Measurable Goals For Performance Management

In a recent email to me, mezhermnt subscriber Corina from Hong Kong asks:

"This will be the first year my company uses the SMART approach to do performance management. As a manager, I am supposed to set up measurable objectives for my subordinates. It's not a problem for me to set up measurable objectives for my assistant managers as they have deadlines to meet. But when it comes to my secretary and the clerical staff, I am not sure how to set measurable goals for them as their duties are very routine and tedious. Could you give me some examples?"

Are deadlines the only thing worth measuring?

Measurable Goals For Performance Management

Corina mentions that setting up measurable goals for her assistant managers is relatively easy because they have deadlines to meet. Does this mean that the only results worth measuring for the assistant managers is whether they complete things by their deadlines?

What about completing the right things, instead of wasting time and effort and money on doing things that really don't need to be done at all?

And what about completing things well, instead of rushing to get it done on time but producing an end result that falls below the standards required?

Spend the time to think about results, before thinking about goals and measures.

So this is the first key to setting measurable goals for performance management: first spend some time to define the most important results that the person, in their role, is responsible for achieving. And check that you've got the right balance among those results using a checklist something like this one:

* timeliness (finishing the work on time, or with as short as feasible cycle time or total effort)

* quality (the goodness of the output produced, perhaps in terms of customer expectations or standards)

* quantity (the total amount of work performed, or output produced)

* cost (the total amount spent to perform the tasks)

* efficiency or productivity (the best use of time and resources)

So what are some examples of measurable goals for a secretary or personal assistant?

First we need to talk about the results that are important for a secretary or personal assistant to achieve, rather than get hung up on the duties they perform. For example, rather than focusing on the duties of "send agendas for meetings" and "schedule appointments", one key result might be "their boss is always able to focus on the priorities and not distracted by administrative tasks".

Next, what could be some goals for a secretary to strive for over the coming year? One goal, in line with the above result, could be to "Reduce the proportion of administrative items that go into the boss's in tray or diary."

And lastly, how could you measure this goal? One way could be to add the total hours the boss spends on administrative tasks (or tasks that are not in their list of priorities) and divide it by the total time the boss works, to give a proportion of time spent in administrative tasks. Clearly the goal is to reduce this amount.

See how this thought process gets you monitoring important results, instead of just measuring activity, like how many agendas were produced or how many appointments were scheduled?

So next time you're setting goals and measures for your staff, make sure the conversation starts with a clear statement of the results they are responsible for producing, as opposed to the tasks they perform. Measure the results, not the tasks.

Measurable Goals For Performance Management
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Stacey Barr is the Performance Measure Specialist, helping people to measure their business strategy, goals and objectives so they actually achieve them.

Sign up for Stacey’s free mezhermnt Handy Hints ezine at http://www.staceybarr.com to receive your complimentary copy of her e-book “202 Tips for Performance Measurement”, and get more control over the destiny of your business.

What is Risk Management?

Risk management is the process of figuring out the risks in a certain situation, and hence reducing the possibility of its occurrence. In some cases, the amount of risk that is acceptable is nil, whereas sometimes it can be higher. These risks could be due to natural causes such as accident or even deliberate attacks.

In the corporate world, risk management is an organized activity that reduces uncertainty in the business. However, there are procedures that must be followed by people who are responsible for this risk management task in order to reduce the risk as much as possible.

In the public sector, risk management is used to figure out where the risks for the public and basic infrastructure lie and what measures should be taken in order to reduce or to avoid it at all. However, to be able to do this, in both the corporate and the public sector, following steps are to be taken.

What is Risk Management?

Firstly, it is necessary to figure out which are the most important things that need protection. Then the threats to these must be understood after which it is important to understand the likelihood of each threat, which could possibly turn into reality. Once the likelihood is determined, the risk factor can be calculated. After the risk has been calculated, people who work on risk management can easily figure out ways to reduce the risk and prioritize the risk reduction measures based on strategy that is developed. These strategies can include transferring the risk to another person, avoiding the risk completely, taking measures to reduce the impact of the risk, or accepting the consequences of the risk.

Transferring of risk is what is done every day when you buy car insurance. You understand that there is a risk of an accident, but you transfer the risk onto the insurance company and they pay for your losses. Avoiding the risk means diminishing the activity, for instance not allowing a flight to take off in bad weather due to risk of an accident. Risk reduction is what is done every day in factories where sprinklers are installed to reduce the damage from fire. Finally, accepting the risk means understanding the risk, but accepting the possible losses since the cost of avoiding it could be higher.

Traditional risk management programs are focused on figuring out the risks that result from physical or legal factors like natural disasters, fire, death or lawsuits. The financial risk management programs focus on risks that can be managed through financial tools.

When managing risks, the most common process is to first take care of the risks with the greatest loss and the greatest probability of happening. After this, the risks with lower probability and lower loss are handled. However, it can be difficult to determine these costs and probability, so the chances of mismanagement in this field usually remain high.

It is also very difficult to figure out how much resources must be allocated into risk management. On one side, this has the potential to save money and/or lives should the risk become a reality, but on the other hand it seems that the money spent on this can be spent on activities that can help in earning money for the company or government. Therefore, there is an opportunity cost to risk management, and it is very important to figure out how much expenses it requires.

What is Risk Management?
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

To get best guidance and advice from Risk Management Consultants based in Manchester UK, visit us online.

Management By Objectives - A New Way Of Management

In 1965, George S. Odiorne completed a textbook titled, Management by Objective. The fact that the term "Management by Objective" has now become common nomenclature to company executives around the country attests to the success of Odiorne's literary efforts.

Management by Objectives (MBO) is a practical application of the reasoning behind the notion of goal-setting theory. MBO is a process in which employees participate with management in the setting of goals or objectives. An essential feature of an MBO program is that it involves a one-on-one negotiation session between a supervisor and subordinate in order to set concrete, objective goals for the employee's performance. During the session a deadline is set for the measurement of accomplishment, and the paths to the desired goals and the removal of possible obstacles are discussed. After an established period of time has elapsed (typically six months or year), the supervisor and subordinate meet again to review the subordinate's performance using the agreed-upon goals as a measuring stick.

Odiorne's concept of management by objective is based on an underlying premise that any system of management is better than no system at all. A secondary premise states that to be workable, any management system must bridge the gap between the theoretical and the practical.

Management By Objectives - A New Way Of Management

Research at such organizations as Black and Decker, Wells Fargo, and General Electric has shown that, on the whole, MBO programs can succeed. Because MBO relies on the established principles of goal setting, it has great potential for improving performance. Real-world constrain however, can sometimes reduce the positive impact of a goal-setting system.

The notion that management activity should be directed towards the accomplishment of pre-established goals has considerable intuitive appeal. None of the conditions are at variance with acceptable manager conduct from either a social, legal, or common sense standpoint.

Odiorne's concept of management by objective is based on an underlying premise that any system of management is better than no system at all. A secondary premise states that to be workable, any management system must bridge the gap between the theoretical and the practical. A third important premise establishes that the appraisal of managerial performance is not an activity autonomous from other activities of the firm. In other words, it regards the appraisal process as only one of several sub-systems operating within the confines of a goal-oriented management system.

Before proceeding into a discussion of the basic elements of the management-by-objective system several "statements of condition" seem warranted. Each of the following statements relates to the environmental conditions with which managers are confronted and establishes the setting for later determining the practical relevance of the management-by-objective system:

A. Because the economic environment within which business firms operate has changed so drastically in recent years, a whole new set of requirements has been placed on companies and their managers.

B. The preliminary step in the management-by-objective system dictates that managers identify, in some manner, organizational goals designed to meet the new requirements noted in A, above.

C. Immediately following the identification of company goals, management must have available to it an orderly procedure for distributing or allocating responsibilities which are directed toward achieving those goals.

D. In the practical world of business management, managerial behavior must become predominant over managerial personality. Furthermore, in the final analysis, results of the behavior (measured against established goals) become the basic criteria for good performance evaluation.

E. Total management staff participation in goal-setting and decision-making is recognized for its social and political value even though its impact on production levels may be negligible.

F. There exist no one best system of management. Moreover, since managerial activity is dependent, to a large degree, on each manager's view of specific goals and the total economic system, his actions must be discriminatory.

In its briefest form, Odiorne's decision making system of management by objective contains the following basic elements: (1) Establish an objective before you begin; (2) Collect and organize all of the pertinent facts; (3) Identify the problem and its causes; (4) Work out a solution and some options; (5) Screen options through some decision criteria; (6) Establish some security actions to enhance the probable success of the solution; (7) Gain acceptance of the decision; (8) Implement the decision; and (9) Measure the results. Each of the nine elements shall now be considered in more detail.

A positive feature of an MBO system lies in its emphasis on establishing specific measurable goals. In fact, a goal is un-acceptable or inadmissible in an MBO system unless in is measurable You may think that this is impossible for all goals, especially those for those of top-level executives. Although it is difficult to set measurable goals at the higher levels of an organization, it is nonetheless possible. For example, one such quantifiable goal might be that an institutional will be ranked in the top ten by an annual polling of executives in the same industry. 0r the head coach of a college football team may set a goal of making the top 20 in the Associated Press's coaches' poll within the next five years. Some more typical goals would be to increase market share from 45 to 55 percent by the end of the next fiscal year, to increase annual production by 10 percent, or to increase profits after taxes by 3 percent. Some goals can be measured in simple yes or no fashion. For example, the goal of establishing a training program for sales personnel or completing a feasibility study by a certain date can he judged in a simple success or failure fashion when the deadline arises. Either such a project has been completed or it has not.

Advocates of MBO believe that everyone in an organization could and should be involved in goal setting This includes all personnel, from the chief executive officer (who may set goals in consultation with the board of directors) to the newest member of the clean-up crew. In practice, however, middle level managers and first line supervisors are more commonly involved in such goal-setting systems.

Proponents of MBO systems also believe that supervisors must play a special role in the goal-setting process. Supervisors should view themselves as coaches or counselors whose role is to aid their subordinates in goal attainment. This role of coach/counselor extends beyond merely helping to identify and remove obstacles to goal attainment (for example, using personal influence to expedite shipments from another department). It also implies that supervisor will serve as a mentor-someone to whom subordinates can go with their work-related problems and assume that they will be treated with respect and support.

One major obstacle to the success of an MBO program can be lack of support from top-level executives. If key people in the organization, especially the president and vice presidents, do not fully endorse MBO, their lack of support will likely he felt and responded to at lower levels. The net effect will be a decided lack of enthusiasm for the program.

Problems may also arise if managers are not interested in having subordinate to participate in the goal-setting process. Some managers prefer to retain an evaluative and superior posture and are uncomfortable with the notion of being a coach or counselor to their subordinates.

Personality conflicts between superiors and subordinates are another potential problem for goal-setting systems, as is competitiveness. A superior who feels threatened by talented subordinates may do little to help them be more successful and, consequently, more visible, In addition, subordinates may hesitate to set challenging goals for fear of failure and its consequences.

MBO systems also tend to emphasize the quantifiable aspects of performance while ignoring the more qualitative aspects. This is an understandable tendency, since participants in MBO systems are encouraged to focus on such dimensions of performance.

Qualitative aspects of performance, which are often more difficult to identify and measure, are likely to be overlooked or de-emphasized. For example, how can the quality of service that an organization provides or an organization's image in the local community be defined and measured? Because the success of an MBO system rests heavily on the quality of the relationship between supervisor and subordinates, the degree of trust and supportiveness that exists in a work unit is a central concern.

For an MBO system to be highly successful, these elements are critical prerequisites, The absence of trust and supportiveness severely restricts the system's effectiveness. Despite these many potential obstacles, the track record of MB0 has been fairly good, In a recent review of the research literature devoted to MBO, Robert Rodgers and John E. Hunter examined 70 reports that included quantitative evaluations of MBO programs. Their findings showed productive gains in 65 of 70 evaluation studies. The average productivity increase was 47 percent, while cost data showed an average savings of 26 percent. Employee attendance was also shown to improve by 24 percent. Follow-up surveys of the level of top-management support for the programs revealed that productivity increased by 57 percent when top-management commitment was high, 33 percent when commitment was average, and only 6 percent when commitment was low.

MBO has passed through several phases since its introduction in the l95Os. Initially, MBO was greeted with much enthusiasm by managers and management scholars, During the late 1960s and early 1970s, MBO appeared, so be "sweeping the nation." Presently, MBO is viewed more objectively by scholars and practitioners as a tool that can be most effective under specific favorable conditions. It is now becoming passé even to invoke the initials MBO. In fact, the principles and philosophies of MBO have become so emotion-laden in the minds of managers than an organization will often introduce an MBO system under a different label. For example, an organization may establish a program called START (an acronym for Set Targets and Review Them) or GAP (Goal Acceptance Program). The mechanics of such programs are likely to borrow heavily, if not totally, from the MBO approach. In short, the trend is toward putting old wine into new bottles, with recognition that mutual goal setting is not a panacea for all organizational problems under all possible circumstances.

This theory is helping in several ways.
Its capability for multiple management levels to set, assign, approve, comment, modify, deny or just view MBO metrics and scores. Its collaboration of performance metric settings between employees and managers. Its visibility of MBO status progressing through workflow steps. It configurable workflows to conform to internal business rules and processes. It automatically estimates bonus payouts based on objective scores. It is a simplified process to approve scores and manage updates.

Management By Objectives - A New Way Of Management
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

How to Improve Working Capital Management

"Cash is the lifeblood of business" is an oft-repeated maxim amongst financial managers. Working capital management refers to the management of current or short-term assets and short-term liabilities. Components of short-term assets include inventories, loans and advances, debtors, investments and cash and bank balances. Short-term liabilities include creditors, trade advances, borrowings and provisions. The major emphasis is, however, on short-term assets, since short-term liabilities arise in the context of short-term assets. It is important that companies minimize risk by prudent working capital management.

What Affects Working Capital Management:

o Organizations are generally focused on cash, accounts payable and supply chain issues. On the hand, external issues like the legal and business environment, or internal mechanisms like organization structure, information systems, can significantly impact working capital.

How to Improve Working Capital Management

o Owing to market pressures, companies are led to paying a lot of attention to producing good quarterly results quarter after quarter. Undue focus on this may sometimes produce a flattering but inaccurate snapshot of working capital performance. This also happens in companies that have a marked seasonality of operations with working capital requirements varying widely from quarter to quarter.

Measures to Improve Working Capital Management:

o The essence of effective working capital management is proper cash flow forecasting. This should take into account the impact of unforeseen events, market cycles, loss of a prime customer and actions by competitors. The effect of unforeseen demands of working capital should be factored in.

o It pays to have contingency plans to tide over unexpected events. While market-leaders can manage uncertainty better, even other companies must have risk-management procedures. These must be based on objective and realistic view of the role of working capital.

o Addressing the issue of working capital on a corporate-wide basis has certain advantages. Cash generated at one location can well be utilized at another. For this to happen, information access, efficient banking channels, good linkages between production and billing, internal systems to move cash and good treasury practices should be in place.

o An innovative approach, combining operational and financial skills and an all-encompassing view of the company's operations will help in identifying and implementing strategies that generate short-term cash. This can be achieved by having the right set of executives who are responsible for setting targets and performance levels. They are then held accountable for delivering, encouraged to be enterprising and to act as change agents.

o Effective dispute management procedures in relation to customers will go along way in freeing up cash otherwise locked in due to disputes. It will also improve customer service and free up time for legitimate activities like sales, order entry and cash collection. Overall, efficiency will increase due to reduced operating costs.

o Collaborating with your customers instead of being focused only on own operations will also yield good results. If feasible, helping them to plan their inventory requirements efficiently to match your production with their consumption will help reduce inventory levels. This can be done with suppliers also.

Working capital management is an important yardstick to measure a company operational and financial efficiency. This aspect must form part of the company's strategic and operational thinking. Efforts should constantly be made to improve the working capital position. This will yield greater efficiencies and improve customer satisfaction.

How to Improve Working Capital Management
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Alexander Gordon is a writer for http://www.smallbusinessconsulting.com - The Small Business Consulting Community. Sign-up for the free success steps newsletter and get our booklet valued at .95 for free as a special bonus. The newsletter provides daily strategies on starting and significantly growing a business.

Business Owners all across the country are joining "The Community of Small Business Owners” to receive and provide strategies, insight, tips, support and more on starting, managing, growing, and selling their businesses. As a member, you will have access to true Millionaire Business Owners who will provide strategies and tips from their real-life experiences.

Practical Project Management - How To Implement a Project Management Methodology

A Project Management methodology is a series of phases, actions and tasks that needs to be followed in order to deliver projects successfully. However one of the major issues many companies experience is that once they have selected a project management methodology that suites their needs, they do not know how to implement the methodology successfully.

In order to implement a project management methodology successfully, you need to follow just 5 steps. These are:

Create an implementation plan Customize the methodology for every project Train all stakeholders on how to use the methodology Constantly make sure everyone follow the methodology Improve the methodology on an ongoing basisThe first thing to do in order to ensure that you implement the project management methodology successfully is to create a proper implementation plan. Take into consideration every action you need to do in order to complete the five steps listed above. Once you have done the plan, make sure you work the plan.

Practical Project Management - How To Implement a Project Management Methodology

Not all projects are the same and because of these differences, you must be able to customize and adapt your methodology to such an extent that it fits the project. As long as you ensure that your overall methodology includes everything that may ever be needed by your projects, taking away from this methodology to fit your current projects should be easy.

One of the major failures in implementing any methodology is that the stakeholders are not communicated to as to the new methodology. You must train everyone that will use the methodology on the actual methodology and how to use it. Also remember that as new members join the team, that they are also in their induction trained on your methodology.

In order to ensure long term success of the methodology, you must through regular project management meetings and other methods of communication ensure that all stakeholders follow the newly implemented methodology. It may in the beginning require more effort to get all stakeholders to buy into the methodology, but once they start seeing the benefits, they will more easily adopt the methodology.

Lastly, a methodology should never be a cast-in-concrete thing, because as times change, so will your requirements and the methodology must be reviewed regularly to ensure that it is optimized and improved on an ongoing basis. A lot of feedback that may come from project management, not project feedback, sessions should provide input into improving the methodology.

If you follow these 5 steps and constantly improve and then re-implement your methodology, you should in no time have a very successful methodology that should be adopted by everyone in your team and organization.

Practical Project Management - How To Implement a Project Management Methodology
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Petrus Keyter

http://www.pankey.co.za

If you have enjoyed this article, why not rate it for me please.

If you have any comments or questions about this article, feel free to email us at info@pankey.co.za or click on the Article Resource below to be notified when future articles become available.

The Risk Management Process - How to Maintain an Effective Risk Management Program

A risk management program is a complicated but necessary initiative within organizations. However, by following a distinct process, organizations can maximize the effectiveness of their risk management program.

Identifying and Analyzing

To effectively manage risk, management must first identify the risks that pose the threat of a loss.

The Risk Management Process - How to Maintain an Effective Risk Management Program

Risk managers use a variety of methods to collect information to identify such risks, the common of which is incident reporting, which is the reporting of any incident that is NOT consistent with the standard of care. Incident reports help identify training opportunities and weak processes within operations.

Occurrence screenings, also a common used method to identify possible exposures, are often done as apart of quality assurance initiatives.

Patient feedback, such as complaints or results from patient satisfaction surveys, is also used to identify potential loss exposures.

Past data can be very valuable in identifying risk and also addressing it, as it provides lessons learned from past mistakes or near misses. By analyzing past data, risk managers can identify the root cause of an incident that lead to a loss. Past occurrences help managers analyze the potential impact of current risks, and helps managers prioritize potential exposures.

Open communication between management and staff may be considered the most effective form of risk identification, as it can produce valuable information regarding the effectiveness of processes and any potential weaknesses within processes.

Once potential risks are identified, they must be analyzed in order to determine their significance. Risk managers must prioritize risks based on their potential for financial loss. Managers should prioritize addressing potential events that could lead to substantial losses over smaller threats that would be less costly.

Evaluate Possible Risk Management Techniques

Techniques used to manage risk can be broken down into two categories:

- Risk Control: techniques that are aimed at preventing or reducing loss

- Risk Financing: techniques used to pay for losses that occurred

Risk Control Techniques

Avoidance

Avoidance techniques are those used to eliminate the possibility of a loss entirely. If a risk that cannot be reduced exists within a particular activity, avoiding that activity would in effect avoid the risk associated with it.

Loss Prevention

Loss prevention reduces the likelihood of a potentially compensable event from occurring.

Loss prevention practices include reviewing and implementing policies and procedures and educating staff.

Example:

Educating staff about existing regulations regarding the release of a patient's medical records or protected health information is a loss prevention technique as it reduces the possibility of an occurrence.

Loss Reduction

Loss reduction techniques are used to reduce the potential consequences of an event that has occurred.

Diligence is key in exercising reduction strategies, as damages awarded can be much lower for an organization that exemplified diligence in attempting to prevent an occurrence or following up on an occurrence that has happened (investigating the occurrence and determining its root cause).

Another example of a loss reduction technique is if a medical facility were to use fire retardant materials during construction. This would reduce total loss considerably in the event of a fire.

Segregation of Loss Exposures

Segregating loss exposures involves arranging an organization's operations and resources in a way that if a loss occurs, its overall effect on the organization would be minimized.

Separation

A separation technique relates to the saying, "don't keep all of your eggs in one basket", as it involves dispersing activities and resources over multiple locations.

Example:

Facilities and vendors may store their inventory in multiple locations in the event of a fire or any other event that would damage inventory.

Medical practices may also choose to avoid contracts with vendors and purchase through multiple vendors in case a vendor were to run out of stock on an item.

Duplication

Duplication techniques are used to serve as back up in the event of a loss. Many practices keep copies of patient medical records in case of an event that damages the originals.

Duplication techniques are also used in terms of physician coverage.

Example:

It is mandatory that when chemotherapy is being administered to a patient, that a physician or mid-level is on site in case of if a patient experiences a reaction to the drug. If only one provider were available to cover, and something arose causing the provider to have to leave, then the chemotherapy treatment would NOT be able to be given or would be a violation to do so.

Contractual Transfer of Risk Control

Contractual transfer of risk control involves transferring risk from one party to another. An example of this is when a medical office leases property, thereby transferring the risk of loss or damage to the properties owner.

Risk Financing

Risk Retention

Risk retention is a technique that involves planning on how to cover losses if they were to occur.

The simplest risk retention technique is to simply pay for a loss as it occurs. This is not viable for smaller organizations, depending on the amount of the loss.

Organizations may also accrue dollars in a funded reserve which can be used to cover any future loss.

Organizations may also borrow funds to cover losses.

Physicians also carry extensive malpractice insurance policies to help cover any loss that is incurred.

Risk retention should be considered when:

• There are known risks that cannot be reduced or avoided

• A risk does not carry much potential for great loss and the organization can pay for any loss itself

• There are predictable losses

Risk Transfer

Risk transfer involves an organization transferring only the financial liabilities to another party, while still assuming the legal obligations. This is typically done by purchasing outside insurance policies.

Select a Risk Management Technique

Organizations should implement at least one risk control technique and one risk financing technique.

Selecting the most effective technique requires an organization to predict how a selected technique would affect its mission and goals (i.e. it may not be viable for a specialist to avoid risks by avoiding procedures that are necessary for that particular specialty).

The organization must also consider which technique is most cost-effective in respect to it's operations.

Implementation

Implementation requires communication between risk management, department heads, and organizational leaders. All leadership must understand the techniques chosen to be implemented and educate staff of their importance and purpose.

Communication and education ensures that implementation of any technique is smooth, effective, and understood.

Monitor and Improve the Implemented Technique

Once a technique has been implemented, its effectiveness must be closely monitored, evaluated, and improved when needed by management. Risk management techniques can be very complex in nature, and require fine tuning when put to work.

The Risk Management Process - How to Maintain an Effective Risk Management Program
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Read more healthcare administration focused articles on iPracticeConsultant.com.

http://www.iPracticeConsultant.com

Developing A Risk Management Policy

All organisations aim to run risk free operations, however the truth is that no matter how careful they are there is always a danger of exposure to unexpected and unplanned for threats.

Implementing a risk management policy throughout an organisation is the best way of identifying and managing these threats before they become costly problems.

Embedding such a policy within daily operations also helps with making well informed choices as decision-makers better understand and evaluate the wider impact their actions have.

Developing A Risk Management Policy

For organisations who don't yet have a such a policy in place, there are some basics to include within its development:

a) Risk assessment and identification

What threats are posed to the organisation now and in the future? Are there any vulnerabilities that leave the organisation exposed to risks? Consider information, assets, personnel, reputation, legal, financial and technical aspects that may be at threat.

This stage of the process should also consider what controls and measures are already in place to deal with risks. This will help to identify any weaknesses in current risk strategies that need strengthening.

b) Risk ranking

To help carry out this task it is a good idea for organisations to adopt some form of risk classification system. This helps analyse and rank risks in a consistent manner and focus the allocation of resources.

Ranking each risk within a logical framework is a useful exercise.  Categories for ranking could include how significant the risk is. High, medium or low priority. As well as function, is it a financial, legal, operational or strategic?

c) Action plan

An action plan details how each risk will be effectively dealt with and by whom. The plan will allocate each risk to a person or department and make clear the expectations for dealing with the threat.

The plan will also consider resources available for dealing with the risk, cost-effectiveness of planned remedial activity and a deadline for completion.

d) Assessment and review.

Reviewing risks needs to be an on-going process. Risk management activity should be reviewed at regular intervals to ensure its' effectiveness and uncover any weaknesses.

Where weaknesses occur this provides opportunity for upgrading and strengthening processes against repeat threats.

e) Compliance

Where necessary the policy should also ensure controls and measures in place comply with quality standards and corporate governance.

f) Review and improvement

Risk management policies are an evolving beast and should be under constant scrutiny to ensure they remain relevant and effective. New risks need incorporating, less significant risks may need removing. Allocation of resources may need updating and responsibility reassigned according to findings. All this will ensure a strong policy that is ready to meet threats to an organisation now and in the future.

Once implemented a risk policy requires careful management to ensure it meets statutory and regulatory obligations. Using risk management software is an effective, consistent and cost effective means of automating key risk manager processes throughout an organisation, whilst meeting necessary checks and measures.

Developing A Risk Management Policy
Check For The New Release in Health, Fitness & Dieting Category of Books NOW!
Check What Are The Top Cooking Books in Last 90 Days Best Cheap Deal!
Check For Cookbooks Best Sellers 2012 Discount OFFER!
Check for Top 100 Most Popular Books People Are Buying Daily Price Update!
Check For 100 New Release & BestSeller Books For Your Collection

Hitec Laboratories' risk management software solution, Ten Risk Manager, is built around a centralised repository of risk-related information. It presents a consistent, shared view of data and automates the key elements of strategic and operational risk management.