Fitzgerald and Moon’s Building Block Model suggests the solution of performance measurement problems in service industries. But it can be applied to other manufacturing and retail businesses to evaluate business performance.
Fitzgerald and Moon has provided a framework for performance management in service organization using three criteria, called as building blocks, they include, standards of performance (against these dimensions are measured to review performance), rewards for performance (rewards are necessary for achieving standards of performance) and dimensions of performance (these are measures of performance).
1. Standards: You can think of standards as rules that employees of a company must follow in order to achieve the long term objective of the organization. For the standards to be motivating enough, it must have three important ingredients. These ingredients are;
- Equity: Performance measures should be equally challenging for all parts of business. Relaxation given to one part of the business leads to perception of unfair treatment which hinders productivity.
- Ownership: Performance measure should be acceptable to everyone. Employees should be got involved in the identification of measures rather than being imposed on them. Ownership means here is responsibility for the results.
- Achievable: Performance measure should be realistic. Eg. Using actual results for the competitors to set as target. Employee will not be motivated to achieve targets if consider them impossible.
2. Rewards: In line with Vroom’s valence theory, managers expect to be rewarded not just for doing their job but for doing it right. To be effective, the components of rewards must be clear, concise, motivating and controllable by the employees.… Read the rest