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Performance Improvement Process (PIP)

After designing a proper set of performance measures, the organization has to analyze/compare its ‘Key Performance Measures’ levels with competitors, best in industry (Benchmark) etc., identify the ‘gap’ and stretch their targets for those measures.

Gap analysis:

Different types of Gaps are as below:

  • Gap Over standard: The Gap between present performance level and the standard norm/rated capacity.
  • Gap Over Internal Best: The gap between present performance level and the internally achieved best performance (the best performed level in past).
  • Gap over Customer Requirement: The gap between present performance level and the customers requirement (may be based on M.o.U). It is very important Gap.
  • Gap Over Competitor: The gap between present performance level and immediate competitor’s performance level.
  • Gap Over Benchmark: The gap between present performance level and best in the industry(Benchmark).
  • Gap over Target/Goal: The gap between present performance level and the stretched target/goal of the department/organization. This is the gap which needs to be filled up Immediately.

Stretching Goals :

Based upon the gap analysis the stretched targets/goals are to be fixed up for different Performance Measures. The target can be internal best achieved level, standard norm,customer’s requirement, competitor level, benchmark or any other level around these.
But, the target/goals should be achievable. If employees perceive the goals as unrealistic and unreachable, they become frustrated and give up trying to achieve it.After stretching the targets ,next step the department/ organization has to do is to identify the gap when compared to present performance level and target/ goal.
  • Value Engineering, 
  • Benchmarking Process, 
  • Juran’s Project-by-Project Management,
  • Use of QI Tools etc.

Six Sigma

Six Sigma at many organizations simply means a measure of quality that strives for near perfection. Six Sigma is a disciplined, data-driven approach and methodology for eliminating defects (driving towards six standard deviations between the mean and the nearest specification limit) in any process – from manufacturing to transactional and from product to service.
Six Sigma is a rigorous and disciplined methodology that uses data and statistical analysis to measure and improve a company’s operational performance by identifying and eliminating “defects” in manufacturing and service-related processes. Commonly defined as 3.4 defects per million opportunities.