Developing an Airport Performance-Measurement System (2010) / Chapter Skim
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72 Task 9: Implement and Measure 77 Task 10: Baseline Measures and Set Targets 78 Task 11: Report and Analyze Performance Results 83 Chapter 5 Manage Performance Measurement (Step 5) 83 Task 12: Manage Performance Players 84 Task 13: Initiate a New Performance-Measurement Cycle 88 Chapter 6 Current and Emerging Technology for the Performance-Measurement Process 88 Understanding Software-Based Reporting 89 Key Characteristics of Effective Performance-Measurement Software 90 Considerations When Purchasing Performance-Measurement Software
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Select performance measures that monitor intermediate and short-term objectives at the divisional and department levels.
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36 Part II: Building a Performance-Measurement System * PM – Performance measurement *
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In other words, the performance-measurement system becomes a tool for knowing where you are in implementing your strategic plan, whether you are achieving results, and what current practices need to be adjusted to achieve better results. This guidebook provides airport managers with the necessary tools to evaluate how well an airport is achieving its strategic goals and mandates; however, strategic planning and performance measurement go hand in hand.
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Task 3 includes gaining or reaffirming the commitment of the airport director and the senior executive team and identifying the roles of everyone who will be involved in performance measurement. Task 1: Assess the Need for a Performance-Measurement System The first step in developing a performance-measurement system is to assess the need for its implementation and the benefits it can provide (see Exhibit II-1.1)
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ACRP Report 20: Strategic Planning in the Airport Industry16 focuses on how to develop a strategic plan, starting with the airport's mission and vision and ultimately describing the activities that will achieve success. As a follow-up to the guidance on strategic planning offered in ACRP Report 20, this guidebook on performance measurement focuses on measuring success by developing an airportwide, integrated, performance-measurement system that measures performance at all levels of the organization and provides information to airport leaders so that they can identify and address issues and opportunities in ways that improve airport performance.
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Dayton International Airport completed a strategic plan and implemented a Balanced Scorecard in 2007 that serves as the navigation system of the organization. The performance-measurement system was created to determine what to measure based on strategies in the strategic plan and external benchmarks.
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Aligning performance measures with the aims of cooperative external parties can improve performance for the airport and external stakeholders and result in an improved experience for customers. If stakeholders see airport outcomes that support their own interests and requirements, they are more likely to commit their support.
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complicated. For small airports, it can be as simple as informal conversations with key employees, customers, and stakeholders.
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Relying on factual market information, understanding stakeholder needs, and acknowledging the impact of the airport in the community, airport managers will be more assertive in designing the future of the airport. In developing a strategic plan, Dayton International Airport conducted one-on-one interviews with over 35 internal and external stakeholders, including city and county managers, the chamber of commerce, the conventions and visitors bureau, car rental agencies, airlines, and fixed-base operators (FBOs)
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One of the most advanced airport performance-measurement systems is used by Tampa International Airport. The idea of measuring performance was brought to the airport by the executive director based on his previous experience in Salt Lake City.
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To simplify, the core executive, the Core Team, and the airport director when acting as the core executive will be addressed as the Core Team. Once the responsible party for the performance-measurement system has been identified, the Core Team should identify senior executives in charge of making the key decisions on planning and performance.
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The Metropolitan Washington Airports Authority consists of two different airports, and implementing a performance-measurement system that is relevant to both can be challenging. Due to the different natures of the two airports, the performance measure components at Dulles International Airport and Reagan National Airport monitor somewhat different areas and use performance measures in different ways for management decisions.
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For example, a mission statement such as "Achieve a world-class airport" is overly vague without more explanation. If instead the mission statement says "Achieve a world-class airport by providing our customers safe • Promote employee participation • Document performance measures • Concentrate on outcomes • Cascade and align measures The mission should be clear and measurable.
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Just as a vision is necessary to develop specific resultsoriented measures, no vision statements should be drafted without understanding how the vision will be measured. 48 Part II: Building a Performance-Measurement System Values can be the basis for sound leading measures.
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Nashville International Airport has been a leading airport in strategic planning and performance measurement. In 2003, Nashville International Airport started by developing a comprehensive Long-Term Strategic Business Plan with clear mission and vision statements.
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selection of good end-outcome measures, (3) selec50 Part II: Building a Performance-Measurement System scan; and finally reviewing the foundation of the performance-measurement system by evaluating strategic goals, corresponding annual and long-term key initiatives, and key performance measures.
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Selection of Leading Indicators Airports seek performance measures with leading indicators that predict future change in other measures. For example, when airlines maximize revenues by replacing fuel weight with extra cargo load and airplanes are refueled at each destination, an increase in fuel sales at airports where the mix of in-transit passengers is relatively high implies that the number of in-transit passengers is increasing as well.
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The entire organization, including support functions, needs to be aligned with enterprisewide outcome measures. Strategic alignment allows for prioritization of work at the individual level, where daily decisions on resource allocation actually occur.
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The primary business goal is to "Grow the Core Business," and the four strategic goals are the following: Keep Dallas/Fort Worth International Airport Cost-Competitive, Create Customer Satisfaction, Deliver Operational Excellence, and Foster Employee Engagement. Each strategic goal is broken down into objectives and each objective into initiatives.
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Examples of some long-term objectives, end outcomes, intermediate outcomes, and shortterm objectives are provided in Exhibit II-2.3. 54 Part II: Building a Performance-Measurement System Strategies Outcome Measures Recruit and retain air service providers that meet regional needs Increase the number of passengers using Mahlon Sweet Field by 2% annually Establish a sustainable Air Service Development Fund with $$ in annual contributions Develop airport facilities and infrastructure to accommodate operational, safety, and security requirements and to meet projected demand Within 4 years meet airfield development needs as identified in the new Airport Master Plan Within 4 years complete the projects identified in the terminal rehabilitation plan Annually meet FAA and TSA safety and security mandates Provide the products and services needed by customers at Mahlon Sweet Field Maintain a satisfaction rating from customers of 80% that they are able to find the products and services they need Source: Mahlon Sweet Field, Eugene, Oregon Exhibit II-2.2.
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Activities are roadmaps to achieve short-term and intermediate objectives and contribute to the attainment of long-term objectives. In addition to end-outcome measures, Leesburg Executive Airport tracks performance to improve services and remain competitive.
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Core processes include operating and maintaining the airfield, providing traveler support facilities and services, providing general aviation facilities and services, and planning and developing regional air service and facilities. The total system, on the other hand, is oriented to the efficiency, effectiveness, financial performance, and customer satisfaction generated by Mahlon Sweet Field (see Exhibit II-2.4)
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When high-level measures aren't achieved, departments analyze underlying components to find the cause of the unsatisfactory performance and take corrective action. Core Processes Short-Term and Intermediate Measures Operate and Maintain the Airfield Landing fees per 1,000 lb of landed weight Total aircraft operations Meet FAA safety requirements Provide Traveler Support Facilities and Services Customer satisfaction rating or quality and importance of terminal services Airline passenger-related revenue per enplaned passenger Meet TSA security requirements Provide General Aviation Facilities and Services Change in based aircraft Gallons of fuel sold Plan and Develop Regional Air Service and Facilities Market demand for air service Demand triggers as identified in the Airport Master Plan Percent of regional trips through Mahlon Sweet Field Total System Short-Term and Intermediate Measures Effectiveness Number of passengers using Mahlon Sweet Field Percent of regional trips through Mahlon Sweet Field Efficiency Average airline cost per enplaned passenger Financial Operating expense per enplaned passenger Customer Satisfaction Customer satisfaction rating of signage, cleanliness, and appearance of the terminal Number of Mahlon Sweet Field passenger top 10 destination markets receiving direct service from Mahlon Sweet Field Source: Mahlon Sweet Field, Eugene, Oregon Exhibit II-2.4.
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Paul International Airport.
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Third, each office should assign a designated point of contact, who is charged with providing office performance information to the Core Team. 59 C H A P T E R 3 Create the Reporting Structure (Step 3)
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While executives are the ones who should establish strategic goals and corresponding macro-level measures, department leaders, in collaboration with staff, should develop micro-level measures and decide on specific targets in order to meet the objectives set by the executive team. "People involvement in the process brings about ‘buy-in' which brings about commitment."21 The methods and timing of employee involvement should be individually tailored depending on the size and structure of the airport while recognizing the following: • Involvement creates ownership, which increases loyalty and commitment, thereby increasing accountability.
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Employee Reward System Recognizing and rewarding positive performance is a key incentive for performance improvement. A reward system can greatly support employee buy-in.
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With 203 full-time employees, it took Dayton International Airport a year to gain employee buy-in at all levels in the organization, including from employees at the managerial level who showed some skepticism due to the drastic change. Employees embraced the changes once
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Lessons learned at Dayton International Airport are the following: • It is important to bring external stakeholders into the process to obtain support. • It is important to clearly communicate to staff members that an airport strategy with defined objectives and direction improves efficiencies when decisions need to be made.
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This performance measure links pay to the achievement of the overall corporate budget for the current year. • Cost per Enplaned Passenger.
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OCE-2 Corporate Financial: 2010 budgeted airline cost per enplaned passenger of $38.37 or less. OCE-3 Corporate Customer Service: Maintain a standard of service and facility offered by Toronto Pearson as measured by the "overall satisfaction index" of the annual ASQ survey.
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The sample dashboard depicted in Exhibit II-3.3. is a PowerPoint document that displays useful information on a hypothetical monthly customer satisfaction measure that airport decision-makers could use to improve performance.
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2. This month, for the first time in months, monthly customer satisfaction did not meet the target.
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Selected measures were chosen based on indicators the industry embraces as important and indicators that other airports use to allow for proper comparison. As shown in Exhibit II-3.4, Dayton International Airport's Balanced Scorecard reflects a total of 26 measures selected according to what the airport industry is measuring in the following areas: • Cost Performance • Revenue Performance • Concessions Performance • Efficiency and Effectiveness • Customer Service Performance measures at the corporate, departmental, and sub-departmental levels at Toronto Pearson International Airport are prepared for each strategic objective and initiative and are categorized by one of the four Balanced Scorecard areas.
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2 7 $6.24 161% $6.15 165% $5.30 207% Public Safety Costs Per Enplaned Passenge r $2.25 $2.64 -15% $1.88 20% $1.81 24% Fire Safety Cost Per Enplaned Passenge r $1.94 $1.86 5% $1.73 12% $1.50 29% Soft Costs of projects 20% 11% 82% 0% 0% 0% 0% Revenue Performanc e Non-Airline Revenue to Airline Revenu e 50% 51% 2% 49% -2 % 51% 2% Total Non-Airline Revenue Per Enplaned Passenge r $12 $16.46 37% $12.99 8% $12.93 8% Cargo Space Leas e d 100,000 s f 0 0% 0 0% 0 0% Concessions Performanc e Total Concessions Revenue per Enplaned Passenge r $5.00 $5.62 12% $5.44 9% $5.58 12% Total News & Gifts Revenue Per Enplaned Passenge r $1.62 $1.42 -12% $1.40 -14% $1.50 -7 % News & Gift DBE 25% 25% 0% 25% 0% 25% 0% Food & Beverage Revenue per Enplaned Passenge r $3.65 $3.84 5% $3.67 1% $3.72 2% Food & Beverage DB E 3% 0% -100% 0% -100% 0% -100% Parking Revenue Per Enplaned Passenge r $7 $9.60 37% $9.08 30% $8.82 26% All Other Concessions Revenue Per Enplaned Passenge r $0.20 $0.37 85% $0.37 85% $0.36 80% All Other Concessions DB E 3% 1.46% -51% 1.46% -51% 1.46% -51% Efficienc y & Effectivenes s Change Order Costs /Project Cos t s 5% 0 100% 0 100% 0 100% Number of breaches of airport security pl a n 0 1 -100% 0 100% 0 100% Number of violations airfield/runway incursio n s 0 0 100% 0 100% 0 100% Customer Servi c e Customer Satisfaction-Parking & Signag e 85% 70% -18% 70% -18% 70% -18% Customer Satisfaction-Appearanc e 85% 70% -18% 70% -18% 70% -18% Customer Satisfaction-Concessio n s 85% 72% -15% 72% -15% 72% -15% Customer Satisfaction-Complaint Response Ti m e 72 hour s 72 hours 100% 72 100% 72 100% * Based on DAY Preliminary draft with residual Method of Rates & Charges Q1 FY 07 Performance Q2 FY 07 Performance Q3 FY 07 Performance Source: Dayton International Airport Exhibit II-3.4.
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created using the Balanced Scorecard approach. Nashville International Airport continues to use these measures, shown in Exhibit II-3.5, as it transitions to measures supporting performance excellence.
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non-stops, total dest Bus Dev R 7.4 Workforce Education Level HR R Engagement Six Sigma Participation CIU B Satisfaction Performance Review over time HR R Development Emp Opinion Surveys HR R - Training Hours HR R - AOC & Spec Training HR R - Recognition Reward Counts HR R - Staffing Report DPS/OPS HR R Capability Turnover DPS/OPS R Capacity Termination Report Data CIU R - Vacancy Report HR R - % Payroll to Employee Benefits HR R X Climate Safety Report HR R X - Safety Comm Actions Safety R - Occ Injury Trends Safety R - OSHA 300 Safety R - Personnel Change Log Safety R - Salary Survey HR R Emergency Preparedness All R 7.5 Process Effectiveness TNCPE Recognition Process All C X - Work System Changes CIU C - KWP Process Metrics CIU C - MNAA Service Quality Index CIU C - Support Process Metrics All B 7.6 Leadership Action Plan Implementation All B Strategy Strategy Implementation CIU B Ethicial Reported Breaches of Ethics Legal R - Employee Survey of Ethics HR R - Corrective Actions to Breaches Legal R - Audit Results HR R X Fiscal Audit FollowUp Progress Legal R - Financial Statement Issues Audit R - External Audit Issues Audit R - Financial Statement Risks Fin R Citizen Community Support Time Donated CACS R - Percent Workforce Involved CACS R - Resources Contributed CACS R Metric Coding R=Run Business C=Change Business B=Both Exhibit II-3.5. Metropolitan Nashville Airport Authority results metrics.
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Finally, the airport will report and analyze performance data that will be used in the decision-making process. Step 4 includes Task 9: Implement and Measure, Task 10: Baseline Measures and Set Targets, and Task 11: Report and Analyze Performance Results.
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Generally, outcome measures rarely involve the efforts of one department; enabling airportwide improvement in areas like service quality, customer satisfaction, and even IT, requires cross-functional teams to succeed. Therefore, horizontal information is as critical as vertical information not only to improve outcomes, but also to benefit from other departments' learning experiences.
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Performance measures should not be established because data are available and convenient. Only necessary data should be collected, and not all data should be provided routinely to all levels of management.
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Airport management needs to review performance measures regularly and decide whether the measures are still useful enough to the organization to expend resources on collecting information for them. The quality of collected data is more important than the quantity.
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Customer satisfaction data are mainly received from ACI's ASQ program results and the internal airport Customer Service Assurance Center, which provides data on customer complaint records, phone logs, road traffic delays, safety concerns, and so forth. To ensure a comprehensive performance-measurement system approach, data at Toronto Pearson International Airport are collected for various periods, from all organizational units, and from various external sources, including airlines (about passengers)
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Examine the airport's actual performance and variations as you set interim targets. That way, you'll know success or failure is not just a result of extraneous factors such as the time of year.
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The goal of the board of directors at Memphis International Airport is to operate under a business model that improves efficiencies by reducing costs. Therefore, the goal of Memphis International Airport from an operations perspective is to keep rates and charges on a level base.
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Year-end reports are generated by the Core Team and submitted to senior executives. At a minimum, analysis accompanying year-end reporting needs to convey the following information: • The performance results and how they compare with baselines and targets for the year, • The actions taken during the year to achieve the target, • Reasons the target was or was not achieved, and • The impact that the reported performance results will have on the long-range outcome they support.
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Tampa International Airport developed a series of reports to internally monitor and report airport performance: • The Initial Form describes efforts and tasks to accomplish each goal and the planned completion date. Elements of the form are the goal description, timeline, inputs, outputs, outcomes and measurement, goal number, and the responsible department and director.
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Minneapolis–St. Paul International Airport performance indicators as published in 2008–2012 strategic plan.
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• The Goals & Objectives Completion Reporting Format provides documentation that supports the performance measured. Elements are the goal number, responsible director, description of the goal, process completion date, original goal completion date, approved and revised goal completion date, explanation for late goals, outputs, outcomes, and measurements.
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Large airports will probably identify a Core Team, and each department will identify a point of contact who provides performance information. Smaller airports may assign a single individual to coordinate performance planning, measurement and information gathering.
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• Is performance data available to airport staff at all levels? Using evaluation techniques to confirm or alter performance measures is essential to the airport's continuing improvement.
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. Source: Infrastructure Management Group Step 1 Prepare to Plan & Measure Assess the Need for PM System Step 2 Plan to Achieve Results Step 3 Create the Reporting Structure Step 4 Act & Measure Step 5 Manage Performance Scan Airport Environment Confirm Mission, Vision, & Values Identify Long-term Goals Identify Short-term Objectives Measure Performance Set Measurement Responsibilities Performance Players Develop & Test a PMRS Implement & Measure Baseline Set Targets Measures & Manage Coordinate Change Environmental Assessment Define Change Develop a new PM System Change targets, activities, strategies Airport Director Approval Commit to Report & Analyze Exhibit II-5.1.
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Thus, the performance-measurement system is aligned with the airport's strategic goals and initiatives. The performance-measurement system at Toronto Pearson International Airport tracks airport performance toward established strategic plan goals.
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87 Source: Toronto Pearson International Airport Exhibit II-5.2. Toronto Pearson International Airport annual review and planning cycle.
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The most robust scorecards can connect to almost any available source and are not limited to proprietary reporting packages that only answer some data questions. Having the widest possible access to multiple data sources makes it easier to move forward with fully integrated enterprisewide performance management.
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Key Characteristics of Effective Performance-Measurement Software In today's environment, business intelligence and performance-measurement software overlap and intersect. Airport technology staff should examine business intelligence solutions when determining the proper performance tool.
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Reports can be built with multiple data queries. Modern software tools make departmental reporting a much easier process.
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In this model, the performance-measurement system software is licensed for use as a service provided to customers on demand, reducing the cost and burden of installation ETL has enhanced the utility and ease of performance management software. It is a major feature to consider when purchasing.
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When multiple users are entering data, there is a risk that information will be inconsistent and of poor quality, which can cause the software to fail to reconcile identical datapoints. Data cleansing is vital for data quality and incomplete cleansing can raise three large issues: • Processes performed using defective data in the source databases will provide invalid results, which will cause the airport to incur the costs of measurement failure, discarded information, and rework.
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Wizard-driven reporting allows for the use of pre-programmed reports to create the appropriate reports for an airport's specific needs. Requiring airport personnel to write SQL script to create reports requires that personnel have the technical knowledge necessary to do so and can cause the airport to incur higher technical costs.
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