the framework. All key elements such as political,
economical, social, legal etc., are articulated so organization can make better decision to
cope up with the threats.
 The entity can articulate factors which may bring opportunity or threats to them, because
all elements of Pestle are broadly discussed and while elaborating them, their positive and
negative aspects are considered.
 All key stakeholders are getting assessed which makes the task of improvement in
performance easier.
Disadvantage-
 It depends on the users that how they decipher the market information since it provides a
great range of information to them.
 Use of pestle tool may drive the attention of the entity from internal factors to external
factors, Quality external information may hinder the way to see internal information.
 Access of data may affect the decision-making process. Over data may also drive to take
wrong decisions.
 This process in having need to be practised on regular basis which needs higher cost and
time investment.
 In the care sector the cultural and social aspects are very dynamic so PESTEL model is
having rigorous need to dive deeply, otherwise it may harm the entity and its purpose to
serve the strategic aims (Bianchi, Winch and Cosenz, 2018)
The directors of Mountain nursing home are suggested to abide with BSC tool. This tool
of performance management will be very helpful for the entity to practise. The organization is
engaged in healthcare sector which is very sensible, here all key parties are needed to be given
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proper attention, with this respect the tool offers a great diaspora to cover up all the aspects and
extend services which foster the operations (Tseng and Levy, 2019)
The organization is already serving with greater emphasis and wants to be leader of the
sector, so for enhancement of business operations it is inevitable to restrict finance. In modern
era of business hyper investments are needed, at the same time proper management of funds is
also needed which is only possible with BSC tool. One of the key component in the model is
finance. It gives rational attention to finance factor which is ultimately behind performance of
Mountain Nursing Home.
The customers are mainly patients who are looking for home nursing services. Such
customers are having rigorous need to be taken care in proper way which can drive higher
satisfaction to them. BSC specifically consider them, and with the help of pre decided standards
their satisfaction is measured, If there are some discrepancies then with encountering actions it
can be countered.
The mission of Arden Mountain Nursing House is to make the business thrive in long
run. It is not possible without strong internal management. BSC is a hybrid nature tool, along
with external factors it pays proper attention to the internal aspects of the organization.
Efficiency, quality, performance of the entity and where they are legging behind can be traced
here, which supports to inculcate something better to hike performance.
The best part of this tool is, it accentuates on Growth and Learning. Arden Mountain
nursing house is the entity which is very ambitious in nature, and desires to be a leader in the
market with higher performance. So both growth and learning factors are taken into focus by
application of the model.
All other performance management tools or models are also having their some
advantages yet the entity is having its different set of qualities and market status which raises
need to go with BSC. The chosen model would be in profit of the entity since Arden mountain
nursing will be able to meet its organizational requirements. Now the expenditures are very high
which are restricting the entity to perform going beyond its brim of potential so the application of
BSC would be channelizing expenditures.
As the financial accounts are suggesting there are sufficient amounts of retain earnings
with the Arden Mountain nursing house, but in absence of proper structure and strategy it can not
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be used to fulfil the requirements of the entity. Here, the management is recommended to
practise with balance score card technique of performance management.
QUESTION-2 1000
a)
Dupont analysis is a tool which is used to analyse the performance of an organization. It
considers different drivers of ROE, which are deciding the direction and degree of ROE factor. It
is very essential to analyse the strengths and weaknesses of the entity. For shareholders knowing
the financial and investment related aspect is essential so with this regard this analysis helps
them to decipher various aspects of the entity. For Arden Mountain nursing home there were four
such elements have been traced which are affecting their ROE (Liu, Wu and Li, 2022)
Total margin-
(net income/total revenue)
The formula shows that what is percent of income with relation to total revenues generated by
the entity.
For the industry total margin is 3.5% at the same time for the organization it is 1.77% which is
very lower than the performance of the industry. It shows that there is high possibility of lower
ROE due to lower margin.
Total assets turnover-
(Net revenue/total asset)
This ration shows that how effectively the assets are used in order to generate profit for the
organization (Victoria, Suarez, 2018)
For industry, it has been 1.5 but for the entity it is 1.3. Here it can be deciphered that there is
need to improve operations since the industry is generating more with the same amount of assets.
It may take the ROE down in the future for Arden Mountain nursing.
Equity multiplier-
(total assets/total equity)
The ratio presents a comparison between total assets and part of equity which is being used to
generate revenues for the organization.
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Healthcare industry of UK is generating around 2.5% on the other side for the Arden Mountain it
is 6.99%. it shows that the size of assets as compares to equity is higher for the organization as
compares to the industry.
ROE-
(Net income/Shareholder's funds) (Islami and Rio, 2019)
The ratio is very essential since it discloses the percentage of net income against total
shareholder's funds. The application of Dupont analysis is not possible without the ratio, and
further it is very prominent for investors too, for making investment related decisions.
For industry, it has been 13.1 but for the organization it is 16.1. which is a positive
symbol and shows that the performance of the entity is going well when it comes to their ability
of utilization of funds in proper way to hike the revenue and surging ability of funds to pour on
higher.
By applying the dupont tool it is found that the organization is having some areas to go
for improvement but at the same time overall performance is very satisfactory. ROE which is
centre of the entire analysis notching up higher than the average of industry, it is a positive sign.
The analysis is having a great range of usefulness since for shareholders to know actual status of
organizational performance is only possible with the help of dupont analysis. The final outcome
which is ROE, has been higher than the average of the industry (Bills, 2021)
b)
1. Return on assets-
ROA=(net income/total assets)
=57881/2502992
=2.31
The formula shows relationship between net income and total asset of the entity. It was 5.2% for
the industry and for Arden Mountain nursing home it has been 2.31, which is very lower than the
average.
2. Current ratio-
=(current assets/current liability)
=608992/445150
=1.36
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The ratio deciphers proportion between current assets and current liability. For the industry it
was 2 but the entity is having 1.36. It shows that for paying current liability organization is not
having much higher amount.
3. Days cash on hand-
=(cash on hand/(operating expenditures-depreciation)*365) (Tarapoulouzi, Skiada, 2021)
=105737/2973585-85000×365
=13.36
The ratio shows that for how long the cash has been in the hands. The average of the industry
was 22 days and for the organization it is 13.36 days which is lesser so having need to improve
it.
4. Average collection period-
=(365/accounts receivable turnover ratio)
=accounts receivable turnover ratio=(net credit sales/average accounts receivable)
=3163258/215600
=14.67
=365/14.67
=24.88 days.
It depicts efficiency of the organization in term of conversion of their debts. For the industry it
was 19 days but for the entity it was 24.88 days which shows that it is having need to improve
ability to turn credit into cash.
5. Debt ratio-
=(debt/total assets) (Güleç and Bektaş, 2019)
=2145150/2502992
=85.70%
The ratio describes relationship between debt and total assets. Here for the sector it was 69% but
for the entity it is 85.70%.
It is reflecting that the organization is depended more on the debt rather than using equity or
owner's funds for carrying out operations.
6. Debt to equity ratio-
=(current liability+long term liability)/equity funds of the organization)
=445150+1700000/357842
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=4.87
This describes relationship between outsider funds and owner's funds in the organization. For the
industry it has been 2.5 but for the company it is 4.8 which shows that the organization is
depended more on debt part. If the entity is generating great amount of profit then it is often seen
that they rely on debt funds due to lower cost of this source.
7. Fixed asset turnover ratio-
=(net sales or net revenue/fixed assets)
=3269404/1894000
=1.72
The ratio shows the performance of fixed assets, how efficiently they are being used in the
organization to generate revenues.
As it has been seen above that for industry it was 1.4 and for the company it has been 1.72 which
shows that the organization is using their assets more efficiently that's the reason of their higher
revenues on the fixed assets.
From the ratio analysis above it can be said the performance of the organization has been
balanced. Since in a few areas it is having scope to go for improvement as compares to the
industry at the same time in remaining areas having better performance. It was found that the
entity is more depended on the debt part and using it to the fullest extend and having need to
improve its collection process since having problems in collecting receivables from the deters,
further it has been seen that current ratio of the entity is not much good as it is known that it must
be 2:1, which is considered standard but for the organization it is around 1.36:1 (Walmsley,
2018) it is matter of serious contemplation.
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QUESTION-3 1500
Performance evaluation models are now unavoidable need of the organizations. Arden
Mountain nursing house which is engaged in medical services in UK, having speciality to
provide better quality services at home. Healthcare is getting higher priority by people due to
their raising health consciousness. As the entity has already disclosed its vision and mission to
make strong place in the market. There are multiple types of models such as non financial and
multi dimensional. The usefulness of the models is to help entity to manage their performance
and if they find any mismatch then may for betterment (Narkunienė and Ulbinaitė, 2018)
Non financial models of performance management refers to the models which assists
entity to evaluate its non financial outcomes. It consists outcomes such as hiked loyalty of
customers, goodwill in the market, quality escalation, betterment of the society cause main
purpose of health care it to enlighten health measures of people etc. it includes conversion rate,
retention rate, contract volume etc. which are the best non financial models.
Multidimensional models of performance management are the models which stand for
the notion which believes that different areas of organizational performance must be evaluated. It
paves way to form better policy or strategy to make the organizational goals achievable. BSC is
one of such multidimensional model of performance management which enunciate different
elements of organization such as finance, learning and growth, customers, internal operations
(Zanardo, Siluk, 2018)
Balance Score card is a tool which is used for performance management of an
organization. This tool is very much helpful since in this model four key elements are taken into
consideration. For all four factors different aims are set up and some key performance indicators
are used to measurer their progress at certain point of time. Arden Mountain nursing is engaged
in healthcare sector so having need to know it's all dimensions very well.
The biggest advantage of the model for Arden Mountain Nursing Home will be perceiving all
key areas of the entity. In the healthcare there is higher need of quality augmentation, with higher
performance an entity can survive in the market. The model is very helpful since it presents a
wide diaspora of all essential elements such as finance, internal operations, growth and learning
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etc. other models are not having this ability to cover up all key elements, it also gives
prominence to learning and growth factor which makes the task of achieving vision in this
drastically changing market environment (Izquierdo, Lezama, 2018)
On the other side the model has been seen as perilous since it needs higher amount of
data, then only it can be practised successfully. All key elements are given proper attention and
for them, a mammoth amount of data is collected, key performance indicators are decided so in
this process if any jeopardy takes place then ultimate results would not be absolute. At the same
time it needs to be practised continuously, since all the dimensions are having their different
level of importance which presents a bigger challenge before the entity.
Another advantage of this would be properly maintained scorecard works as superior
base for the discussion business challenges for Arden Mountain Nursing Home in which it shows
how the company respond to them. While, it works on three levels of abstraction in which there
are many drawbacks for these where it works on abstraction level only. For the list of goals, it
won't be engaged with company mission and also won't quantify. By using three level horizons
the ideas needs to connected with performance indicators and specific goal. In this the balance
score card allows working on three levels of abstraction which includes the mission and vision,
strategic priorities or themes, goals and initiative action plans.
In such situations there are disadvantages such as it is hard to keep everyone on same
page while organization manager the scorecard on excel and power point and ends up throwing it
away. Apart from this, it may appear too rigid for managing, transformation to a balance
scorecard process creates confusion I the organization. Moreover, taking the time to understand
there are some leaders make judgements for quitting the balance score card and return to old
methods (Dinnik, Grigoryeva and Galoyan, 2019).
Performance pyramid
It arrives from the idea at that organization operates in different levels each with a
different focus, these levels helps each other and the pyramid connects the business strategy with
daily operations. It is believed that the performance management focus on financial performance
which is not bound with organization operation or business strategy. Whereas focusing on the
financial performance indicators, performance pyramid concerns the two major objectives such
as internal and external effects. In the top-level and corporate level the organization objective is
been developed which the financial objective and market objectives are set. Organization can
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