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Assessment of facilities management performance

School of Construction and Property Management, The University of Salford, Salford, UK
Keywords Facilities management, Performance measurement, Methodology Abstract Facilities management (FM) exists to support the core business, that is the preliminary goal-seeking activities of the enterprise. The role of FM in facilitating organizational performance, and thereby in providing competitive advantage, is widely acknowledged. Performance measurement (PM) is a topic which is often discussed; however, the mechanisms of how this happens in FM are quite unclear, prompting performance evaluation researchers to question whether performance evaluation in fact does add value and enhance organizational performance. Further, the growing acceptance of a need to measure FM performance is in contrast to a lack of a systematic process for determining appropriate measurements. This proposed study provides a performance-based approach that considers the FM process elements for measurement to be people-process-output-customers.

Dilanthi Amaratunga

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Introduction There is much agreement among researchers and practitioners as to the importance of FM to both manufacturing and service organizational competitiveness and effectiveness, but the understanding of performance evaluation aspects of FM behaviour in particular remains relatively undeveloped. To date, few data are available to assess how extensively the use of performance measurement techniques has diffused in FM organizations, what factors have influenced their diffusion, and how they affect the overall organizational performance. The growing acceptance of a need to measure FM performance is in contrast to a lack of a systematic process for determining appropriate measurements. The ongoing research from which this summary is drawn attempts to set out a methodology for defining and measuring the level of fit between an organization and its facilities. Particular emphasis is given to the performance evaluation of facilities upon which the research in question is initially focused. Theoretical background The literature review reveals the established and generally accepted facts of the situation being studied, and enables one to identify and understand the theories or models, which have been used by previous researchers in the field. The literature review assists the researcher in identifying an unsolved problem in the field being studied, which will become the focus of the research study. The review of the literature included an in-depth examination of the material relating to performance assessment in general and in FM organizations in particular. The main purpose and outcome of this was to identify theoretical gaps in the literature which pointed to potential research topics. Although the area of performance measurement is not new, the constructs are neither

Property Management, Vol. 18 No. 4, 2000, pp. 258-266. # MCB University Press, 0263-7472

well-established nor standardised across and even within FM disciplines. There is, therefore, an abundance of areas that require further investigation. Facilities management context in general The origins of FM can be traced back to the era of scientific management and the subsequent explosion in office administration. The move towards better management of facilities is set to continue as buildings with their content and organizations continue to become more sophisticated. Several groups have attempted to define the scope of this role of FM, and some of these relate to particular views from the more traditional professional fields. Definitions of FM abound and to date there has been no one commonly agreed description of what FM entails. FM is defined by the US Library of Congress as: ``the practice of co-ordinating the physical workplace with people and work of the organization integrates the principles of business administration, architecture and the behavioural and engineering sciences''. This definition is very broad, whilst inadequate as a direct basis for constructing a working model for facilities management. Nevertheless it confirms, in general terms, the realisation that there are at least three principal aspects to the facilities management function which may be true in every situation (Barrett, 1994): (1) it is a supporting management function to the core business of an organization; (2) it concentrates on the area of interface between physical workplace and people; and (3) it requires a multi-skill approach. The Centre for FM in the University of Strathclyde (1992) defines FM as ``the process by which an organization delivers and sustains a quality working environment and delivers quality support services to meet the organization's objectives at best cost''. The working environment includes the physical, administrative and social setting for productive activity and the definition includes all the systems and services that support the business operation and suggests that FM is essentially demand-driven and should be closely related to strategic planning in an organization. The essence of FM lies in the ways in which facilities are tuned to business needs and in the effectiveness of the systems that ensure that non-core activities deliver value for money (CFM, 1992). Performance evaluation concept Measurement has always been of great importance. It is an area which has been discussed increasingly over the past few years, and the adages ``you can't manage what you can't measure'' and ``what gets measured gets done'' are all too common elements of many management texts. Sinclair and Zairi (1995) exemplify the need for measurement in enabling good planning and control; management of change; communication; continuous improvement; resource

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allocation; motivation; and long-term focus, judging it to be ``a valid management tool''. Thus, the use of measurement as an aid to the promulgation of core values throughout organizations is now common. Neely (1999) identifies commonalities between business strategy, organizational behaviour, and manufacturing communities, noting a consensus that ``strategies are realised through consistency of decision making and action'' which may be reinforced by performance tracking methods. Performance measurement in practice in facilities management It has been mentioned earlier that the context of this study is FM organizations. The criticism has been made that FM researchers do not use the concepts of performance measurement in as rigorous a manner as, for example, business performance theorists. Furthermore, they make no use of more general discussions of performance measures, e.g. the usefulness of constructing a performance measurement framework for FM, and add performance measurement into models of FM processes in the same way that they add project management techniques. The study of performance measurement in the FM setting has therefore been somewhat superficial. Although the literature on performance measurement is vast, very little of it provides concrete evidence that the concepts are operational in the real world, specifically in disciplines such as FM. A review of literature in FM over recent years indicates a trend towards performance measurement, particularly for strategic development. Furthermore, the FM organization provides a good setting for the study of performance measurement. A study of FM literature indicates that performance measurement in FM will be perceived in two ways. First, as a ``critical success factor'' in the strategic development process and, second, as a learning process within the FM organization. The latter refers to a process whereby the FM organization aligns itself with its environment by obtaining information, either from the marketplace or through the generation of scientific knowledge, and the subsequent applications of this in organizational development processes. Literature gap From the literature review, several gaps in the theory emerged, providing some potential research areas. In general, researchers and writers in the FM field have yet to investigate the concepts of performance measurement which are well developed in other fields nor do they take into account the complexities of performance measurement at the FM organizational level. The critical observation of practice, allied to a careful reading of the literature, suggested the emergent need to determine, verify and integrate the axioms of modern performance measurement in the context of FM. Research objectives and methodology From the pilot study findings (Amaratunga and Baldry, 1999, 2000) and the conclusions of the literature review, the research objectives and strategy are

derived. The ultimate goals of this research are based on two main themes of the literature of FM organization, on the one hand, and performance measurement, on the other. The aim of performance measurement in FM takes into account the methodological recommendations of Tranfield and Akhlaghi (1995) by trying to obtain productive accounts of performance measurement in FM intensive organizations from which theory can be built and to provide prescriptive findings from these descriptive accounts. Further, it will explore the paradox of consensus/diversity and exploration/exploitation in FM organizations and to use the concepts of different perspectives of performance measurement to explain the co-existence of these various types of performance measurement within FM. The main objectives of the research can be summarised as follows: . to provide an operational definition of PM in FM; . to analyse the level of application of PM practices in an FM setting and its impact, focusing on the general FM taxonomy; . to identify and analyse the contextual importance of key performance evaluation factors that interface with the optimum utilisation of FM practices and to look for ways of enhancing their applicability through improving their usage; . to develop a methodology/framework to measure performance related to FM ensuring their validity as performance measures. Identifying and measuring the critical factors of facilities performance will help to build theories and models that relate these factors among them, to FM and to the environment of the core organization, thereby to fill the knowledge gap between FM organization and FM performance assessment through establishing a framework to assess integrated facilities performance. Research methodology The research methods for this research are developed from the conclusions of the literature review. Table I outlines the main phases of the research strategy. The review of literature included an in-depth examination of the material relating to FM in general and performance measurement in FM in particular.
Research phase Literature review Pilot study Case studies Output

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Research objectives; a priori constructions and relationships ``Operationability'' of research objectives; case study strategy In-depth and causal explanations of performance measurement in FM organizations Phase one analysis Initial qualitative findings; performance measurement tools which form the postal survey questionnaire Questionnaire survey Quantitative support for qualitative data Phase two analysis In-depth analysis of qualitative and quantitative research and theory building and verification

Table I. Outline of the research strategy

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The main purpose and outcome of this phase were to identify theoretical gaps in the literature, which pointed to potential research topics. In this process of determining, verifying and integrating the principles of business performance assessment concepts in FM, it became clear that there was a need for a better understanding of performance assessment applications in FM, providing some potential research areas. Although the area of FM is not new, the constructs of performance measurement in FM are neither well-established nor standard across and even within academic disciplines. There is therefore an abundance of areas that require further investigation. In general, researchers and writers in the FM field have yet to investigate the concepts of performance measurement which are well developed in other fields nor do they take into account the complexities of performance measurement in FM. An exploratory approach to the area of performance measurement in FM organizations was preferred one as the problem of lack of construct validity is general rather than specific. A pilot study was undertaken to achieve the following objectives: . to understand the context contingencies between FM organizations operating in diverse industries; . to test the ``operationability'' of the objectives and constructs identified in the literature review; and . to provide a basis for future research. Case study research The exploratory nature of the research at this stage meant that intensive research is preferred. Hence, the activities of data collection will be based on case studies. Case studies are tailor-made for exploring new processes or behaviours. In this sense, case studies have an important function in building theory (Hartley, 1994). Case studies are of multiple-case designs, where the design follows a replication rather than sampling logic. The use of multiple cases in this study will underline the complexity of the topic of investigation and will develop the empirical evidence to support and sharpen the theory. Each case will be carefully selected so that it either predicts similar results or produces contrasting results but for predictable reasons (Yin, 1994; Tellis, 1997). The approach to the case studies is as theory building rather than as theory testing, as will become apparent. Eisenhardt (1989) and Yin (1994) discuss methods and techniques which can be used in the design of case study research, including data collection and analysis, to build theory. Eisenhardt (1989) further develops a process for building theory from qualitative data, taking into account the problems of validity and reliability, and proposes an iterative inductive-deductive approach which results in good quality and rigorous findings. In addition to this, the case research approach is employed for testing the propositions constructed at the pilot study level. The intention of this is to tap perception of all organizational and performance dimensions that might serve

as influences on facilities management. This will allow an in-depth investigation of the concepts of performance measurement in FM in their real life context. Through this exercise it is expected to identify organizational context and facilities management factors that affect organizational performance. Taken together, the literature review, the pilot study, and case studies, can provide an appropriate level of construct and content validity of the research. Postal survey research To reiterate the epistemological issues, the merits of extensive research are mainly attributed to the minimisation of ``observer-bias''. Sayer (1984) says that the fundamental difference between intensive and extensive research design is the type of questions asked. Intensive research questions are aimed at exploring the causal process in particular cases. Extensive research, on the other hand, is concerned with discovering formal relationships. For this study, the extensive research will be conducted to support the qualitative research, i.e. the case study research, which is the more dominant method, and to indicate formal relationships between the constructs. Where the objective of the intensive research is to build theory, the aim of the extensive research will be to provide further evidence to support the emergent theory. Furthermore, the findings from the extensive research will indicate the relationships in the qualitative data that would otherwise go unnoticed. The postal survey instruments in the research will be developed from the constructs emerging from the case studies. Consequently the statistical analysis will be conducted using a preliminary theoretical model, which will be developed from the case study findings, and will be somewhat exploratory in nature. The quantitative analysis is not to be regarded as a separate study but rather as part of satisfying the methodology of triangulation, providing further validity of the findings of the case studies and the definition of the constructs of performance measurements in FM and the relationships between these constructs. Data analysis The analysis of the quantitative data will be conducted in two stages: the first stage will uncover the main performance measurement tools used by the case study organizations and these tools will be the basis for the postal survey questionnaire. The second stage will consist of the iterative analysis of the qualitative data, using proposition-forming techniques, and of the quantitative data using statistical techniques. The methodology will follow through the structure illustrated in Figure 1. Contribution to knowledge In brief, the success of the contribution of this research will be assessed by the quality of the answers to the research objectives and questions. Based on the above findings, it will be possible to develop a test model of PM in FM, which is important both for FM theory building and prescriptions.

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Figure 1. General structure of the research design

Theoretical contribution By focusing on particular desired PM outcomes, and working back to discover the relative importance of PM variables in FM organizations, it is expected that an insight into the subject can be provided. Moreover, by undertaking path analysis showing correlation between variables, and integrating all the significant relationships into one model, it will be possible to build a comprehensive framework which will help to understand the PM in FM and its impact and value. Another academic contribution will be to include performance evaluation variables into existing frameworks of FM, which will ultimately provide an adapted model which researchers can make use of in their attempt to build generalised theories of FM. Furthermore, providing an all-encompassing definition for PM and operational measures of FM in terms of certain critical factors will primarily help to expand the theoretical and empirical literature base in this currently less developed area. Practical contribution The practical implications occurring from the results of this study are quite clear. It will enable the development of a methodology to ensure that performance measurements relate to FM. By finding the correlation between the performance variables, FM administrators can be equipped with an effective tool to determine the value and the level of acceptance of each factor contributing to the FM and to the overall organizational performance. Also this type of model will be particularly useful as it indicates the relationships between each constituent part, and will be helpful to determine which types of relationship will be more conducive to success. The administration needs to know the status of the organizational controllables so that they can be manipulated to make organization-wide improvements in facilities performance. The proposed model in turn will offer a reference to assess the

benefits of PM. By clarifying the nature of the relationship among variables of facilities performance, it will also be helpful to derive future decisions on investment FM activities. Problems and limitations The potential problem with the second phase of the research is the limited availability of empirical studies that can be used directly in developing more valid and reliable constructs for case studies. This, however, is expected to be overcome by analysing the pilot case study evidence carefully before deciding the final case study framework. As a result, the success of this phase will largely depend on the findings from the pilot study phase. The low level of PM in FM at the present time will also be a problem in phrasing the questionnaire constructs. Another potential problem will be the respondent bias. This study will speculate about causality based on the assumption that organizations undertake PM to improve performance and that they can accurately state whether such improvement has happened. But it is possible that improvements from other initiatives are being inaccurately attributed to FM respondents. Fall back position/forward view The unavailability of reasonable evidence to guide the latter phases of the research is a major limitation of this study. As a result, the success will largely depend on the findings from the previous phases. While this kind of interdependency adds more strength to research findings, it sometimes fails to make a worthwhile contribution to the understanding of the social phenomena if the approach is incomplete. To confront such an unanticipated situation, devising a contingency plan at the research design stage would be of great value. Failing to find suitable constructs and positive comments on PM in FM and its benefits will result in a more in-depth study to cover within and between case understanding. This more macro-level approach to case studies will help to determine the differences between PM activities and reasons for FM failures amongst different types of facilities, working at various stages in the technology life cycle. Although the exact relationships cannot be confirmed through these alternative causes of action, it will help to clarify this particularly focused subject in theory. This case study approach can also be expanded to develop a framework towards the construction of a knowledge-based system, which can be of future use, to incorporate valuable data of performance assessment derived from case studies.
References Amaratunga, D. and Baldry, D. (1999), ``Building performance evaluation of higher education properties: towards a process model'', Proceedings of COBRA 99 RICS (Construction and Building Research Conference, Vol. 2, Salford, UK, pp. 45-56. Amaratunga, D. and Baldry, D. (2000), ``Assessment of facilities management performance in higher education properties'', Proceedings of BVFM VI: The 6th FMGC Conference on Best Value FM Research: More from the Leading Edge, Sheffield, UK.

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Barrett, P. (1994), Facilities Management: Towards Best Practice, Blackwell Science, London. Centre for Facilities Management (CFM) (1992), An Overview of the FM Industry, Part 1, Centre for FM at Strathclyde Graduate Business School, Glasgow. Eisenhardt, K.M. (1989), ``Building theories from case study research'', Academy of Management Review, Vol. 14 No. 4, pp. 532-50. Hartley, J. (1994), ``Case studies in organizational research'', in Symon, G. and Cassell, C. (Eds), Qualitative Methods of Organizational Research, Sage Publications, London. Neely, A. (1999), ``The performance measurement revolution: why now and what next?'', International Journal of Operations & Production Management, Vol. 19 No. 2, pp. 205-28. Sayer, A. (1984), Method in Social Science: A Realist Approach, Hutchinson, London. Sinclair, D. and Zairi, M. (1995), ``Effective process management through performance measurement'', Business Process Re-engineering and Management Journal, Vol. 19 No. 1, pp. 75-88. Tellis, W. (1997), ``Application of a case study methodology'', The Qualitative Report, (online serial), Vol. 3 No. 3, Web site: http://www.nova.edu/ssss/QR/QR3-3/tellis2.html Tranfield, D. and Akhlaghi, F. (1995), ``Performance measures: relating facilities to business indicators'', Facilities, Vol. 13 No. 3, pp. 6-14. Yin, R.K. (1994), Case Study Research: Design and Methods, Sage Publications. New Bury Park, London, pp. 18-76.