Sample Paper on Quantifying the Quality Performance Gaps

The chapter gives a description of performance measurement in an organizational setting. Performance measurement in this regard is ambiguous in definition and utilization across different organizational settings. The concept of performance measurement has been misunderstood as most organizations focus on financial performance measurement without consideration of the quality implications. As focus is kept on finances, the quality suffers hence the need to effectively define the performance measures in an organization. The objectives of the chapter therefore comprise of defining performance measures, describing the process of performance measure selection, distinguishing between quality and financial performance measures and identifying the relationship and equilibrium between quality and financial performance among other objectives. In all these objectives, the chapter emphasizes the importance of measurement, performance expectations and the quantification of the performance gaps in quality.

In addition to the descriptions of the different concepts in performance measurement, the chapter also presents the concept of business performance measurement (BPM). The role of BPM was described as including performance measurement, strategy management, learning and improvement, behavior modification and communication. Each of these aspects may be challenging to distinguish between performance from a quality perspective and performance from a financial perspective. While long term financial viability is an essential part of any successful business, it is to be noted that there is need to distinguish between financial and general performance measurement. With growing business complexity and sophistication, every organization faces periods of change and shifting priorities. This calls for consistency in changing the business models towards strategies that foster sustainability. Organizations therefore have to focus on how to ensure long term business viability, which may at times result in losing out on the financial objectives.

In the past, decline in the product quality due to focus on the financial goals of the company, has resulted in eventual decline in financial performance. This is also exemplified by Abduljawad and Al-Assaf (2011). The question therefore becomes, “how best can a company balance between financial and quality objectives?” In the chapter, an iterative 8 step process for attaining this balance has been described. The process begins with the identification of performance measures, indicators and performance metrics. Performance measures help to identify the specific quantities attributed to either financial or quality performance. The financial performance metrics are related to financial indicators and to the interactions of organizational strategy and reporting. Measuring success based on quality metrics on the other hand, requires the consideration of outcomes with regards to progress towards quality measurement. An organization that desires to be considerate of quality performance indicators as a performance measure should ensure that they meet the general performance measurement requirements.

The chapter also presents other concepts such as linking financial and quality performance by examining the impacts of quality measures on other key performance measures, and finding the equilibrium between finance and quality outcomes. With the link between quality performance and financial performance, it is inevitable that changes in one area would cascade into the next area. Additionally, the assessment process for quality performance is described through a consideration of different concepts including misuse, overuse and underuse of resources. By using a healthcare facility context as the organizational example for quality and financial performance measurement, the chapter gives a clear perspective of the relationship between quality performance and financial performance. Further discussions of the importance of creating a link between organizational values, mission and vision and the case of quality performance are presented. In conclusion, the chapter proposes that organizations should create a quality focus and establish quality performance targets that will consistently motivate quality improvement.



Abduljawad, A. & Al-Assaf, A.F. (2011). Incentives for better performance in healthcare. SQU Medical Journal, 11(2), 201- 206.