Received from John Evans
Tue, 17 Jan 2017 at 7:47 p.m.
From: John Evans
Date: Monday, January 16, 2017
To: ODT editor
The Editor, ODT
We are often regaled by company directors, CEOs and bureaucrats with discourses on the importance of KPIs. KPIs?
Key Performance Indicators – one of many PR corporate speak Buzzwords.
Wikipedia’s definition is pretty broad but basically it means that certain measures designed by the company or board are measured against actual performances.
Recently, the term gained another meaning when KEY performance [was] reassessed in the light of John KEY’s resignation. Unfortunately his stellar career as Prime Minister seemed to be judged poorly by those political pundits doing the assessment.
The key word is Performance, the measure of which is judged in order to provide an increase in salary or measures which might lose the judged their position if they failed to meet the KPIs included as part of the employment contract.
The test is what performance is paramount and who is it paramount to.
These tests are important in worldwide businesses but is there a different reality in New Zealand? It seems to me that either the KPIs are set incorrectly or there is a disconnect because no one seems to fail, to not meet their predetermined KPIs.
One example is the role of council lawyers. Why would council lawyers write in an employment contract a clause which gave the employee a golden parachute even if they failed to meet their KPIs? Or was it the employees themselves who wrote the KPIs for their own future benefit? Surely if this was so, the lawyers acting for the company or body they represent would refuse to condone the parachute for employees and directors after proven incompetence.
The Dunedin City Council and its management, and the council owned companies, are surely charged with KPIs and, one surmises, about the results of such indicators and the resultant effects on the council and its employees. Can we analyse a few actions of the council and what the KPIs may have been and whether they would meet them and perhaps the consequences of meeting them or not.
The first and most obvious one is the theft of 152+ cars.
What was the measure of acceptable theft? Was it 20 cars, 100 cars or was 150 cars sufficient to tip them over the edge. And as another example, what was the Police’s key indicator on this matter? Do they prosecute for the theft or conversion of 1 car or does it take 160 cars to prosecute somebody for being involved either in the theft or knowing receipt of a car or cars?
The next is the investment in land and development projects by Delta.
Was failure in one, two or three such projects acceptable or is the magic number 5 (Delta will do it again and we have not quite got there yet).
The Dunedin stadium KPIs. Is a running cost of some $20million acceptable as an annual loss to the ratepayers or should the losses be only $15million or shock horror only $5million. Or should the ratepayers be released from the financial burden which was never the choice of the majority?
Sewage Treatment KPI – Is it acceptable to process sewage to a point that it pollutes the ocean two kilometres out or are we entitled to potable water ex site at Tahuna?
Mudtank cleaning KPI – How many mudtanks cleaned would be an acceptable result, would a flood in South Dunedin suggest that measure was incorrect? Contractual performance and payment for same. Would a KPI for the DCC CEO include overall managing payments to contractors? If a contractor did not perform to those KPIs set within the mudtank cleaning contract, should the contractor be still paid?
Wastewater treatment – Is it an acceptable KPI for wastewater treatment that in high rainfall such overflows are discharged into the pristine Otago Harbour?
Delta KPI on pole replacement. Is 100 unreplaced tagged poles acceptable? Is 1000 acceptable? On suspect poles, is a KPI that the company changes so that they did not breach a previous KPI acceptable or should every company and council just change their KPIs to avoid failure, blame or the legal consequences?
Richard Healey, the “whistleblower” on Delta’s failures seems to have personal ‘built-in’ KPIs —including integrity, high quality job performance, peer safety and corporate responsibility. Just why do the CEO and directors’ KPIs apparently differ from these such that Healey has to resign for them to take note?
On Directors of the council owned companies, do their KPIs reflect their responsibility under the law or are they designed to protect the directors from prosecution under the law despite failure by other measures?
And where does the buck stop?
Just what are the KPIs upon which we judge the mayor, based? Is the only measurement his electability?
Are we the ratepayers not entitled to expect a KPI that includes retribution against failings in any DCC departments or DCHL companies? If we do not reward success and prosecute failure in some way are we not missing the whole point of Pavlov and his dogs? Should we not then close our prisons and let the perpetrators of violence, antisocial acts and any injustice roam free, surely this is the logical nett result of such an attitude of no judgement.
The analysis of John Key’s contribution would suggest that electability and performance may well be poles apart. Perhaps that is the greatest lesson we can learn from the errors of judgement of recent times in our city.
John P. Evans
Posted by Elizabeth Kerr
This post is offered in the public interest.
2 responses to “Basic questions arising for the City, unpublished by the newspaper”
The whole idea of KPIs is one of seeming accountability for one’s actions but in reality is just a measuring device for rewards, such as bonuses, salary increases or other financial inducements. KPIs are not as most people believe but are largely a bureaucratic dream, having no value whatsoever other than the financial. If anyone thinks/thought they were a means of marking performances then just look at the results over recent times.
KPIs are made for purpose, unlike inches and centimetres which are standards against which real things can be measured. KPIs are ideal measures for purpose, they stretch and shrink, can be tailored for pass or fail. They work very well in their native habitat. It is unwise for people outside that ecosystem to take seriously any claims that they possess transferable validity.