I found a great study of courier performance created by the United States Department of Transportation (DOT). They studied the use of specific objectives and performance measures to manage operational performance. They found common practice among self-sustaining private and public organizations that are responsible for generating sufficient revenue to meet costs and, in some cases, even produce profit.
The experiences of these organizations are a rich source of information to consider in the public sector. DOT's objective was to learn from others what might apply to agencies in the United States working to advance transportation planning. Since their aim was to examine the use of measurable objectives and performance measures by private and public organizations to improve service delivery, they also included toll roads and electrical lines.
Information on the use of operations-related objectives and performance measures was gathered from Federal Express (FedEx), TNT Express Delivery Services, Illinois Tollway, and two power companies. Small package delivery companies were researched because they must closely monitor and optimize their operations to provide good service, which enables them to attract and maintain customers in a highly competitive business environment.
A tollway organization was included in this research to provide a closer point of comparison for public sector transportation agencies. An examination of electric utilities illustrated the use of objectives and performance measures for service delivery across wires instead of roads. Note that the US Postal Service was not included! They concentrated on: setting goals and obtaining buy-in; tracking; adjusting the process, adjusting the measures to current needs; demonstrating accountability to shareholders and customers.
From their research, they developed a possible list of what is required:
- A “balanced scorecard” to give top managers views of external outcomes (system efficiency/reliability), operator activities (internal processes), and customer satisfaction.
- Develop objectives for different levels or tiers in the organization based on responsibility. So at the top, they focus on broad objectives. At lower levels, the objectives are increasingly specific and related to the responsibilities of the personnel at that level of the organization. This helps employees better understand what is expected of them and how they can contribute to organizational objectives or goals.
- Assign weights to performance objectives according to their impact on customer satisfaction. FedEx developed a 12-component index known as the Service Quality Indicator and each item is weighted to reflect how significantly it affects overall customer satisfaction. FedEx uses customer satisfaction surveys to update its measures and weights.Measures of transportation operations may not all have equal importance or impact on desired objectives. It may be useful to give more weight to some aspects of performance than others to reach objectives more efficiently.
- Set up a team for each objective or performance measure. FedEx set up a cross-functional action team for each component of its Service Quality Indicator. Each team is headed by a senior executive and assures the involvement of employees from all part of the company when needed.
- Communicate performance information regularly to staff. TNT Express Delivery Service uses a seven-indicator service performance report that is updated weekly and circulated among each package coordination and collection depot. The performance of each depot is indicated on the report and this creates competition among the depots for top performance.
- Ensure objectives have a senior level champion. The package delivery companies of Federal Express (FedEx) and TNT both have senior executives that serve as champions within the organization for the performance measurement system.
- Maintain a high level of awareness of operational performance. FedEx uses it's Service Quality Indicators (SQIs) to measure and monitor its effectiveness. Since the SQIs consist of primary components of the transactions that take place between FedEx and its customers, it includes aspects such as lost packages, packages delivered late on the right day and packages delivered on the wrong day. Each of the components is then weighted as they have a different degree of importance to the customer. The components that cause most frustration to customers are given a higher weighting than those that are less frustrating. This allows FedEx Express to get a far more meaningful result and focus on the issues that matter most to customers.