2008 Public Sector Criteria Handbook.pdf

January 2008

Philippine Quality Award

Public Sector Criteria forPerformance Excellence andApplication Guidelines

The Philippine Quality Award trophy symbolizes the quest of Philippine corporationsand organizations for performance excellence through total quality management. Aglass sculpture executed by artist Ramon G. Orlina, it takes the subdued shape ofthe Philippine flag which symbolizes the highest level of national recognition foraward recipients.

Steps rising from different angles correspond to the major phases of the qualityjourney as exemplified by the award levels, as well as the corresponding strategyfor attaining quality excellence, here represented by the letter Q. The upwardmovement illustrates continuous improvement in the process of achieving corporate/organizational goals, sustaining this, and attaining a better quality of life for allstakeholders of the organization, in particular, and all Filipinos, in general.

Contents

1 Introduction

5 2008 Public Sector Criteria: Core Values, Concepts, and Framework

11 Key Characteristics of the Public Sector Criteria

13 2008 Public Sector Criteria for Peformance Excellence - Item Listing

14 2008 Public Sector Criteria for Performance Excellence

14 Preface: Organizational Profile17 1 Leadership20 2 Strategic Planning23 3 Customer and Public Focus26 4 Measurement, Analysis, and Knowledge Management29 5 Workforce Focus33 6 Process Management

36 7 Results

41 Glossary of Key Terms

49 2008 Public Sector Criteria: Category and Item Descriptions

64 Scoring System

66 Scoring Guidelines

69 2008 Criteria Response Guidelines

73 Summary of Eligibility Categories and Restrictions

75 Fees for the 2008 Award Cycle

76 Summary of Application Requirements

77 Eligibility Determination and Application Forms

Introduction

What is the Philippine Quality Award?The Philippine Quality Award (PQA) is the high-

est level of national recognition for exemplary organi-zational performance. Established through ExecutiveOrder No. 448, issued by President Fidel V. Ramos onOctober 3, 1997, the award is given to organizations inthe private and public sectors which excel in qualityand productivity.

It was institutionalized through the signing ofRepublic Act No. 9013 on February 28, 2001, alsoknown as the Philippine Quality Award Act. The PQAprovides an internationally comparable framework andcriteria for assessing organizational performance. It isa template for competitiveness based on the principlesof Total Quality Management.

The Award focuses on results, including customersatisfaction. It is not an award for product quality orservice quality but for a quality management systemwhich hinges on continuous improvement in the deliv-ery of products and/or services, and provides a way ofsatisfying and responding to customers' needs andrequirements.

Why was the Award established?

The adoption of the National Action Agenda forProductivity (NAAP) in 1996 as a comprehensive strat-egy to sustain socio-economic growth provided theimpetus to intensify productivity and quality improve-ment efforts in the country. This was further hastenedby increasing globalization which is raising quality stan-dards all over the world.

The PQA was established as a specific strategyof the NAAP to promote quality excellence in privateand public sector organizations and to provide an in-ternationally comparable framework and criteria forassessing organizational performance and recogniz-ing quality excellence.

The Awards Program promotes sharing of infor-mation and benchmarking of best practices and re-sults among organizations pursuing quality improve-ment.

Which organizations may apply for theAward?

Companies or organizations, from the private andpublic sectors, located and operating in the Philippinesare eligible to apply for the Award. The eligibility cat-egories are as follows:

• Private Sector: Manufacturing Companies;Service Companies; Agricultural Producers;Small and Medium Enterprises

• Public Sector: National Line Agencies; Gov-ernment-Owned and Controlled Corporations;Local Government Units

Who are involved in the Award process?The Awards Program is a public-private partner-

ship involving the following:

President of the Republic of the Philippines:Patron of the Award who approves, announces, andpersonally confers PQA on National Awardees

Department of Trade & Industry Secretary: AwardManager that is responsible for the conduct of theawards process and validates and endorses Presi-dent the list of awardees selected by the Board ofJudges.

PQA Streering Committee: Steering and policy-making body of the PQA, which is created under thePhilippine Council for Productivity by virtue of RepublicAct No. 448.

Management Committee: Implementing arm andsecretariat of the PQA Committee.

Public Sector Criteria for Performance Excellence and Application Guidelines 1

Development Academy of the Philippines: AwardAdministrator for the Public Sector

Philippine Society for Quality Control: Award Admin-istrator for the Private Sector

Board of Judges: Reviews and recommends awardrecipients to the Award Manager through the PQA Com-mittee. Judges are high level business executives andquality leaders from industry, academe andgovernment.They are appointed by the Award Manager perrecommendation of the PQA Committee

Team of Assessors: Evaluates award applicationsand prepares feedback reports. Assessors are well-selectedand specially trained business and quality practitioners fromthe industry, academe and government, and are chosen bythe PQA Committee.

Philippine Quality Award (PQA)Organizational Set-up

PATRON

AWARDMANAGER

PQACOMMITTEE

MANAGEMENTTEAM and otherWorking Groups

AWARDADMINISTRATORS

BOARD OFJUDGES and TEAM

OF ASSESSORS

Organized by thePQA Committee

Public Sector:DAPPrivate Sector: PSQ

Judges Assessors

President of theRepublic of the Philippines

DTI Secretary

Chair: DTI SecretaryVice Chairs: DAP President(Public Sector) and Head ofa National Movement forQual i ty and Product iv i ty(Private Sector)

Members- Heads of thefo l l ow ing governmentagenc ies : DBM, CSC,NWPC, TESDA, DTI-CIC;and six representatives fromthe private sector, who shallcome f rom the na t iona lqua l i t y movement /organization, the associationof quality practitioners, theassociation of managementpractitioners, employers orindustries; the associationo f schoo ls fo r h ighereducation or technologicalinstitution; the labor sector;and technical professionals.

What are the Criteria for PerformanceExcellence?

The Criteria for Performance Excellence pro-vide organizations with an integrated, results-ori-ented framework in implementing and assessingprocesses in managing operations. These are thebases for the feedback given to award applicantsafter examination by PQA assessors. The Criteriaconsist of seven Categories:

• Leadership• Strategic Planning• Customer and Public Focus• Measurement, Analysis, and Knowledge

Management• Workforce Focus• Process Management• Organizational Results

What is the basis for the Criteria?

The PQA Criteria are adapted from theMalcolm Baldrige National Quality Award (MBNQA)criteria of the United States. The National QualityAwards Program of other countries such as theAustralian Quality Awards, Japan National QualityAward, Singapore Quality Award, Prime Minister’sAward in Malaysia, and even the European QualityAwards, have all adapted the Baldrige criteria forinternational comparability.

What are the benefits gained fromapplying?

Each applicant organization gains an outsideperspective on its organizational performance basedon 550-600 hours of review by at least four busi-ness experts and quality practitioners from indus-try, academe and government. The results of thisreview are contained in a Feedback Report, outlin-ing strengths and areas for improvement based onthe Criteria. Feedback reports are used by organi-zations as inputs in strategic planning, in improv-ing productivity, and in sustaining their organiza-tional improvement programs and activities.

Philippine Quality Award2

How are Award recipients selected?

Award applications are reviewed and evaluatedby a Team of Assessors. Applicants getting highscores in the assessment of submitted applicationforms are site visited. The Board of Judges reviewsand recommends award recipients from among thesite-visited organizations to the Award Manager,through the PQA Committee. Decisions made bythe committee are final and are not subject toappeal.

What does an organization receive if itis an Award recipient?

The PQA is given annually to qualified organi-zations in the private and public sectors which havedemonstrated any of the following levels of perform-ance:

• Philippine Quality Award for PerformanceExcellence

- High level of excellence- National and global role model

• Recognition for Mastery in Quality nManagement

- Demonstrated superior results- Role model in the Philippines

• Recognition for Proficiency in Quality Management

- Achieved significant progress in building sound processes

• Recognition for Commitment to Quality Management

- Just beginning quality journey- Planted seeds of quality and

productivity

Award recipients shall receive a glass trophybearing the Seal of the President of the Philippinesand the PQA Logo. The trophy is designed and ex-ecuted by Artist Ramon G. Orlina. The Awards shallbe given by the President of the Philippines in appro-priate ceremonies usually held at the Malacañang Pal-ace.

How does PQA relate to other quality-related awards for organizations?

In the interest of rationalizing all existing quality/productivity awards for organizations in both privateand public sectors, the PQA represents the apex ofall awards, the highest level of recognition for exem-plary organizational performance.

Considering that there are different levels of rec-ognition, previous winners of other award programs suchas the Department of Interior and Local Government(DILG) Gawad Pamana ng Lahi, Department of Tradeand Industry (DTI) Golden Shell, DTI-Center for LabourRelations Assistance (CLARA) LMC Awards, Bishops-Businessmen Conference's (BBC) Sikap-Gawa Indus-trial Peace Award, Asian Institute of Management andthe Philippine Society for Quality Control (now knownas Philippine Society for Quality) Outstanding QualityCompany of the Year, among others, are all qualifiedto apply for the Commitment, Proficiency, Mastery oreven the Performance Excellence Levels of the AwardsProgram. Figure 1 above shows the relationship of theother quality-related awards with the different levels ofthe PQA.

The rationale behind the ladderized approach isto encourage organizations to strive for excellencethrough continuous improvement.

What is expected of award recipients?

Award recipients are required to share information ontheir successful performance and quality

Levels of the Philippine Quality Awards in relation to other quality-related Awards

PSQC OQCY Award

Recognition forProficiency inQuali ty

Recognition forCommitment toQuali ty

DILG Gawad Pamana ng LahiDTI Golden Shell AwardDTI Clara LMC AwardBBC Sikap-GawaIndustrial Peace AwardISO 9000 & ISO 14000

DTI Golden Shell AwardDTI Clara LMC AwardBBC Sikap-GawaIndustrial Peace AwardAIM Management Award

Recognition forMastery in Quality

Philippine Quality Award forPerformance Excellence

Figure 1


strategies with other organizations in the Philippines.However, they are not expected to share proprietaryinformation, even if such information was part of theirAward application.

An annual conference featuring PQA awardees will bethe venue for sharing information aside from hostingobservational tours by the awardee organization andprinting of abstracts, application summaries and othermaterials by said awardees.

Award recipients may publicize and advertise receiptof Award. They are allowed to use the PQA Logo onthe organization’s stationery, in advertisements andmaterials used for advertising and promotion, providedthat these follow certain guidelines among which are:

1. The PQA Logo shall be used only by theorganization and shall always be usedtogether with the name of the organization,the Award Level and year the Award wasconferred.

2. The PQA Logo shall not be directly applied onthe organization’s products, programs orservices, and its packaging, in such a way asto imply that the product, program or serviceitself is certified by the Award Manager.

How does an organization apply?

An applicant organization needs to submit an applica-tion package that consists of three parts:

1. an Eligibility Determination Form showing thateligibility has been approved;

2. a completed Application Form; and

3. an application report consisting of a BusinessOverview and responses to requirements ofeach criteria.

Where to apply?

Applicant organizations may get application forms fromand submit application package to:

Award Manager

Department of Trade and IndustryAttn.: Exec. Dir. Virgilio P. FulgencioCenter for Industrial Competitiveness2/F, Oppen Building349 Sen. Gil Puyat Avenue

Makati CityTel. No.: 890-48-61Fax No.: 890-48-89E-mail: [email protected]

Award Administrator for Public Sector

Development Academy of the PhilippinesAttn.: Mr . Arnel D. Abanto

Officer-in-chargeOffice of the Senior Vice-President for Programs4/F, DAP Bldg., San Miguel AvenueOrtigas Center, Pasig CityTelefax No.: 631-21-37E-mail: [email protected]: http://www.dap.edu.ph

Award Administrator for Private Sector

Philippine Society for Quality (PSQ)Attn.: Ms. Zenaida Veloso

Suite 3-2, Sunshine Condominium9633 Kamagong St., Makati CityTel. No.: 899-5925Fax No.: 896-4464E-mail: [email protected]: http://www.psq.org.ph


Criteria Purposes

The Criteria are the basis for organizational self-as-sessments, for making Awards, and for giving feed-back to applicants. In addition, the Criteria have threeimportant roles in strengthening Philippine competi-tiveness:

• to help improve organizational performancepractices, capabilities, and results;

• to facilitate communication and sharing ofbest practices information among Philippineorganizations of all types; and

• to serve as a working tool for understanding andmanaging performance and for guiding planningand opportunities for learning.

Criteria for Performance ExcellenceGoals

The Criteria are designed to help organizations use analigned approach to organizational performance man-agement that results in:

• delivery of ever-improving value to the public andother customers, contributing to improvedquality of public service;

• improvement of overall organizational effective-ness and capabilities as a public serviceprovider; and

• organizational and personal learning.

Core Values and Concepts

The Criteria are built upon a set of interrelated CoreValues and Concepts:

• visionary leadership ppppppppppp• public-focused excellence ppppppppp• organizational and personal learning

pppp• valuing employees and partners• agility

• focus on the future• managing for innovation• management by fact• social responsibility• focus on results and creating value• systems perspective

These values and concepts, described below,are embedded beliefs and behaviors found in high-per-forming organizations. They are the foundation for in-tegrating key organizational requirements within a re-sults-oriented framework that creates a basis for ac-tion and feedback.

Visionary Leadership

An organization’s senior officials should set di-rections and create a customer focus, clear and vis-ible values, and high expectations. The directions, val-ues, and expectations should balance the needs of allyour stakeholders. Your leaders should ensure thecreation of strategies, systems, and methods for achiev-ing excellence, stimulating innovation, and buildingknowledge and capabilities. The values and strategiesshould help guide all activities and decisions of yourorganization. Senior officials should inspire and moti-vate your entire workforce and should encourage allemployees to contribute, to develop and learn, to beinnovative, and to be creative. Senior officials shouldbe responsible to your organization's governance bodyfor their actions and performance. The governance bodyshould be responsible ultimately to all your key stake-holders for the ethics, vision, actions, and performanceof your organization and its senior officials.

Senior officials should serve as role modelsthrough their ethical behavior and their personal involve-ment in planning, communications, coaching, devel-opment of future leaders, review of organizational per-formance, and employee recognition. As role models,they can reinforce values and expectations while build-ing leadership, commitment, and initiative throughoutyour organization.

2008 Public Sector Criteria: Core Values, Concepts, and Framework


Public-Focused Excellence

Quality and performance are judged by anorganization’s customers. Thus, your organization musttake into account all product and service features andcharacteristics and all modes of customer access thatcontribute value to your customers. Such behavior leadsto customer satisfaction, public confidence, trust, andresponsiveness to public needs. Public-focused ex-cellence has both current and future components: un-derstanding today’s public needs and anticipating fu-ture public needs.

Value and satisfaction may be influenced by manyfactors throughout your customers’ overall service ex-periences. These factors include your organization’srelationship with customers that helps build trust, con-fidence, and accountability.

Public-focused excellence means much morethan reducing errors, merely meeting specifications,or reducing complaints. Nevertheless, reducing errorsand eliminating causes of dissatisfaction contribute toyour customers’ view of your organization and thus alsoare important parts of public-focused excellence. In ad-dition, your organization’s success in recovering fromerrors and mistakes (“making things right for your cus-tomer”) is crucial to satisfying customers and buildingpublic trust and confidence.

Public-focused organizations address not onlythe product and service characteristics that meet ba-sic customer requirements but also those features andcharacteristics that differentiate products and servicesfrom similar offerings. Such differentiation may be basedupon new or modified offerings, combinations of prod-uct and service offerings, customization of offerings,multiple access mechanisms, rapid response, or con-sultative process.

Public-focused excellence is thus a strategic con-cept. It is directed toward building lasting public trustand confidence. It demands constant sensitivity tochanging and emerging customer and public require-ments and to the factors that drive customer satisfac-tion. It demands anticipating changes in stakeholderrequirements. Therefore, public-focused excellencedemands awareness of developments in stakeholders'issues, as well as rapid and flexible response to theirneeds.

Organizational and Personal Learning

Achieving the highest levels of organizational per-formance requires a well-executed approach to organi-zational and personal learning. Organizational learningincludes both continuous improvement of existing ap-

proaches and adaptation to change, leading to newgoals and/or approaches. Learning needs to be em-bedded in the way your organization operates. Thismeans that learning (1) is a regular part of daily work;(2) is practiced at personal, work unit, and organiza-tional levels; (3) results in solving problems at theirsource (“root cause”); (4) is focused on sharing knowl-edge throughout your organization; and (5) is drivenby opportunities to effect significant change and to dobetter. Sources for learning include employees’ ideas,research and development (R&D), stakeholders’ in-put, best practice sharing, and benchmarking.

Organizational learning can result in (1) enhanc-ing value to customers through new and improved prod-ucts and services; (2) developing new opportunities;(3) reducing errors, defects, waste, and related costs;(4) improving responsiveness and cycle time perfor-mance; (5) increasing productivity and effectivenessin the use of all resources throughout your organiza-tion; and (6) enhancing your organization’s performancein fulfilling its mandate.

Employees’ success depends increasingly onhaving opportunities for personal learning and practic-ing new skills. Organizations invest in employees’personal learning through education, training, and otheropportunities for continuing growth. Such opportuni-ties might include job rotation and increased pay fordemonstrated knowledge and skills. On-the-job train-ing offers a cost-effective way to train and to betterlink training to your organizational needs and priori-ties. Education and training programs may benefitfrom advanced technologies, such as computer- andInternet-based learning and satellite broadcasts.

Personal learning can result in (1) more satis-fied and versatile employees who stay with the orga-nization, (2) organizational cross-functional learning,(3) an improved environment for innovation, and (4)the building of your organization's knowledge assets.

Thus, learning is directed not only toward betterproducts and services but also toward being more re-sponsive, adaptive, and efficient -- giving your organi-zation performance advantages.

Valuing Employees and Partners

An organization’s success depends increasinglyon the knowledge, skills, creativity, and motivation ofits employees and partners.

Valuing employees means committing to theirsatisfaction, development, and well-being. Increasingly,this involves more flexible, high-performance work prac-tices tailored to employees with diverse workplace


Organizations need to build internal and external part-nerships to better accomplish overall goals. Internalpartnerships might include labor-management coop-eration, such as agreements with employees organi-zations. Partnerships with employees might entailemployee development, cross-training, or new workorganizations, such as high-performance work teams.Internal partnerships also might involve creating net-work relationships among your work units to improveflexibility, responsiveness, and knowledge sharing.

External partnerships might be with customers, sup-pliers, educational institutions, non-government orga-nizations, financial institutions and other internationalorganizations. Strategic partnerships or alliances areincreasingly important kinds of external partnerships.Such partnerships might offer entry into new marketsor a basis for new products or services. Also, partner-ships might permit the blending of your organization’score competencies or leadership capabilities with thecomplementary strengths and capabilities of partners.

Successful internal and external partnerships developlonger-term objectives, thereby creating a basis for mu-tual investments and respect. Partners should addressthe key requirements for success, means for regularcommunication, approaches to evaluating progress,and means for adapting to changing conditions. In somecases, joint education and training could offer a cost-effective method for employee development.

Agility

Success in globally competitive markets de-mands agility -- a capacity for rapid change and flex-ibility. All aspects of e-commerce require and enablemore rapid, flexible, and customized responses. Or-ganizations face ever-shorter cycles for the introduc-tion of new/improved products and services, as wellas for faster and more flexible response to customers.Major improvements in response time often require sim-plification of work units and processes and/or the abil-ity for rapid changeover from one process to another.Cross-trained and empowered employees are vital as-

sets in such a demanding environment.

A major success factor in meeting competitivechallenges is the design-to-introduction (product/ser-vice initiation) cycle time. To meet the demands ofrapidly changing global markets, organizations needto carry out stage-to-stage integration (such as con-current engineering) of activities from research/conceptto implementation.

All aspects of time performance now are morecritical, and cycle time has become a key processmeasure. Other important benefits can be derived fromthis focus on time; time improvements often drive si-multaneous improvements in organization, quality,cost, and productivity.

Focus on the Future

In today’s competitive environment, a focus onthe future requires understanding the short- and longer-term factors that affect your organization and stake-holders. Pursuit of sustainable growth and good gov-ernance requires a strong future orientation and a will-ingness to make long-term commitments to key stake-holders -- your customers/community, employees,suppliers and partners. Your organization’s planningshould anticipate many factors, such as customers’expectations, new business and partnering opportuni-ties, the increasingly global marketplace, technologi-cal developments, the evolving e-commerce environ-ment, new customer and public segments, evolvingregulatory requirements, community and societal ex-pectations, and strategic moves by partners. Strate-gic objectives and resource allocations need to ac-commodate these influences. A focus on the futureincludes developing employees and suppliers, creat-ing opportunities for innovation, and valuing public ac-countability.

Managing for Innovation

Innovation means making meaningful change toimprove an organization’s products, services, and pro-cesses and to create new value for the organization’sstakeholders. Innovation should lead your organiza-tion to new dimensions of performance. Innovation isno longer strictly the purview of research and develop-ment departments; innovation is important for all as-pects of your business and all processes. Organiza-tions should be led and managed so that innovationbecomes part of the culture and is integrated into dailywork and should be supported by your performanceimprovement system.

and home life needs. Major challenges in the area ofvaluing employees include (1) demonstrating your lead-ers’ commitment to your employees’ success, (2) rec-ognition that goes beyond the regular compensationsystem, (3) development and progression within yourorganization, (4) sharing your organization’s knowledgeso your employees can better serve your customersand contribute to achieving your strategic objectives,(5) creating an environment that encourages risk tak-ing, and (6) creating a supportive environment for adiverse workforce.


A major consideration in performance improve-ment and change management involves the selectionand use of performance measures or indicators. Themeasures or indicators you select should best repre-sent the factors that lead to improved customer, op-erational, and financial performance. A comprehen-sive set of measures or indicators tied to customerand/or organizational performance requirements rep-resents a clear basis for aligning all processes withyour organization’s goals. Through the analysis of datafrom your tracking processes, your measures or indi-cators themselves may be evaluated and changed tobetter support your goals.

Public Accountability and Citizenship

An organization’s leaders should stress its ac-countability to the public and the need to practice goodcitizenship. Leaders should be role models for yourorganization in focussing on business ethics and pro-tection of public health, safety, and the environment.Protection of health, safety, and the environment in-cludes your organization’s operations, as well as thelife cycles of your products and services. Also, organi-zations should emphasize resource conservation andwaste reduction at the source. Planning should antici-pate adverse impacts from production, distribution,transportation, use, and disposal of your products.Effective planning should prevent problems, provide fora forthright response if problems occur, and make avail-

able information and support needed to maintain pub-lic awareness, safety, and confidence.

For many organizations, the product design stageis critical from the point of view of public accountabil-ity. Design decisions impact your service delivery pro-cesses. Effective design strategies should anticipatesustainable development concerns and responsibili-ties.

Organizations should not only meet all local, re-gional/provincial, and national laws and regulatory re-quirements, but they should treat these and relatedrequirements as opportunities for improvement “beyondmere compliance.” Organizations should stress ac-countability in all stakeholder transactions and inter-actions. Highly ethical conduct should be a require-ment of and should be monitored by the organization'sgovernance body.

Practicing good citizenship refers to leadershipand support -- within the limits of an organization’sresources -- of publicly important purposes. Such pur-poses might include improving education and healthcare in your community, environmental excellence,resource conservation, community service, improvingthe sector, industry and business practices, and shar-ing nonproprietary information. Leadership as a gov-ernment entity also entails influencing other organiza-tions, private and public, to partner for these purposes.For example, your organization might lead or partici-pate in efforts to help define the obligations of yourorganization to its communities. Managing public ac-countability requires the use of appropriate measuresand leadership responsibility for those measures.

Focus on Results and Creating Value

An organization’s performance measurementsneed to focus on key results. Results should be usedto create and balance value for your key stakeholders-- local and international community, general public,employees, suppliers and partners. By creating valuefor your key stakeholders, your organization buildspublic confidence and contributes to growing theeconomy. To meet the sometimes conflicting andchanging aims that balancing value implies, organiza-tional strategy should explicitly include key stakeholderrequirements. This will help ensure that actions andplans meet differing stakeholder needs and avoid ad-verse impacts on any stakeholders. The use of a bal-anced composite of leading and lagging performancemeasures offers an effective means to communicateshort- and longer-term priorities, monitor actual perfor-mance, and provide a clear basis for improving results.

Management by Fact

Organizations depend on the measurement andanalysis of performance. Such measurements shouldderive from organizational needs and strategy, and theyshould provide critical data and information about keyprocesses, outputs, and results. Many types of dataand information are needed for performance manage-ment. Performance measurement should include cus-tomer, product, and service performance; comparisonsof operational, public, and competitive performance;and supplier, employee, and cost and financial perfor-mance.

Analysis refers to extracting larger meaning fromdata and information to support evaluation, decisionmaking, and operational improvement. Analysis en-tails using data to determine trends, projections, andcause and effect that might not otherwise be evident.Analysis supports a variety of purposes, such as plan-ning, reviewing your overall perfomance, improving op-erations, change management, and comparing yourperformance with the private sector or with “best prac-tices” benchmarks.


PQA Public Sector Criteria for Performance Excellence Framework:A Systems Perspective

Organizational Profile:Environment, Relationships, and Challenges

2StrategicPlanning

5Workforce Focus

7Results

3Customer andPublic Focus

6Process

Management

1Leadership

4Measurement, Analysis, and Knowledge Management

Systems Perspective

The PQA Criteria provide a systems perspectivefor managing your organization to achieve performanceexcellence. The Core Values and the seven PQA Cat-egories form the building blocks and the integratingmechanism for the system. However, successful man-agement of overall performance requires organization-specific synthesis, alignment and integration. Synthe-sis means looking at your organization as a wholeand builds upon key business requirements, includingyour strategic objectives and action plans.

Alignment means using the key linkages amongrequirements given in the PQA Categories to ensureconsistency of plans, processes, measures, and ac-tions. Integration means the individual components ofyour performance management system operate in afully interconnected manner.

These concepts are depicted in the PQA frame-work on page 9. A systems perspective includes yoursenior officals and leaders’ focus on strategic direc-tions and on your customers. It means that your se-nior officials and leaders monitor, respond to, andmanage performance based on your organizational re-sults. A systems perspective also includes using your

measures/indicators to link your key strategies withyour key processes and align your resources to im-prove overall performance and satisfy customers, andstakeholders.

Thus, a systems perspective means managingyour whole organization, as well as its components,to achieve success.

Criteria for Performance ExcellenceFramework

The Core Values and Concepts are embodiedin seven Categories, as follows:

1 Leadership2 Strategic Planning3 Customer and Public Focus4 Measurement, Analysis, and

Knowledge Management5 Workforce Focus6 Process Management7 Results


The figure above provides the framework connect-ing and integrating the Categories.

From top to bottom, the framework has the fol-lowing basic elements.

Organizational Profile

Your Organizational Profile (top of figure) sets the con-text for the way your organization operates. Your envi-ronment, key working relationships, and strategic chal-lenges serve as an overarching guide for your organi-zational performance management system.

System Operations

The system operations are composed of the six PQACategories in the center of the figure that define youroperations and the results you can achieve.

Leadership (Category 1), Strategic Planning (Category2), and Customer and Market Focus (Category 3) rep-resent the leadership triad. These Categories are placedtogether to emphasize the importance of a leadershipfocus on strategy and customers. Senior officials/lead-ers set your organizational direction and seek futureopportunities for your organization.

Workforce Focus (Category 5), Process Management(Category 6), and Results (Category 7) represent theresults triad. Your organization’s employees and itskey processes accomplish the work of the organiza-tion that yields your organizational results.

All actions point toward Results -- a composite of cus-tomer, product and services, financial, and internaloperational performance results, including human re-source results and public accountability results.

The horizontal arrow in the center of the frameworklinks the leadership triad to the results triad, a linkagecritical to organizational success. Furthermore, thearrow indicates the central relationship between Lead-ership (Category 1) and Results (Category 7). The two-headed arrows indicate the importance of feedback inan effective performance management system.

System Foundation

Measurement, Analysis, and Knowledge Management(Category 4) are critical to the effective managementof your organization and to a fact-based knowledge-driven system for improving performance andcompetitiveness. Measurement, analysis, andknowledge serve as a foundation for the performancemanagement system.

Criteria Structure

The seven Criteria Categories shown in the figure aresubdivided into Items and Areas to Address.

Items

There are 19 Items, each focusing on a majorrequirement. Item titles and point values are given onpage 13. The Item format is shown on page 70.

Areas to Address

Items consist of one or more Areas to Address (Areas).Organizations should address their responses to thespecific requirements of these Areas.

10 Philippine Quality Award

1. The Criteria focus on organizational results.

The Criteria focus on the key areas of organiza-tional performance given below.

Organizational performance areas:

a. public and other customer-focused resultsb. product and service resultsc. financial and field performance resultsd. human resource resultse. organizational effectiveness results,

including key internal operational performance measures

f. governance and public responsibility results

The use of this composite of indicators is intendedto ensure that strategies are balanced -- that theydo not inappropriately trade off among importantstakeholders, objectives, or short- and longer-termgoals.

2. The Criteria are non-prescriptive andadaptable.

The Criteria are made up of results-oriented re-quirements. However, the Criteria do not pre-scribe:

l that your organization should or should nothave departments for quality, planning, or otherfunctions;

l how your organization should be structured;or

l that different units in your organization shouldbe managed in the same way.

These factors differ among organizations, and theyare likely to change as needs and strategies evolve.The Criteria are nonprescriptive for the followingreasons:

1. The focus is on results, not on procedures,

tools, or organizational structure. Organiza-tions are encouraged to develop and demon-strate creative, adaptive, and flexible ap-proaches for meeting basic requirements.Nonprescriptive requirements are intended tofoster incremental and major (“breakthrough”)improvements, as well as basic changethrough innovation.

2. The selection of tools, techniques, systems,and organizational structure usuallydepends on factors such as business typeand size, organizational relationships, yourorganization’s stage of development, andemployee capabilities and responsibilities.

3. A focus on common requirements,rather thanon common procedures, fosters better under-standing, communication, sharing, and align-ment, while supporting innovation and diver-sity in approaches.

3. The Criteria support a systems perspective tomaintaining organization-wide goalalignment.

The systems perspective to goal alignment is em-bedded in the integrated structure of the CoreValues and Concepts, the Organizational Profile,the Criteria, and the results-oriented, cause-effectlinkages among the Criteria Items.

Alignment in the Criteria is built around connect-ing and reinforcing measures derived from yourorganization’s processes and strategy. Thesemeasures tie directly to customer value and tooverall performance. The use of measures thuschannels different activities in consistent directionswith less need for detailed procedures, central-ized decision making, or process management.Measures thereby serve both as a communica-tions tool and a basis for deploying consistentoverall performance requirements. Such alignmentensures consistency of purpose while also sup-porting agility, innovation, and decentralized deci-sion making.

Key Characteristics of the Public Sector Criteria


A systems perspective to goal alignment, particularlywhen strategy and goals change overtime, requiresdynamic linkages among Criteria Items. In the Crite-ria, action-oriented cycles of learning take place viafeed back between processess and results.

The learning cycles have four, clearly defined stages:

1. planning, including design of processes, se-lection of measures, and deployment of re-quirements;

2. execution of plans;

3. assessment of progress and capturing newknowledge, taking into account internal andexternal results; and

4. revision of plans based upon assessmentfindings, learning, new inputs, and newrequirements.

4. The Criteria support goal-based diagnosis.

The Criteria and the Scoring Guidelines make upa two-part diagnostic (assessment) system. TheCriteria are a set of 19 performance-oriented re-quirements. The Scoring Guidelines spell out theassessment dimensions -- Process and Results-- and the key factors used to assess each di-mension. An assessment thus provides a profileof strengths and opportunities for improvementrelative to the 19 performance-oriented require-ments and relative to process and performancematurity as determined by the Scoring Guidelines.In this way, assessment leads to actions thatcontribute to performance improvement in all ar-eas, as described in the shaded box on page 14.This diagnostic assessment is a useful manage-ment tool that goes beyond most performancereviews and is applicable to a wide range of strat-egies and management systems, and types oforganizations.


2008 Public Sector Criteria for Performance Excellence - Item Listing

P Preface: Organizational Profile

P.1 Organizational DescriptionP.2 Organizational Challenges

2008 Categories and Items Point Values

1 Leadership 120

1.1 Organizational Leadership 701.2 Governance & Social Responsibilities 50

2 Strategic Planning 85

2.1 Strategy Development 402.2 Strategy Deployment 45

3 Customer and Public Focus 85

3.1 Customer and Public Knowledge 403.2 Customer Relationships and Satisfaction 45

4 Measurement, Analysis, and Knowledge Management 90

4.1 Measurement, Analysis and Improvement of 45Organizational Performance

4.2 Management of Information, Information Technology,and Knowledge 45

5 Workforce Focus 85

5.1 Workforce Engagement 455.2 Workforce Environment 40

6 Process Management 85

6.1 Work Systems Design 356.2 Work Process Management and Improvement 50

7 Results 450

7.1 Product & Service Outcomes 1007.2 Customer-Focused Outcomes 707.3 Financial and Market Outcomes 707.4 Workforce-Focused Outcomes 707.5 Process Effectiveness Outcomes 707.6 Leadership Outcomes 70

TOTAL POINTS 1000

Note: The Scoring System used with the Criteria Items in a PQA assessment can be found on pages 64-68.


2008 Public Sector Criteria for Performance Excellence

P Preface: Organizational Profile

The Organizational Profile is a snapshot of your organization, the KEY influences on HOW youoperate and the KEY challenges you face.

P.1 Organizational Description: What are your key organizational challenges?

Describe your organization’s operating environment and your KEY relationships with cus-tomers, suppliers, partners and stakeholders.Within your response, include answers to the following questions:

a. Organizational Environment

(1) What are your organization's main products and services? What are the delivery mecha-nisms used to provide your products and services to your CUSTOMERS?

(2) What is your organizational culture? What are your stated mandate/PURPOSE, VISION,MISSION, and VALUES?

(3) What is your EMPLOYEE profile? What are your employee groups and segments? Whatare their KEY requirements and expectations? What are their educational levels? Whatare your organization's EMPLOYEE and job DIVERSITY, organized bargaining units, KEY ben-efits, and special health and safety requirements?

(4) What are your major facilities, technologies, and equipment?

(5) What is the regulatory environment under which your organization operates? What arethe applicable occupational health and safety regulations; accreditation, certification, orregistration requirements; relevant standards; and environmental, financial, and service/product regulations?

b. Organizational Relationships

(1) What are your organizational structure and GOVERNANCE system? What are the reportingrelationships among your GOVERNANCE board. SENIOR LEADERS, and parent organizations, asappropriate?

Importance of Beginning with Your Organizational ProfileYour Organizational Profile is critically important because

O it is the most appropriate starting point for self-assessment and for writing an application;O it helps you identify potential gaps in KEY information and focus on key performance requirements and results;O it is used by the Assessors and Judges in application review, including the site visit, to understand your organization and what

you consider important (you will be assessed using the Criteria requirements in relation to your organization’s environment,relationships, influences, and challenges, as presented in your Organizational Profile); and

O it also may be used by itself for an initial self-assessment. If you identify topics for which conflicting, little, or no information isavailable, it is possible that the Organizational Profile can serve as your complete assessment, and you can use these topicsfor action planning.


(2) What are your KEY CUSTOMER and STAKEHOLDER groups and CONSTITUENCIES, as appropriate?What are their KEY requirements and expectations for your products,services and opera-tions? What are the differences in these requirements and expectations among CUSTOMER

and STAKEHOLDER groups and CONSTITUENCIES?

(3) What are your most important types of suppliers,PARTNERS, COLLABORATORS, and distribu-tors? What role do suppliers,PARTNERS, COLLABORATORS, and distributors play in your WORK

SYSTEMS and the production and delivery of your KEY products and services? What roles,ifany, do they play in your organizational INNOVATION PROCESSES? What are your most impor-tant supply chain requirements?

(4) What are your KEY supplier and CUSTOMER partnering relationship and communicationmechanisms?

Notes:N1. Mechanisms for product and service delivery to your end-use CUSTOMERS (P.1a[1]) might be direct, or through

accredited service providers (e.g. voluntary/civic organization, non-government organization, cooperatives), at-tached bureaus, or partner agencies.

N2. Employee groups and segments (including organized bargaining units) (P.1a[3]) might be based on the type ofemployment or contract reporting relationship, location, tour of duty, work environment , family-friendly policies, orother factors.

N3. CONSTITUENCIES (P.1b[2]) might be based on product or service lines or features, delivery channels, transactionvolume, geography, or other factors that are important to your organization to define related market characteristics.

N4. Customer and stakeholder group and CONSTITUENCY requirements (P.1b[2] might include on-time delivery , low defectlevels, safety, security, on-going fees reductions, electronic communication, rapid response, follow-on service,socially responsible behavior, and community service. For some nonprofit organizations, requirements also mightinclude administrative cost reductions, at-home services, and rapid response to emergencies.

N5. Communication mechanisms (P.1b[4]) should be two-way and might be in person, via-email, Web-based, or bytelephone. For many organizations, these mechanisms may change as marketplace, customer, or stakeholderrequirements change.

N6. While some government organizations offer products and services (P.1a[1]), many might appropriately interpret thisphrase as programs or projects and services.

N7. Customers (P.1a[1]) are the users and potential users of your products, program, and services. In public sectororganizations, customers might include members, taxpayers, citizens, recipients, clients, and beneficiaries.

N8. Many nonprofit organizations rely heavily on volunteers to accomplish their work. These organizations should includevolunteers in the discussion of their workforce (P.1a[3]).

N9. For nonprofit organizations, relevant industry standards (P.1a[5]) might include industrywide codes of conduct andpolicy guidance. The term “industry” is used throughout the Criteria to refer to the sector in which your operate. Fornonprofit organizations, this sector might be charitable organizations, professional associations and societies, reli-gious organizations, or government entities - or a subsector of one of these.

N10. For some nonprofit organizations, governance and reporting relationships (P.1b[1]) might include relationships withmajor agency, foundation, or other funding sources.

For definitions of key terms presented throughout the Criteria and Scoring Guidelines text in SMALL CAPS/ARIAL, see Glossary of Key Terms on page 41.

Frequently, several questions are grouped under one number (e.g., P.1a[3]). These questions are relatedand do not require separate responses. These multiple questions serve as a guide in understanding the fullmeaning of the information being requested.

Item notes serve three purposes: (1) to clarify terms or requirements presented in an Item, (2) to giveinstructions on responding to the Item requirements, and (3) to indicate key linkages to other Items. In allcases, the intent is to help you respond to the Item requirements.

Notes:


P.2 Organizational Challenges: What are your key organizational challenges?

Describe your organization's comparative environment, your KEY STRATEGIC CHALLENGES, andadvantages, and your system for PERFORMANCE improvement.Within your response, include answers to the following questions:

a. COMPARATIVE ENVIRONMENT

(1) What is your comparative position? What is your relative size and growth in the sector ormarkets served? What are the numbers and types of comparable government/privateorganization for your organization?

(2) What are the principal factors that determine your success relative to similar organiza-tions? What are any KEY changes taking place that affect your comparativeadvantage,including opportunities for INNOVATION and collaboration, as appropriate?

(3) What are your KEY available sources of comparative and competitive data from within yoursector? What are your KEY available sources of comparative data from outside your indus-try? What limitations, if any, are there in your ability to obtain these data?

b. STRATEGIC CONTEXT

What are your KEY business, operational, and human resource STRATEGIC CHALLENGES and advan-tages? What are your KEY STRATEGIC CHALLENGES asociated with organizational SUSTAINABILITY?

c. PERFORMANCE IMPROVEMENT SYSTEM

What are the KEY elements of your PERFORMANCE improvement system, including your evaluationand LEARNING PROCESSES?

N1. Principal factors (P.2a[2]) might include differentiators such as good governance, transparency, acces-sibility, public and administrative support services, transaction time and cost, and e-services.Differentiators also might include relative influence with decision makers, ratio of administrative costs toprogrammatic contributions, past reputation for program or service delivery, and wait times for service.

N2. Strategic challenges and advantages (P.2b) might include technology, products, your operations, yourindustry, globalization, your value chain, and people.

N3. Performance improvement (P.2c) is an assessment dimension used in the Scoring System to evaluatethe maturity of organizational approaches and deployment (see pages 69-72). This question is in-tended to help you and the Assessors set an overall context for your approach to performance improve-ment. Overall approaches to performance improvement might include implementing a Lean Enter-prise System, applying Six Sigma methodology, use of ISO 9000:2000 standards, or employing otherprocess improvement tools.

N4. Nonprofit organizations frequently are in a very competitive environment; they often must compete withother organizations and with alternative sources for similar services to secure financial and volunteerresources, membership, visibility in appropriate communities, and media attention.

N5. The term "business" (P.2b) is used throughout the Criteria to refer to your main mission area or mandate.

Page Limit

For PQA applicants, the Organizational Profile is limited to five pages. These pages are not counted in theoverall application page limit. Typing and format instructions for the Organizational Profile are the same as for theapplication. These instructions are given on page 76.


Notes:

1 Leadership (120 pts.)

The Leadership Category examines HOW your organization’s SENIOR LEADERS guide and sustain your orga-nization. Also examined are your organization’s GOVERNANCE and HOW your organization addresses itsethical, legal, and community responsibilities.

1.1 Senior Leadership: How do your senior officials lead? (70 pts.)

Describe HOW SENIOR LEADERS guide and sustain your organization. Describe HOW SENIOR LEADERScommunicate with your EMPLOYEE and encourage HIGH PERFORMANCE.Within your response, include answers to the following questions:

a. VISION and VALUES

(1) HOW do SENIOR LEADERS set organizational VISION and VALUES? HOW do SENIOR LEADERS DEPLOY

your organization’s VISION and VALUES through your LEADERSHIP SYSTEM, to the EMPLOYEE, toKEY suppliers and PARTNERS, and to CUSTOMERS and other STAKEHOLDERS, as appropriate? HOW

do SENIOR LEADERS’ personal actions reflect a commitment to the organization’s VALUES?(2) HOW do SENIOR LEADERS personally promote an organizational environment that fosters,

requires, and results in legal and ETHICAL BEHAVIOR?(3) HOW do SENIOR LEADERS create a SUSTAINABLE organization? HOW do SENIOR LEADERS create an

environment for organizational PERFORMANCE improvement, the accomplishment of yourMISSION and STRATEGIC OBJECTIVES, INNOVATION, competitive or role model PERFORMANCE leader-ship, and organizational agility? HOW do they create an environment for organizational andEMPLOYEE LEARNING? HOW do they personally participate in succession planning and thedevelopment of future organizational leaders?

b. Communication and Organizational PERFORMANCE

(1) HOW do SENIOR LEADERS communicate with and engage the entire WORKFORCE? HOW doSENIOR LEADERS encourage frank, two-way communication throughout the organization?HOW do SENIOR LEADERS communicate KEY decisions? HOW do SENIOR LEADERS take an activerole in reward and recognition programs to reinforce HIGH PERFORMANCE and a CUSTOMER andbusiness focus?

(2) HOW do SENIOR LEADERS create a focus on action to accomplish the organization’s objec-tives, improve PERFORMANCE, and attain its VISION? What PERFORMANCE MEASURES do SENIOR

LEADERS regularly review to inform them on needed actions? HOW do SENIOR LEADERS includea focus on creating and balancing VALUE for CUSTOMERS and other STAKEHOLDERS in theirorganizational PERFORMANCE expectations?

N1. Organizational vision (1.1a[1]) should set the context for strategic objectives and action plans, which aredescribed in Items 2.1 and 2.2.

N2. A sustainable organization (1.1a[3]) is capable of addressing current business needs and possessesthe agility and strategic management to prepare successfully for its future business and market environ-ment. In this context, the concept of innovation includes both technological and organizational innovationto succeed in the future. A sustainable organization also ensures a safe and secure environment for theworkforce and other key stakeholders.

N3. A focus on action (1.1b[2]) considers the workforce, the work systems, and the hard assets of yourorganization. It includes ongoing improvements in productivity that may be achieved through eliminatingwaste or reducing cycle time, and it might use techniques such as Six Sigma and Lean. It also includesthe actions to accomplish your organization’s strategic objectives.

N4. Your organizational performance results should be reported in Items 7.1–7.6.N5. For nonprofit organizations that rely on volunteers to accomplish their work, responses to 1.1b(1) also

should discuss your efforts to communicate with and engage the volunteer workforce.

Item responses are assessed by considering the Criteria Item requirements; your key business factors presented in yourOrganizational Profile; and the maturity of your approaches, breadth of their deployment, and strength of your improvementprocess and results relative to the Scoring System. Refer to the Scoring System information on 64-68. For additionaldescription of this Item, see pages 50-51.

Process

Notes:


1.2 Governance and Social Responsibilities: How do you govern and addressyour social responsibilities (50 pts.)

Describe your organization’s GOVERNANCE system. Describe HOW your organization addresses its re-sponsibilities to the public, ensures ETHICAL BEHAVIOR, and practices good citizenship.

Within your response, include answers to the following questions:

a. Organizational GOVERNANCE

(1) HOW does your organization review and achieve the following KEY aspects of your GOVER-

NANCE system:• accountability for management’s actions• fiscal accountability• transparency in operations and selection of and disclosure policies for GOVERNANCE boardmembers, as appropriate• independence in internal and external audits• protection of STAKEHOLDER and stockholder interests, as appropriate

(2) HOW do you evaluate the PERFORMANCE of your SENIOR LEADERS, including the chief executive?HOW do you evaluate the PERFORMANCE of members of your GOVERNANCE board, as appropri-ate? HOW do SENIOR LEADERS and your GOVERNANCE board use these PERFORMANCE reviews tofurther develop and to improve both their personal leadership EFFECTIVENESS and that ofyour board and LEADERSHIP SYSTEM, as appropriate?

b. Legal and ETHICAL BEHAVIOR

(1) HOW do you address any adverse impacts on society of your products, services, andoperations? HOW do you anticipate public concerns with current and future products, ser-vices, and operations? HOW do you prepare for these concerns in a proactive manner,including using resource-sustaining PROCESSES, as appropriate? What are your KEY compli-ance PROCESSES, MEASURES, and GOALS for achieving and surpassing regulatory and legalrequirements, as appropriate? What are your KEY PROCESSES, MEASURES, and GOALS for ad-dressing risks associated with your products, services, and operations?

(2) HOW does your organization promote and ensure ETHICAL BEHAVIOR in all your interactions?What are your KEY PROCESSES and MEASURES or INDICATORS for enabling and monitoring ETHI-

CAL BEHAVIOR in your GOVERNANCE structure, throughout your organization, and in interac-tions with CUSTOMERS, PARTNERS, and other STAKEHOLDERS? HOW do you monitor and respondto breaches of ETHICAL BEHAVIOR?

c. Support of KEY Communities

HOW does your organization actively support and strengthen your KEY communities? HOW

do you identify KEY communities and determine areas of emphasis for organizationalinvolvement and support? What are your KEY communities? HOW do your SENIOR LEADERS, inconcert with your EMPLOYEES, contribute to improving these communities?

N1. Societal responsibilities in areas critical to your organization’s ongoing success also should be addressed in StrategyDevelopment (Item 2.1) and in Process Management (Category 6). Key results, such as results of regulatory and legalcompliance (including the results of mandated financial audits), environmental improvements through use of “green”technology or other means, or conservation activities, should be reported as Leadership Outcomes (Item 7.6).

Process


Notes:

N2. Transparency in operations of your governance board (1.2a[1]) should include your internal con-trols on governance processes. For some nonprofit organizations, an external advisory board mayprovide some or all of the governance board functions. For those nonprofit organizations that serveas stewards of public funds, stewardship of those funds and transparency in operations are areasof emphasis.

N3. Leadership performance evaluation (1.2a[2]) might be supported by peer reviews, formal perfor-mance management reviews (5.1b), and formal or informal workforce and other stakeholder feed-back and surveys. For some nonprofit and government organizations, external advisory boardsmight evaluate the performance of senior leaders and the governance board.

N4. Measures or indicators of ethical behavior (1.2b[2]) might include the percentage of independentboard members, measures of relationships with stockholder and nonstockholder constituencies,instances of ethical conduct breaches and responses, survey results on workforce perceptions oforganizational ethics, ethics hotline use, and results of ethics reviews and audits. They also mightinclude evidence that policies, workforce training, and monitoring systems are in place withrespect to conflicts of interest and proper use of funds.

N5. Areas of community support appropriate for inclusion in 1.2c might include your efforts to strengthenlocal community services, education, and health; the environment, including collaborative activi-ties to conserve the environment or natural resources; and practices of trade, business, or profes-sional associations.

N6. The health and safety of your workforce are not addressed in Item 1.2; you should address theseemployee factors in Item 5.2.

N7. Nonprofit organizations should report in 1.2b(1), as appropriate, how they address the legal andregulatory requirements and standards that govern fundraising and lobbying activities.

N8. For some charitable organizations, support for key communities (1.2c) may occur totally throughthe missionrelated activities of the organization. In such cases, it is appropriate to respond withany “extra efforts” you devote to support of these communities.

For additional description of this Item, see page 51.

Notes:


2 Strategic Planning (85 pts.)

The Strategic Planning Category examines HOW your organization develops STRATEGIC OBJECTIVES andACTION PLANS. Also examined are HOW your chosen STRATEGIC OBJECTIVES and ACTION PLANS are DEPLOYED andchanged if circumstances require, and HOW progress is measured.

2.1 Strategy Development: How do you develop your strategy? (40 pts.)

Describe HOW your organization determines its STRATEGIC CHALLENGES and advantages. Describe HOW

your organization establishes its strategy and STRATEGIC OBJECTIVES to address these CHALLENGES andenhance its advantages.Summarize your organization’s KEY STRATEGIC OBJECTIVES and their related GOALS.


a. STRATEGY DEVELOPMENT PROCESS

(1) HOW does your organization conduct its strategic planning? What are the KEY PROCESS

steps? Who are the KEY participants? HOW does your PROCESS identify potential blindspots? HOW do you determine your STRATEGIC CHALLENGES and advantages, as identified inresponse to P.2 in your Organizational Profile? What are your short- and longer-termplanning time horizons? HOW are these time horizons set? HOW does your strategicplanning PROCESS address these time horizons?

(2) HOW do you ensure that strategic planning addresses the KEY factors listed below? HOWdo you collect and analyze relevant data and information pertaining to these factors aspart of your strategic planning PROCESS:• your organization’s strengths, weaknesses, opportunities, and threats• early indications of major shifts in technology, markets, CUSTOMER preferences, compe-tition, or the regulatory environment• long-term organizational SUSTAINABILITY

• your ability to execute the strategic plann

b. STRATEGIC OBJECTIVES

(1) What are your KEY STRATEGIC OBJECTIVES and your timetable for accomplishing them? Whatare your most important GOALS for these STRATEGIC OBJECTIVES?

(2) HOW do your STRATEGIC OBJECTIVES address your STRATEGIC CHALLENGES and strategic advan-tages? HOW do your STRATEGIC OBJECTIVES address your opportunities for INNOVATION in prod-ucts and services, operations, and the business model? HOW do you ensure that yourSTRATEGIC OBJECTIVES balance short- and longer-term challenges and opportunities? HOW doyou ensure that your STRATEGIC OBJECTIVES balance the needs of all

N1. “Strategy development” refers to your organization’s approach (formal or informal) to preparing forthe future. Strategy development might utilize various types of forecasts, projections, options,scenarios, knowledge (see 4.2b for relevant organizational knowledge), or other approaches toenvisioning the future for purposes of decision making and resource allocation. Strategy develop-ment might involve participation by key suppliers, distributors, partners, and customers. For somenonprofit organizations, strategy development might involve participation by organizations provid-ing similar services or drawing from the same donor population or volunteer workforce.

Process

Notes:


N2. “Strategy” should be interpreted broadly. Strategy might be built around or lead to any or all of thefollowing: new products, services, and markets; revenue growth via various approaches, includingacquisitions, grants, and endowments; divestitures; new partnerships and alliances; and newemployee or volunteer relationships. Strategy might be directed toward becoming a preferredsupplier, a local supplier in each of your major customers’ or partners’ markets, a low-cost pro-ducer, a market innovator, or a high-end or customized product or service provider. It also might bedirected toward meeting a community or public need.

N3. Your organization’s strengths, weaknesses, opportunities, and threats (2.1a[2]) should addressall factors that are key to your organization’s future success, including the following, as appropri-ate: your customer and market needs, expectations, and opportunities; your opportunities forinnovation and role model performance; your core competencies; your competitive environmentand your performance relative to competitors and comparable organizations; your product lifecycle; technological and other key innovations or changes that might affect your products andservices and how you operate, as well as the rate of that innovation; your human and otherresource needs; your ability to capitalize on diversity; your opportunities to redirect resources tohigher-priority products, services, or areas; financial, societal, ethical, regulatory, technological,security, and other potential risks; your ability to prevent and respond to emergencies, includingnatural or other disasters; changes in the national or global economy; partner and supply chainneeds, strengths, and weaknesses; changes in your parent organization; and other factors uniqueto your organization.

N4. Your ability to execute the strategic plan (2.1a[2]) should address your ability to mobilize thenecessary resources and knowledge. It also should address your organizational agility based oncontingency plans or if circumstances require a shift in plans and rapid execution of new orchanged plans.

N5. Strategic objectives that address key challenges and advantages (2.1b[2]) might include rapidresponse, customization, co-location with major customers or partners, workforce capability andcapacity, specific joint ventures, virtual manufacturing, rapid innovation, ISO 9000:2000 or ISO14000 registration, Web-based supplier and customer relationship management, and product andservice quality enhancements. Responses to Item 2.1 should focus on your specific challengesand advantages—those most important to your ongoing success and to strengthening yourorganization’s overall performance.

N6. Item 2.1 addresses your overall organizational strategy, which might include changes in services,products, and product lines. However, the Item does not address product or service design; youshould address these factors in Item 6.1, as appropriate.


2.2 Strategy Deployment:How do you deploy your strategy? (45 pts.)

Describe HOW your organization converts its STRATEGIC OBJECTIVES into ACTION PLANS. Summarizeyour organization’s ACTION PLANS and related KEY PERFORMANCE MEASURES or INDICATORS. Project yourorganization’s future PERFORMANCE relative to KEY comparisons on these PERFORMANCE MEASURES orINDICATORS.


a. ACTION PLAN Development and DEPLOYMENT

(1) HOW do you develop and DEPLOY ACTION PLANS throughout the organization to achieve your KEYSTRATEGIC OBJECTIVES? HOW do you ensure that the KEY outcomes of your ACTION PLANS can besustained?

(2) HOW do you ensure that adequate financial and other resources are available to support theaccomplishment of your ACTION PLANS? HOW do you allocate these resources to support theaccomplishment of the plans? HOW do you assess the financial and other risks associatedwith the plans? HOW do you balance resources to ensure adequate resources to meet currentobligations?

(3) HOW do you establish and DEPLOY modified ACTION PLANS if circumstances require a shift inplans and rapid execution of new plans?

Process


(4) What are your KEY short- and longer-term ACTION PLANS? What are the KEY planned changes,if any, in your products and services, your CUSTOMERS and markets, and how you will oper-ate?

(5) What are your KEY human resource plans to accomplish your short- and longer-term STRATE-GIC OBJECTIVES and ACTION PLANS? HOW do the plans address potential impacts onpeople in your WORKFORCE and any potential changes to WORKFORCE CAPABILITY andCAPACITY needs?

(6) What are your KEY PERFORMANCE MEASURES or INDICATORS for tracking progress on yourACTION PLANS? HOW do you ensure that your overall ACTION PLAN measurement systemreinforces organizational ALIGNMENT? HOW do you ensure that the measurement systemcovers all KEY DEPLOYMENT areas and STAKEHOLDERS?

b. PERFORMANCE PROJECTION

For the KEY PERFORMANCE MEASURES or INDICATORS identified in 2.2a(6), what are your PERFOR-MANCE PROJECTIONS for both your short- and longer-term planning time horizons? HOW are thesePROJECTIONS determined? How does your projected PERFORMANCE compare with the projectedPERFORMANCE of your competitors or comparable organizations? How does it compare with KEYBENCHMARKS, GOALS, and past PERFORMANCE, as appropriate? HOW do you ensure progress sothat you will meet your PROJECTIONS? If there are current or projected gaps in PERFORMANCEagainst your competitors or comparable organizations, HOW will you address them?

N1. Strategy and action plan development and deployment are closely linked to other Items in theCriteria. The following are examples of key linkages:• Item 1.1 for how your senior leaders set and communicate organizational direction;• Category 3 for gathering customer and market knowledge as input to your strategy and actionplans and for deploying action plans;• Category 4 for measurement, analysis, and knowledge management to support your key infor-mation needs, to support your development of strategy, to provide an effective basis for yourperformance measurements, and to track progress relative to your strategic objectives and actionplans;• Category 5 for meeting your workforce capabilityand capacity needs, for workforce developmentand learning system design and needs, and for implementing workforce-related changes resultingfrom action plans;• Category 6 for changes to work systems and work process requirements resulting from youraction plans; and• Item 7.6 for specific accomplishments relative to your organizational strategy and action plans.

N2. Deployment of action plans (2.2a[1]) might includekey partners, collaborators, and suppliers.N3. Measures and indicators of projected performance(2.2b) might include changes resulting from

new ventures; organizational acquisitions or mergers; new value creation; market entry and shifts;new legislative mandates, legal requirements, or industry standards; and significant anticipatedinnovations in products, services, and technology.


Notes:


3 Customer and Public Focus (85 pts.)

The CUSTOMER and Public Focus Category examines HOW your organization determines the requirements,needs, expectations, and preferences of CUSTOMERS and public. Also examined is HOW your organizationbuilds relationships with CUSTOMERS and determines the KEY factors that lead to CUSTOMER acquisition,satisfaction, loyalty, and retention and to business expansion and SUSTAINABILITY.

3.1 Customer and Public Knowledge: How do you use customer and publicknowledge? (40 pts.)

Describe HOW your organization determines requirements, needs, expectations, and prefer-ences of CUSTOMERS and markets to ensure the continuing relevance of your products andservices and to develop new business opportunities.


a. CUSTOMER AND MARKET KNOWLEDGE

(1) HOW do you identify CUSTOMERS, CUSTOMER groups, and market SEGMENTS? HOW doyou determine which CUSTOMERS, CUSTOMER groups, and market SEGMENTS to pursuefor current and future products and services? HOW do you include CUSTOMERS of competi-tors and other potential CUSTOMERS and markets in this determination?

(2) HOW do you use the voice of the CUSTOMER to determine KEY CUSTOMER requirements,needs, and changing expectations (including product and service features) and their relativeimportance to CUSTOMERS’ purchasing or relationship decisions? How do your listeningmethods vary for different CUSTOMERS, CUSTOMER groups, or market SEGMENTS? HOW doyou use relevant information and feedback from current and former CUSTOMERS, includingmarketing and sales information, CUSTOMER loyalty and retention data, CUSTOMER refer-rals, win/loss ANALYSIS, and complaint data for PURPOSES of planning products and ser-vices, marketing, making WORK SYSTEM and work PROCESS improvements, and developingnew business opportunities?

(3) HOW do you use voice-of-the-CUSTOMER information and feedback to become more CUS-TOMER-focused, to better satisfy CUSTOMER needs and desires, and to identify opportunitiesfor INNOVATION?

(4) HOW do you keep your CUSTOMER and market listening and LEARNING methods current withbusiness needs and directions, including changes in your marketplace?

N1. Your responses to this Item should include the customer groups and market segments identifiedin P.1b(2).

N2. If your products and services are sold or delivered to end-use customers via other businesses ororganizations (e.g., those that are part of your “value chain,” such as retail stores, dealers, or localdistributors), customer groups (3.1a[1]) should include both the end users and these intermediateorganizations.

N3. The “voice of the customer” (3.1a[2]) is your process for capturing customer-related information.Voice-of-the-customer processes are intended to be proactive and continuously innovative to cap-ture stated, unstated, and anticipated customer requirements, needs, and desires. The goal is toachieve customer loyalty and build customer relationships, as appropriate. The voice of the cus-tomer might include gathering and integrating survey data, focus group findings, Web-based data,warranty data, complaint logs and field reports, and other data and information that affect custom-ers’ purchasing and relationship decisions.

Process

Notes:


N4. “Product and service features” (3.1a[2]) refers to all the important characteristics of products and services and totheir performance throughout their full life cycle and the full “consumption chain.” This includes all customers’purchasing and interaction experiences with your organization that influence purchasing and relationship decisions.The focus should be on features that affect customer preference and loyalty —for example, those features thatdifferentiate your products and services from competing offerings or other organizations’ services. Those featuresmight include price, reliability, value, delivery, timeliness, ease of use, requirements for hazardous materials use anddisposal, customer or technical support, and the sales relationship. Key product and service features and purchasingand relationship decisions (3.1a[2]) might take into account how transactions occur and factors such as confidenti-ality and security. Your results on performance relative to key product and service features should be reported in Item7.1, and those concerning customer perceptions and actions (outcomes) should be reported in Item 7.2.

N5. For additional considerations on products, services, customers, and the business of nonprofit organizations, seeItem P.1, Notes 6 and 7, and Item P.2, Note 5.


3.2 Customer Relationships and Satisfaction: How do you build relationshipsand grow customer satisfaction and public trust? (45 pts.)

Describe HOW your organization builds relationships to acquire, satisfy, and retain CUSTOMERSand to increase CUSTOMER loyalty. Describe also HOW your organization determines CUSTOMERsatisfaction and dissatisfaction.


a. CUSTOMER RELATIONSHIP BUILDING

(1) HOW do you build relationships to acquire CUSTOMERS, to meet and exceed theirexpectations, to increase loyalty and repeat business, and to gain positive referrals?

(2) HOW do your KEY access mechanisms enable CUSTOMERS to seek information, conductbusiness, and make complaints? What are your KEY access mechanisms? HOW doyou determine KEY CUSTOMER contact requirements for each mode of CUSTOMER access?HOW do you ensure that these contact requirements are DEPLOYED to all people andPROCESSES involved in the CUSTOMER response chain?

(3) HOW do you manage CUSTOMER complaints? HOW do you ensure that complaints areresolved EFFECTIVELY and promptly? HOW do you minimize CUSTOMER dissatisfaction and,as appropriate, loss of repeat business and referrals? HOW are complaints aggregatedand analyzed for use in improvement throughout your organization and by your PARTNERS?

(4) HOW do you keep your APPROACHES to building relationships and providing CUSTOMER accesscurrent with business needs and directions?

b. CUSTOMER SATISFACTION DETERMINATION

(1) HOW do you determine CUSTOMER satisfaction, dissatisfaction, and loyalty? How do thesedetermination methods differ among CUSTOMER groups? HOW do you ensure that yourmeasurements capture actionable information for use in exceeding your CUSTOMERS’ expec-tations? HOW do you ensure that your measurements capture actionable information for use insecuring your CUSTOMERS’ future business and gaining positive referrals, as appropriate?HOW do you use CUSTOMER satisfaction and dissatisfaction information for improvement?

(2) HOW do you follow up with CUSTOMERS on the quality of products, services, and transactionsto receive prompt and actionable feedback?

(3) HOW do you obtain and use information on your CUSTOMERS’ satisfaction relative to theirsatisfaction with your competitors? HOW do you obtain and use information on your CUSTOM-ERS’ satisfaction relative to the CUSTOMER satisfaction LEVELS of other organizations provid-ing similar products or services, and/or industry BENCHMARKS?

(4) HOW do you keep your APPROACHES to determining satisfaction current with business needsand directions?

Process


N1. Customer relationship building (3.2a) might include the development of partnerships or allianceswith customers.

N2. Determining customer satisfaction and dissatisfaction (3.2b) might include the use of any or all ofthe following: surveys, formal and informal feedback, customer account histories, complaints, win/loss analysis, and transaction completion rates. Information might be gathered on the Web, throughpersonal contact or a third party, or by mail.

N3. Customer satisfaction and dissatisfaction measurements (3.2b[1]) might include both a numericalrating scaleand descriptors for each unit in the scale. Actionable customer satisfaction measure-ments provide useful information about specific product and service features, delivery, relation-ships, and transactions that affect customers’ future actions—repeat business and positive refer-rals.

N4. Other organizations providing similar products or services (3.2b[3]) might include other organiza-tions with whom you don’t compete but provide similar products and services in other geographicareas or to different populations of people.

N5. Your customer satisfaction and dissatisfaction results should be reported in Item 7.2.

N6. For some nonprofit organizations (e.g., some government agencies or charitable organizations),customers may be assigned or may be required to use your organization, and relationships maybe short-term. For those organizations, relationship building (3.2a[1]) might be focused on meet-ing and exceeding expectations during the short-term relationship, resulting in positive commentsto other people, including key stakeholders of your organization.


Notes:


4 Measurement, Analysis, and Knowledge Management (90 pts.)

The Describe HOW your organization measures, analyzes, aligns, reviews, and improves its PERFORMANCEthrough the use of data and information at all levels and in all parts of your organization. Describe HOW youSYSTEMATICALLY use the results of reviews to evaluate and improve PROCESSES.

4.1 Measurement, Analysis, and Review of Organizational Performance: How do youmeasure, analyze, and then improve organizational performance? (45 pts.)

Describe HOW your organization measures, analyzes, aligns, and improves its PERFORMANCEdata and information at all LEVELS and in all parts of your organization.


a. PERFORMANCE MEASUREMENT

(1) HOW do you select, collect, align, and integrate data and information for tracking daily opera-tions and for tracking overall organizational PERFORMANCE, including progress relative toSTRATEGIC OBJECTIVES and ACTION PLANS? What are your KEY organizational PERFOR-MANCE MEASURES, including KEY short-term and longerterm financial MEASURES? HOW doyou use these data and information to support organizational decision making and INNOVA-TION?

(2) HOW do you select and ensure the EFFECTIVE use of KEY comparative data and informationto support operational and strategic decision making and INNOVATION?

(3) HOW do you keep your PERFORMANCE measurement system current with business needsand directions? HOW do you ensure that your PERFORMANCE measurement system is sen-sitive to rapid or unexpected organizational or external changes?

b. PERFORMANCE ANALYSIS AND REVIEW

(1) HOW do you review organizational PERFORMANCE and capabilities? What ANALYSES do youperform to support these reviews and to ensure that conclusions are valid? HOW do you usethese reviews to assess organizational success, competitive PERFORMANCE, and progressrelative to STRATEGIC OBJECTIVES and ACTION PLANS? HOW do you use these reviews toassess your organization’s ability to respond rapidly to changing organizational needs andchallenges in your operating environment?

(2) HOW do you translate organizational PERFORMANCE review findings into priorities for con-tinuous and breakthrough improvement and into opportunities for INNOVATION? HOW arethese priorities and opportunities DEPLOYED to work group and functional-level operationsthroughout your organization to enable EFFECTIVE support for their decision making? Whenappropriate, HOW are the priorities and opportunities DEPLOYED to your suppliers, PART-NERS, and COLLABORATORS to ensure organizational ALIGNMENT?

(3) HOW do you incorporate the results of organizational PERFORMANCE reviews into the SYS-TEMATIC evaluation and improvement of key processes?

N1. Performance measurement (4.1a) is used in factbased decision making for setting and aligningorganizational directions and resource use at the work unit, key process, departmental, and wholeorganization levels.

N2. Comparative data and information (4.1a[2]) are obtained by benchmarking and by seeking com-petitive comparisons. “Benchmarking” refers to identifying processes and results that representbest practices and performance for similar activities, inside or outside your organization’s indus-try. Competitive comparisons relate your organization’s performance to that of competitors andother organizations providing similar products and services.

Process


Notes:

N3. Organizational performance reviews (4.1b[1]) should be informed by organizational performance mea-surement, performance measures reported throughout your Criteria Item responses, and performancemeasures reviewed by senior leaders (1.1b[2]), and they should be guided by the strategic objectivesand action plans described in Items 2.1 and 2.2. The reviews also might be informed by internal orexternal Baldrige assessments.

N4. N4. Analysis (4.1b[1]) includes examining trends; organizational, industry, and technology projections;and comparisons, cause-effect relationships, and correlations. Analysis should support your perfor-mance reviews, help determine root causes, and help set priorities for resource use. Accordingly,analysis draws on all types of data: customer-related, financial and market, operational, and competi-tive.

N5. The results of organizational performance analysis and review should contribute to your organizationalstrategic planning in Category 2.

N6. Your organizational performance results should be reported in Items 7.1–7.6.

For additional description of this Item, see pages 55-56.

4.2 Management of Information, Information Technology, and Knowledge:How do you manage your information, information technology, andorganizational information and knowledge? (45 pts.)

Describe HOW your organization ensures the quality and availability of needed data, infor-mation, software, and hardware for your WORKFORCE, suppliers, PARTNERS, COLLABORA-TORS, and CUSTOMERS. Describe HOW your organization builds and manages its KNOWL-EDGE ASSETS.


a. MANAGEMENT OF INFORMATON RESOURCES

(1) HOW do you make needed data and information available? HOW do you make themaccessible to your WORKFORCE, suppliers, PARTNERS, COLLABORATORS, andCUSTOMERS, as appropriate?

(2) HOW do you ensure that hardware and software are reliable, secure, and user-friendly?(3) In the event of an emergency, HOW do you ensure the continued availability of hardware

and software systems and the continued availability of data and information?(4) HOW do you keep your data and information availability mechanisms, including your

software and hardware systems, current with business needs and directions and withtechnological changes in your operating environment?

b. DATA, INFORMATION, AND KNOWLEDGE MANAGEMENT

(1) HOW do you ensure the following properties of your organizational data, information, andknowledge:• accuracy• integrity and reliability• timeliness• security and confidentiality

(2) HOW do you manage organizational knowledge to accomplish the following:• the collection and transfer of WORKFORCE knowledge• the transfer of relevant knowledge from and to CUSTOMERS, suppliers, PARTNERS,and COLLABORATORS• the rapid identification, sharing, and implementation of best practices• the assembly and transfer of relevant knowledge for use in your strategic planningPROCESS

Process


N1. Data and information access (4.2a[1]) might be via electronic or other means.


Notes:


5 Workforce Focus (85 pts)

The Workforce Focus Category examines HOW your organization engages, manages, and develops yourWORKFORCE to utilize its full potential in ALIGNMENT with your organization’s overall MISSION, strategy,and ACTION PLANS. The Category examines your ability to assess WORKFORCE CAPABILITY andCAPACITY needs and to build a WORKFORCE environment conducive to HIGH PERFORMANCE.

5. 1 Workforce Engagement: How do you engage your workforce to achieveorganizational and personal success (45 pts.)

Describe HOW your organization engages, compensates, and rewards your EMPLOYEE to achieveHIGH PERFORMANCE. Describe HOW your EMPLOYEES, including leaders, are developed to achieveHIGH PERFORMANCE. Describe HOW you assess WORKFORCE ENGAGEMENT and use the results to achievehigher PERFORMANCE.


a. Workforce Enrichment

(1) HOW do you determine the KEY factors that affect WORKFORCE ENGAGEMENT? HOW do youdetermine the KEY factors that affect EMPLOYEE satisfaction? HOW are these factors deter-mined for different EMPLOYEE groups and SEGMENTS?

(2) HOW do you foster an organizational culture conducive to HIGH PERFORMANCE and a moti-vated WORKFORCE to accomplish the following:• cooperation, EFFECTIVE communication, and skill sharing within and across work units,operating units, and locations, as appropriate• EFFECTIVE information flow and two-way communication with supervisors and managers• individual goal setting, EMPOWERMENT, and initiative• INNOVATION in the work environment• the ability to benefit from the diverse ideas, cultures, and thinking of your EMPLOYEE

(3) HOW does your EMPLOYEE PERFORMANCE management system support HIGH-PERFORMANCE WORKand WORKFORCE ENGAGEMENT? HOW does your EMPLOYEE PERFORMANCE management systemconsider EMPLOYEE compensation, reward, recognition, and incentive practices? HOW doesyour EMPLOYEE PERFORMANCE management system reinforce a CUSTOMER and business fo-cus and achievement of your ACTION PLANS?

b. Workforce and Leader Development

(1) HOW does your EMPLOYEE development and LEARNING system address the following:• needs and desires for LEARNING and development identified by your EMPLOYEE, includingsupervisors and managers• your CORE COMPETENCIES, STRATEGIC CHALLENGES, and accomplishment of your ACTION PLANS,both short-term and long-term• organizational PERFORMANCE improvement, technological change, and INNOVATION• the breadth of development opportunities, including education, training, coaching, mentoring,and work-related experiences, as appropriate• the transfer of knowledge from departing or retiring workers• the reinforcement of new knowledge and skills on the job

Process


(2) HOW does your development and LEARNING system for leaders address the following:• development of personal leadership attributes• development of organizational knowledge• ethical business practices• your CORE COMPETENCIES, STRATEGIC CHALLENGES, and accomplishment of your ACTIONPLANS, both short-term and long-term• organizational PERFORMANCE improvement, change, and INNOVATION• the breadth of leadership development opportunities, including education, training, coach-ing, mentoring, and work-related experiences, as appropriate

(3) HOW do you evaluate the EFFECTIVENESS of your EMPLOYEES and leader developmentand LEARNING systems?

(4) HOW do you manage EFFECTIVE career progression for your entire WORKFORCE? HOWdo you accomplish EFFECTIVE succession planning for management and leadershippositions?

c. Assessment of WORKFORCE ENGAGEMENT

(1) HOW do you assess WORKFORCE ENGAGEMENT? What formal and informal assessmentmethods and MEASURES do you use to determine EMPLOYEE ENGAGEMENT and satisfaction?How do these methods and MEASURES differ across EMPLOYEE groups and SEGMENTS? HOWdo you use other INDICATORS, such as EMPLOYEE retention, absenteeism, grievances, safety,and PRODUCTIVITY to assess and improve EMPLOYEE ENGAGEMENT?

(2) HOW do you relate assessment findings to KEY business RESULTS reported in Category 7to identify opportunities for improvement in both WORKFORCE ENGAGEMENT and businessRESULTS?

N1. “Workforce” refers to the people actively involved in accomplishing the work of your organization. It includes yourorganization’s permanent, temporary, and part-time personnel, as well as any contract employees supervised byyour organization. It includes team leaders, supervisors, and managers at all levels. People supervised by a contrac-tor should be addressed in Category 6 as part of your larger work systems. For nonprofit organizations that also relyon volunteers,“workforce” includes these volunteers.

N2. “Workforce engagement” refers to the extent of workforce commitment, both emotional and intellectual, to accom-plishing the work, mission, and vision of the organization. Organizations with high levels of workforce engagementare often characterized by high-performing work environments in which people are motivated to do their utmost forthe benefit of their customers and for the success of the organization.

N3. Compensation, recognition, and related reward and incentive practices (5.1a[3]) include promotions and bonuses thatmight be based on performance, skills acquired, and other factors. In some government organizations, compensationsystems are set by law or regulation. However, since recognition can include monetary and nonmonetary, formal andinformal, and individual and group mechanisms, reward and recognition systems do permit flexibility.

N4. Your organization may have unique considerations relative to workforce development, learning, and career progres-sion. If this is the case, your response to 5.1b should include how you address these considerations.

N5. Identifying improvement opportunities (5.1c[2]) might draw on your workforce-focused results presented in Item 7.4and might involve addressing workforce-related problems based on their impact on your business results reported inresponse to other Category 7 Items.


5.2 Workforce Environment: How do you build an effective and supportiveworkforce environment? (40 pts.)

Describe HOW your organization manages EMPLOYEE CAPABILITY and CAPACITY to accomplish thework of the organization. Describe HOW your organization maintains a safe, secure, andsupportive work climate.

Notes:


Process


a. WORKFORCE CAPABILITY AND CAPACITY

(1) HOW do you assess your EMPLOYEE CAPABILITY and CAPACITY needs, including skills,competencies, and staffing levels?

(2) HOW do you recruit, hire, place, and retain new employees? HOW do you en-sure that your EMPLOYEE represents the diverse ideas, cultures, and thinking ofyour hiring community?

(3) HOW do you manage and organize your EMPLOYEES to accomplish the work ofyour organization, capitalize on the organization’s CORE COMPETENCIES, reinforce aCUSTOMER and business focus, exceed PERFORMANCE expectations, address yourSTRATEGIC CHALLENGES and ACTION PLANS, and achieve the agility to address changingbusiness needs?

(4) HOW do you prepare your EMPLOYEES for changing CAPABILITY and CAPACITY needs?HOW do you manage your WORKFORCE, its needs, and your needs to ensure con-tinuity, to prevent WORKFORCE reductions, and to minimize the impact of WORKFORCE

reductions, if they do become necessary?

b. WORKFORCE CLIMATE

(1) HOW do you ensure and improve workplace health, safety, and security? Whatare your PERFORMANCE MEASURES and improvement GOALS for each of these work-place factors? What are any significant differences in these factors and PERFOR-

MANCE MEASURES or targets for different workplace environments?

(2) HOW do you support your EMPLOYEES via policies, services, and benefits? HOWare these tailored to the needs of a diverse WORKFORCE and different EMPLOYEE groupsand SEGMENTS?


Notes:


N1. “Workforce capability” refers to your organization’s ability to accomplish its work pro-cesses through the knowledge, skills, abilities, and competencies of its people. Capa-bility may include the ability to build and sustain relationships with your customers; toinnovate and transition to new technologies; to develop new products, services, andwork processes; and to meet changing business, market, and regulatory demands.“Workforce capacity” refers to your organization’s ability to ensure sufficient staffinglevels to accomplish its work processes and successfully deliver your products andservices to your customers, including the ability to meet seasonal or varying demandlevels.

N2. Workforce capability and capacity should consider not only current needs but also fu-ture requirements based on your strategic objectives and action plans reported in Cat-egory 2.

N3. Preparing your workforce for changing capability and capacity needs (5.2a[4]) mightinclude training, education, frequent communication, considerations of workforce em-ployment and employability, career counseling, and outplacement and other services.


6 Process Management (85 pts.)

The PROCESS Management Category examines HOW your organization determines its CORECOMPETENCIES and WORK SYSTEMS and HOW it designs, manages, and improves its KEY PROCESSES forimplementing those WORK SYSTEMS to deliver CUSTOMER VALUE and achieve organizational success

and SUSTAINABILITY. Also examined is your readiness for emergencies.

6.1 Work Systems Design: How do you design your work systems? (35 pts.)

Describe HOW your organization determines its CORE COMPETENCIES and designs its WORK SYSTEMSand KEY PROCESSES to deliver CUSTOMER VALUE, prepare for potential emergencies, and achieveorganizational success and SUSTAINABILITY.


a. CORE COMPETENCIES

(1) HOW does your organization determine its CORE COMPETENCIES? What are your organization’sCORE COMPETENCIES and how do they relate to your MISSION, competitive environment, andACTION PLANS?

(2) HOW do you design and innovate your overall WORK SYSTEMS? HOW do you decide whichPROCESSES within your overall WORK SYSTEMS will be internal to your organization (your KEY

work PROCESSES) and which will use external resources?

b. WORK PROCESS DESIGN

(1) What are your organization’s KEY work PROCESSES? How do these KEY work PROCESSES

relate to your CORE COMPETENCIES? How do these PROCESSES contribute to deliveringCUSTOMER VALUE, profitability, organizational success, and SUSTAINABILITY?

(2) HOW do you determine KEY work PROCESS requirements, incorporating input fromCUSTOMERS, suppliers, PARTNERS, and COLLABORATORS, as appropriate? Whatare the KEY requirements for these PROCESSES?

(3) HOW do you design and innovate your work PROCESSES to meet all the KEYrequirements? HOW do you incorporate new technology, organizational knowledge, andthe potential need for agility into the design of these PROCESSES? HOW do you incorporateCYCLE TIME, PRODUCTIVITY, cost control, and other efficiency and EFFECTIVENESSfactors into the design of these PROCESSES?

c. EMERGENCY READINESS

HOW do you ensure WORK SYSTEM and workplace preparedness for disasters or emergencies?HOW does your disaster and emergency preparedness system consider prevention, mangement,continuity of operations, and recovery?


Process

N1. “Core competencies” (6.1a) refers to your organization’s areas of greatest expertise. Your organization’score competencies are those strategically important capabilities that provide an advantage in yourmarketplace or service environment. Core competencies frequently are challenging for competitors orsuppliers and partners to imitate and provide a sustainable competitive advantage.

N2. “Work systems” refers to how the work of your organization is accomplished. Work systems involve yourworkforce, your key suppliers and partners, your contractors, your collaborators, and other componentsof the supply chain needed to produce and deliver your products, services, and business and supportprocesses. Your work systems coordinate the internal work processes and the external resourcesnecessary for you to develop, produce, and deliver your products and services to your customers and tosucceed in your marketplace.

N3. Your key work processes (6.1b[1]) are the processes that involve the majority of your organization’sworkforce and produce customer, stakeholder, and stockholder value. Your key work processes are yourmost important product and service design and delivery, business, and support processes.

N4. Disasters and emergencies (6.1c) might be weather-related, utility-related, security-related, or due to alocal or national emergency, including potential pandemics such as an avian flu outbreak. Emergencyconsiderations related to information technology should be addressed in Item 4.2.


6.2 Work Process Management and Improvement: How do you manage andimprove your key organizational work processes? (50 pts.)

Describe HOW your organization implements, manages, and improves its KEY workPROCESSES to deliver CUSTOMER VALUE and achieve organizational success andSUSTAINABILITY.


A. WORK PROCESS MANAGEMENT

(1) HOW do you implement your work PROCESSES to ensure that they meet designrequirements? HOW does your subsequent day-to-day operation of these PROCESSESensure that they meet KEY PROCESS requirements? HOW is CUSTOMER, supplier,PARTNER, and COLLABORATOR input used in managing these PROCESSES, asappropriate? What are your KEY PERFORMANCE MEASURES or INDICATORS and in-process MEASURES used for the control and improvement of your work PROCESSES?

(2) HOW do you minimize overall costs associated with inspections, tests, and PROCESSor PERFORMANCE audits, as appropriate? HOW do you prevent defects, service errors,and rework and minimize warranty costs or CUSTOMERS’ PRODUCTIVITY losses, asappropriate?

B. WORK PROCESS IMPROVEMENT

HOW do you improve your work PROCESSES to achieve better PERFORMANCE, to reducevariability, to improve products and services, and to keep the PROCESSES current with businessneeds and directions? HOW are improvements and lessons learned shared with other organiza-tional units and PROCESSES to drive organizational LEARNING and INNOVATION?

Process

Notes:



N1. To improve process performance (6.2b) and reduce variability, you might implement approachessuch as a Lean Enterprise System, Six Sigma methodology, use of ISO 9000:2000 standards, thePlan-Do-Check-Act methodology, or other process improvement tools.

N2. The results of improvements in product and service performance should be reported in Item 7.1. Allother work process performance results should be reported in Item 7.5.


Notes:


7 Results (450 pts.)

The Results Category examines your organization’s PERFORMANCE and improvement in all KEY areas—product and service outcomes, CUSTOMER-focused outcomes, financial and market OUTCOMES,WORKFORCE-focused outcomes, PROCESS-EFFECTIVENESS outcomes, and leadership outcomes.PERFORMANCE LEVELS are examined relative to those of competitors and other organizations providingsimilar products and services.

7.1 Product and Service Outcomes : What are your product and serviceperformance results? (100 pts.)

Summarize your organization’s KEY product and service PERFORMANCE RESULTS. SEG-MENT your RESULTS by product and service types and groups, CUSTOMER groups, and mar-ket SEGMENTS, as appropriate. Include appropriate comparative data.

Provide data and information to answer the following questions:

a. PRODUCT AND SERVICE RESULTS

What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS of product andservice PERFORMANCE that are important to your CUSTOMERS? How do these RESULTS comparewith the PERFORMANCE of your competitors and other organizations providing similar products andservices?

N1. Product and service results reported in this Item should relate to the key product, program, and servicefeatures identified as customer requirements or expectations in P.1b(2), based on information gatheredin Items 3.1 and 3.2. The measures or indicators should address factors that affect customer prefer-ence, such as those included in Item P.1, Note 4, and Item 3.1, Note 4.

N2. For some nonprofit organizations, product or service performance measures might be mandated byyour funding sources. These measures should be identified and reported in your response to this Item.

For additional description of this item, see page 61.

7.2 Customer-Focused Outcomes: What are your customer-focusedperformance results? (70 pts.)

Summarize your organization’s KEY CUSTOMER-focused RESULTS for CUSTOMER satisfac-tion and CUSTOMER-perceived VALUE, including CUSTOMER loyalty. SEGMENT your RE-SULTS by product and service types and groups, CUSTOMER groups, and market SEGMENTS,as appropriate. Include appropriate comparative data.


a. CUSTOMER-FOCUSED RESULTS

(1) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS ofCUSTOMER satisfaction and dissatisfaction? How do these RESULTS compare with theCUSTOMER satisfaction LEVELS of your competitors and other organizations providingsimilar products and services?

(2) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS ofCUSTOMER-perceived VALUE, including CUSTOMER loyalty and retention, positive re-ferral, and other aspects of building relationships with CUSTOMERS, as appropriate?

Results

Notes:

Results

N1. N1. Customer satisfaction and dissatisfaction results reported in this Item should relate to the customergroups and market segments discussed in P.1b(2) and Item 3.1 and to the determination methods anddata described in Item 3.2.

N2. Measures and indicators of customers’ satisfaction with your products and services relative to custom-ers’ satisfaction with competitors and comparable organizations (7.2a[1]) might include informationand data from your customers and from independent organizations.


7.3 Financial and Market Outcomes: What are your financial and marketplaceperformance results? (70 pts.)

Summarize your organization’s KEY financial and marketplace PERFORMANCE RESULTS byCUSTOMER or market SEGMENTS, as appropriate. Include appropriate comparative data.


a. FINANCIAL AND MARKET RESULTS

(1) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS offinancial PERFORMANCE, including aggregate MEASURES of financial return, financialviability, or budgetary PERFORMANCE, as appropriate?

(2) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS ofmarketplace PERFORMANCE, including market share or position, market and marketshare growth, and new markets entered, as appropriate?

N1. N1. Responses to 7.3a(1) might include aggregate measures of financial return, such as return oninvestment (ROI), operating margins, profitability, or profitability by market or customer segment. Re-sponses also might include measures of financial viability, such as liquidity, debt-to-equity ratio, dayscash on hand, asset utilization, and cash flow. Measures should relate to the financial measuresreported in 4.1a(1) and the financial management approaches described in Item 2.2. For nonprofitorganizations, additional measures might include performance to budget, reserve funds, cost avoid-ance or savings, administrative expenditures as a percentage of budget, and the cost of fundraisingversus funds raised.

N2. For nonprofit organizations, responses to 7.3a(2) might include measures of charitable donations orgrants and the number of new programs or services offered.


Results

Notes:

Notes:


7.4 Workforce-Focused Outcomes: What are your workforce-focusedresults? (70 pts.)

Summarize your organization’s KEY WORKFORCE-focused RESULTS for WORKFORCE EN-GAGEMENT and for your WORKFORCE environment. SEGMENT your RESULTS to address theDIVERSITY of your WORKFORCE and to address your WORKFORCE groups and SEGMENTS,as appropriate. Include appropriate comparative data.


a. WORKFORCE RESULTS

(1) (1) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS ofWORKFORCE ENGAGEMENT, WORKFORCE satisfaction, and the development of yourWORKFORCE, including leaders?

(2) What are your current LEVELS and TRENDS in KEY MEASURES of WORKFORCECAPABILITY and CAPACITY, including staffing levels, retention, and appropriate skills?

(3) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS ofyour WORKFORCE climate, including workplace health, safety, and security andWORKFORCE services and benefits, as appropriate?

N1. Results reported in this Item should relate to processes described in Category 5. Your results should beresponsive to key work process needs described in Category 6 and to your organization’s action plansand human resource plans described in Item 2.2.

N2. Responses to 7.4a(1) should include measures and indicators identified in response to 5.1c(1).N3. Nonprofit organizations that rely on volunteers should include results for their volunteer workforce, as

appropriate.


7.5 Process Effectiveness Outcomes : What are your process effectivenessresults? (70 pts.)

Summarize your organization’s KEY operational PERFORMANCE RESULTS that contribute tothe improvement of organizational EFFECTIVENESS, including your organization’s readi-ness for emergencies. SEGMENT your RESULTS by product and service types and groups, byPROCESSES and location, and by market SEGMENTS, as appropriate. Include appropriatecomparative data.


a. PROCESS EFFECTIVENESS RESULTS

(1) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS of theoperational PERFORMANCE of your WORK SYSTEMS, including WORK SYSTEM andworkplace preparedness for disasters or emergencies?

(2) What are your current LEVELS and TRENDS in KEY MEASURES or INDICATORS of theoperational PERFORMANCE of your KEY work PROCESSES, including PRODUCTIV-ITY, CYCLE TIME, and other appropriate MEASURES of PROCESS EFFECTIVENESS,efficiency, and INNOVATION?

Results

Notes:

Results


N1. N1. Results reported in Item 7.5 should address your key operational requirements as presented in theOrganizational Profile and in Items 6.1 and 6.2. Include results not reported in Items 7.1–7.4.

N2. Results reported in Item 7.5 should provide key information for analysis and review of your organiza-tional performance (Item 4.1) and should provide the operational basis for product and service out-comes (Item 7.1), customer-focused outcomes (Item 7.2), and financial and market outcomes (Item7.3).

N3. Appropriate measures and indicators of work system performance (7.5a[1]) might include audit, just-in-time delivery, and acceptance results for externally provided products, services, and processes; sup-plier and partner performance; product, service, and work system innovation rates and results; simpli-fication of internal jobs and job classifications; work layout improvements; changing supervisory ratios;response times for emergency drills or exercises; and results for work relocation or contingency exer-cises.


7.6 Leadership Outcomes : What are your leadership results? (70 pts.)

Summarize your organization’s KEY GOVERNANCE and SENIOR LEADERSHIP RESULTS,including evidence of strategic plan accomplishments, ETHICAL BEHAVIOR, fiscal ac-countability, legal compliance, social responsibility, and organizational citizenship. SEG-MENT your RESULTS by organizational units, as appropriate. Include appropriate com-parative data.


a. LEADERSHIP AND SOCIAL RESPONSIBILTIY RESULTS

(1) What are your RESULTS for KEY MEASURES or INDICATORS of accomplishment ofyour organizational strategy and ACTION PLANS?

(2) What are your RESULTS for KEY MEASURES or INDICATORS of ETHICAL BEHAVIORand of STAKEHOLDER trust in the SENIOR LEADERS and GOVERNANCE of yourorganization? What are your RESULTS for KEY MEASURES or INDICATORS of breachesof ETHICAL BEHAVIOR?

(3) What are your KEY current findings and TRENDS in KEY MEASURES or INDICATORSof fiscal accountability, both internal and external, as appropriate?

(4) What are your RESULTS for KEY MEASURES or INDICATORS of regulatory and legalcompliance?

(5) What are your RESULTS for KEY MEASURES or INDICATORS of organizational citizen-ship in support of your KEY communities?

Notes:

Results


PHILIPPINE QUALITY AWARD40

N1. N1. Measures or indicators of strategy and action plan accomplishment (7.6a[1]) should address yourstrategic objectives and goals identified in 2.1b(1) and your action plan performance measures andprojected performance identified in 2.2a(6) and 2.2b, respectively.

N2. For examples of measures of ethical behavior and stakeholder trust (7.6a[2]), see Item 1.2, Note 4.

N3. Responses to 7.6a(3) might include financial statement issues and risks, important internal and exter-nal auditor recommendations, and management’s responses to these matters. For some nonprofitorganizations, results of BIR audits also might be included.

N4. Regulatory and legal compliance results (7.6a[4]) should address requirements described in 1.2b.Workforce-related occupational health and safety results (e.g., Occupational Safety and Health Admin-istration [OSHA] reportable incidents) should be reported in 7.4a(3).

N5. Organizational citizenship results (7.6a[5]) should address support of the key communities discussedin 1.2c.


Notes:

This Glossary of Key Terms defines and briefly de-scribes terms used throughout the Criteria booklet thatare important to performance management. As youmay have noted, key terms are presented in SMALL CAPS/ARIAL every time they appear in the Categories andScoring Guidelines sections of this Criteria booklet.

Action PlansThe term “action plans” refers to specific actions thatrespond to short- and longer-term strategic objectives.Action plans include details of resource commitmentsand time horizons for accomplishment. Action plandevelopment represents the critical stage in planningwhen strategic objectives and goals are made specificso that effective, organization-wide understanding anddeployment are possible. In the Criteria, deploymentof action plans includes creating aligned measures forall departments and work units. Deployment also mightrequire specialized training for some employees orrecruitment of personnel.

An example of a strategic objective for a supplier in ahighly competitive industry might be to develop andmaintain a price leadership position. Action plans couldentail designing efficient processes and creating anaccounting system that tracks activity-level costs,aligned for the organization as a whole. Deploymentrequirements might include work unit and team train-ing in setting priorities based on costs and benefits.Organizational-level analysis and review likely wouldemphasize productivity growth, cost control, and qual-ity.

AlignmentThe term “alignment” refers to consistency of plans,processes, information, resource decisions, actions,results, and analyses to support key organization-widegoals. Effective alignment requires a common under-standing of purposes and goals. It also requires theuse of complementary measures and information forplanning, tracking, analysis, and improvement at threelevels: the organizational level, the key process level,and the work unit level.

AnalysisThe term “analysis” refers to an examination of factsand data to provide a basis for effective decisions.

Analysis often involves the determination of cause-ef-fect relationships. Overall organizational analysisguides the management of work systems and workprocesses toward achieving key business results andtoward attaining strategic objectives. Despite theirimportance, individual facts and data do not usuallyprovide an effective basis for actions or setting priori-ties. Effective actions depend on an understanding ofrelationships, derived from analysis of facts and data.

AnecdotalThe term “anecdotal” refers to process information thatlacks specific methods, measures, deployment mecha-nisms, and evaluation, improvement, and learning fac-tors. Anecdotal information frequently uses examplesand describes individual activities rather than system-atic processes.

An anecdotal response to how senior leaders deployperformance expectations might describe a specificoccasion when a senior leader visited all of theorganization’s facilities. On the other hand, a system-atic process might describe the communication meth-ods used by all senior leaders to deliver performanceexpectations on a regular basis to all employee loca-tions, the measures used to assess the effectivenessof the methods, and the tools and techniques used toevaluate and improve the communication methods.

ApproachThe term “approach” refers to the methods used by anorganization to address the PQA Criteria Item require-ments. Approach includes the appropriateness of themethods to the Item requirements and the effective-ness of their use. Approach is one of the dimensionsconsidered in evaluating Process Items.

Basic RequirementsThe term “basic requirements” refers to the topic Cri-teria users need to address when responding to themost central concept of an Item. Basic requirementsare the fundamental theme of that Item (e.g., your ap-proach for strategy development for Item 2.1). In theCriteria, the basic requirements of each Item are pre-sented as the Item title question.

Glossary of Key Terms



BenchmarksThe term “benchmarks” refers to processes and re-sults that represent best practices and performancefor similar activities, inside or outside an organization’sindustry. Organizations engage in benchmarking tounderstand the current dimensions of world-class per-formance and to achieve discontinuous(nonincremental) or “breakthrough” improvement.

Benchmarks are one form of comparative data. Othercomparative data organizations might use include in-dustry data collected by a third party (frequently in-dustry averages), data on competitors’ performance,and comparisons with similar organizations in the samegeographic area or that provide similar products andservices in other geographic areas.

CollaboratorsThe term “collaborators” refers to those organizationsor individuals who cooperate with your organization tosupport a particular activity or event or who cooperateon an intermittent basis when short-term goals arealigned or are the same. Typically, collaborations donot involve formal agreements or arrangements.

Core CompetenciesThe term “core competencies” refers to yourorganization’s areas of greatest expertise. Yourorganization’s core competencies are those strategi-cally important capabilities that provide an advantagein your marketplace or service environment. Core com-petencies frequently are challenging for competitorsor suppliers and partners to imitate, and they providea sustainable competitive advantage.

Core competencies may involve technology expertise,unique service offerings, a marketplace niche, or aparticular business acumen (e.g., business acquisi-tions).

CustomerThe term “customer” refers to actual and potential us-ers of your organization’s products, programs, or ser-vices. Customers include the end users of your prod-ucts, programs, or services, as well as others whomight be their immediate purchasers or users. Theseothers might include distributors, agents, or organiza-tions that further process your product as a compo-nent of their product. The Criteria address customersbroadly, referencing current and future customers, aswell as the customers of your competitors.

Customer-driven excellence is a PQA Core Valueembedded in the beliefs and behaviors of high-perfor-mance organizations. Customer focus impacts andshould integrate an organization’s strategic directions,its work systems and work processes, and its busi-

ness results.

Cycle TimeThe term “cycle time” refers to the time required tofulfill commitments or to complete tasks. Time mea-surements play a major role in the Criteria because ofthe great importance of time performance to improvingcompetitiveness and overall performance. “Cycle time”refers to all aspects of time performance. Cycle timeimprovement might include time to market, order ful-fillment time, delivery time, changeover time, customerresponse time, and other key measures of time.

DeploymentThe term “deployment” refers to the extent to which anapproach is applied in addressing the requirements ofa PQA Criteria Item. Deployment is evaluated on thebasis of the breadth and depth of application of theapproach to relevant work units throughout the organi-zation.

Deployment is one of the dimensions considered inevaluating Process Items.

DiversityThe term “diversity” refers to valuing and benefiting frompersonal differences. These differences address manyvariables, including race, religion, color, gender, na-tional origin, disability, sexual orientation, age, educa-tion, geographic origin, and skill characteristics, aswell as differences in ideas, thinking, academic disci-plines, and perspectives.

The PQA Criteria refer to the diversity of your workforcehiring and customer communities. Capitalizing on bothprovides enhanced opportunities for high performance;customer, workforce, and community satisfaction; andcustomer and workforce loyalty.

EffectiveThe term “effective” refers to how well a process or ameasure addresses its intended purpose. Determin-ing effectiveness requires (1) the evaluation of how wellthe approach is aligned with the organization’s needsand how well the approach is deployed or (2) the evalu-ation of the outcome of the measure used.

EmpowermentThe term “empowerment” refers to giving people theauthority and responsibility to make decisions and takeactions. Empowerment results in decisions being madeclosest to the “front line,” where work-related knowl-edge and understanding reside.

Empowerment is aimed at enabling people to satisfycustomers on first contact, to improve processes andincrease productivity, and to improve the organization’s


performance results. An empowered workforce requiresinformation to make appropriate decisions; thus, anorganizational requirement is to provide that informa-tion in a timely and useful way.Ethical BehaviorThe term “ethical behavior” refers to how an organiza-tion ensures that all its decisions, actions, and stake-holder interactions conform to the organization’s moraland professional principles. These principles shouldsupport all applicable laws and regulations and arethe foundation for the organization’s culture and val-ues. They distinguish “right” from “wrong.”

Senior leaders should act as role models for theseprinciples of behavior. The principles apply to all peopleinvolved in the organization, from temporary employ-ees to members of the board of directors, and need tobe communicated and reinforced on a regular basis.Although there is no universal model for ethical behav-ior, senior leaders should ensure that the organization’smission and vision are aligned with its ethical prin-ciples. Ethical behavior should be practiced with allstakeholders, including the workforce, shareholders,customers, partners, suppliers, and the organization’slocal community.

While some organizations may view their ethical prin-ciples as boundary conditions restricting behavior, well-designed and clearly articulated ethical principlesshould empower people to make effective decisionswith great confidence.

GoalsThe term “goals” refers to a future condition or perfor-mance level that one intends to attain. Goals can beboth shortand longer-term. Goals are ends that guideactions. Quantitative goals, frequently referred to as“targets,” include a numerical point or range. Targetsmight be projections based on comparative or com-petitive data. The term “stretch goals” refers to desiredmajor, discontinuous (nonincremental) or “break-through” improvements, usually in areas most criticalto your organization’s future success.

Goals can serve many purposes, including� clarifying strategic objectives and action plans

to indicate how you will measure success� fostering teamwork by focusing on a common

end� encouraging “out-of-the-box” thinking to achieve

a stretch goal� providing a basis for measuring and accelerat-

ing progress

GovernanceThe term “governance” refers to the system of man-

agement and controls exercised in the stewardship ofyour organization. It includes the responsibilities of yourorganization’s owners/shareholders, board of directors,and senior leaders. Corporate or organizational char-ters, by-laws, and policies document the rights andresponsibilities of each of the parties and describe howyour organization will be directed and controlled toensure (1) accountability to owners/shareholders andother stakeholders, (2) transparency of operations, and(3) fair treatment of all stakeholders. Governance pro-cesses may include the approval of strategic direc-tion, the monitoring and evaluation of the CEO’s per-formance, the establishment of executive compensa-tion and benefits, succession planning, financial au-diting, risk management, disclosure, and shareholderreporting. Ensuring effective governance is importantto stakeholders’ and the larger society’s trust and toorganizational effectiveness.

High-Performance WorkThe term “high-performance work” refers to work pro-cesses used to systematically pursue ever-higher lev-els of overall organizational and individual performance,including quality, productivity, innovation rate, and cycletime performance. High-performance work results inimproved service for customers and other stakehold-ers.

Approaches to high-performance work vary in form,function, and incentive systems. High-performancework focuses on workforce engagement. It frequentlyincludes cooperation between management and theworkforce, which may involve workforce bargainingunits; cooperation among work units, often involvingteams; self-directed responsibility andemployeeempowerment; and employee input to plan-ning. It also may incude individual and organizationalskill building and learning; learning from other organi-zations; flexibility in job design and work assignments;a flattened organizational structure, where decisionmaking is decentralized and decisions are made clos-est to the “front line”; and effective use of performancemeasures, including comparisons. Many high-perfor-mance organizations use monetary and nonmonetaryincentives based on factors such as organizationalperformance, team and individual contributions, andskill building. Also, high-performance work usuallyseeks to align the organization’s structure, core com-petencies, work, jobs, workforce development, andincentives.

HowThe term “how” refers to the systems and processesthat an organization uses to accomplish its missionrequirements. In responses to “how” questions in theProcess Item requirements, process descriptionsshould include information such as approach (meth-


ods and measures), deployment, learning, and inte-gration factors.

InnovationThe term “innovation” refers to making meaningfulchange to improve products, programs, services, pro-cesses, or organizational effectiveness and to createnew value for stakeholders. Innovation involves theadoption of an idea, process, technology, or productthat is either new or new to its proposed application.

Successful organizational innovation is a multistepprocess that involves development and knowledgesharing, a decision to implement, implementation,evaluation, and learning. Although innovation is oftenassociated with technological innovation, it is appli-cable to all key organizational processes that wouldbenefit from change, whether through break-throughimprovement or change in approach or outputs. It couldinclude fundamental changes in organizational struc-ture or the business model to more effectively accom-plish the organization’s work.

IntegrationThe term “integration” refers to the harmonization ofplans, processes, information, resource decisions,actions, results, and analyses to support key organi-zation-wide goals. Effective integration goes beyondalignment and is achieved when the individual compo-nents of a performance management system operateas a fully interconnected unit.

Integration is one of the dimensions considered in evalu-ating Process Items.

KeyThe term “key” refers to the major or most importantelements or factors, those that are critical to achiev-ing your intended outcome. The PQA Criteria, for ex-ample, refer to key challenges, key plans, key workprocesses, and key measures—those that are mostimportant to your organization’s success. They arethe essential elements for pursuing or monitoring adesired outcome.

Knowledge AssetsThe term “knowledge assets” refers to the accumu-lated intellectual resources of your organization. It isthe knowledge possessed by your organization andits workforce in the form of information, ideas, learn-ing, understanding, memory, insights, cognitive andtechnical skills, and capabilities. Your workforce, soft-ware, patents, databases, documents, guides, poli-cies and procedures, and technical drawings are re-positories of your organization’s knowledge assets.Knowledge assets are held not only by an organiza-

tion but reside within its customers, suppliers, andpartners as well.

Knowledge assets are the “know how” that your orga-nization has available to use, to invest, and to grow.Building and managing its knowledge assets are keycomponents for your organization to create value foryour stakeholders and to help sustain a competitiveadvantage.

Leadership SystemThe term “leadership system” refers to how leadershipis exercised, formally and informally, throughout theorganization; it is the basis for and the way key deci-sions are made, communicated, and carried out. Itincludes structures and mechanisms for decisionmaking; two-way communication; selection and de-velopment of leaders and managers; and reinforcementof values, ethical behavior, directions, and performanceexpectations.

An effective leadership system respects the capabili-ties and requirements of workforce members and otherstakeholders, and it sets high expectations for perfor-mance and performance improvement. It builds loyal-ties and teamwork based on the organization’s visionand values and the pursuit of shared goals. It encour-ages and supports initiative and appropriate risk tak-ing, subordinates organizational structure to purposeand function, and avoids chains of command that re-quire long decision paths. An effective leadership sys-tem includes mechanisms for the leaders to conductselfexamination, receive feedback, and improve.

LearningThe term “learning” refers to new knowledge or skillsacquired through evaluation, study, experience, andinnovation. The PQA Criteria include two distinct kindsof learning: organizational and personal. Organizationallearning is achieved through research and development,evaluation and improvement cycles, workforce andstakeholder ideas and input, best practice sharing, andbenchmarking. Personal learning is achieved througheducation, training, and developmental opportunitiesthat further individual growth.

To be effective, learning should be embedded in theway an organization operates. Learning contributes toa competitive advantage and sustainability for the or-ganization and its workforce.

Learning is one of the dimensions considered in evalu-ating Process Items.

LevelsThe term “levels” refers to numerical information thatplaces or positions an organization’s results and per-


formance on a meaningful measurement scale. Per-formance levels permit evaluation relative to past per-formance, projections, goals, and appropriate compari-sons.

Measures and IndicatorsThe term “measures and indicators” refers to numeri-cal information that quantifies input, output, and per-formance dimensions of processes, products, pro-grams, projects, services, and the overall organization(outcomes). Measures and indicators might be simple(derived from one measurement) or composite.

The Criteria do not make a distinction between mea-sures and indicators. However, some users of theseterms prefer “indicator” (1) when the measurement re-lates to performance but is not a direct measure ofsuch performance (e.g., the number of complaints isan indicator of dissatisfaction but not a direct mea-sure of it) and (2) when the measurement is a predic-tor (“leading indicator”) of some more significant per-formance (e.g., increased customer satisfaction mightbe a leading indicator of market share gain).

MissionThe term “mission” refers to the overall function of anorganization. The mission answers the question, “Whatis this organization attempting to accomplish?” Themission might define customers or markets served,distinctive or core competencies, or technologies used.

Multiple RequirementsThe term “multiple requirements” refers to the individualquestions Criteria users need to answer within eachArea to Address. These questions constitute the de-tails of an Item’s requirements. They are presented inblack text under each Item’s Area(s) to Address.

Overall RequirementsThe term “overall requirements” refers to the topicsCriteria users need to address when responding to thecentral theme of an Item. Overall requirements addressthe most significant features of the Item requirements.In the Criteria, the overall requirements of each Itemare presented in one or more introductory sentencesprinted in bold.

PartnersThe term “partners” refers to those key organizationsor individuals who are working in concert with your or-ganization to achieve a common goal or to improveperformance. Typically, partnerships are formal arrange-ments for a specific aim or purpose, such as to achievea strategic objective or to deliver a specific product orservice.

Formal partnerships are usually for an extended pe-

riod of time and involve a clear understanding of theindividual and mutual roles and benefits for the part-ners.

PerformanceThe term “performance” refers to output results andtheir outcomes obtained from processes, products, andservices that permit evaluation and comparison rela-tive to goals, standards, past results, and other orga-nizations. Performance can be expressed in nonfinan-cial and financial terms.

The PQA Criteria address four types of performance:(1) product and service, (2) customer-focused, (3) fi-nancial and marketplace, and (4) operational.

“Product and service performance” refers to performancerelative to measures and indicators of product andservice characteristics important to customers. Ex-amples include product reliability, on-time delivery,customer-experienced defect levels, and service re-sponse time. For nonprofit organizations, “product andservice performance” examples might include programand project performance in the areas of rapid responseto emergencies, at-home services, or multilingual ser-vices.

“Customer-focused performance” refers to performancerelative to measures and indicators of customers’ per-ceptions, reactions, and behaviors. Examples includecustomer retention, complaints, and customer surveyresults.

“Financial and marketplace performance” refers to per-formance relative to measures of cost, revenue, andmarket position, including asset utilization, assetgrowth, and market share. Examples include returnson investments, value added per employee, debt-to-equity ratio, returns on assets, operating margins,performance to budget, amount of reserve funds, cash-to-cash cycle time, other profitability and liquiditymeasures, and market gains.

“Operational performance” refers to workforce, leader-ship, organizational, and ethical performance relativeto effectiveness, efficiency, and accountability mea-sures and indicators. Examples include cycle time,productivity, waste reduction, workforce turnover,workforce cross-training rates, regulatory compliance,fiscal accountability, and community involvement.Operational performance might be measured at thework unit level, key work process level, and organiza-tional level.

Performance ExcellenceThe term “performance excellence” refers to an inte-grated approach to organizational performance man-


agement that results in (1) delivery of ever-improvingvalue to customers and stakeholders, contributing toorganizational sustainability; (2) improvement of over-all organizational effectiveness and capabilities; and(3) organizational and personal learning. The PQACriteria for Performance Excellence provide a frame-work and an assessment tool for understanding orga-nizational strengths and opportunities for improvementand thus for guiding planning efforts.

Performance ProjectionsThe term “performance projections” refers to estimatesof future performance. Projections may be inferred frompast performance, may be based on competitors’ orsimilar organizations’ performance that must be metor exceeded, may be predicted based on changes ina dynamic environment, or may be goals for futureperformance. Projections integrate estimates of yourorganization’s rate of improvement and change, andthey may be used to indicate where breakthrough im-provement or innovation is needed. Thus, performanceprojections serve as a key management planning tool.

ProcessThe term “process” refers to linked activities with thepurpose of producing a product or service for a cus-tomer (user) within or outside the organization. Gener-ally, processes involve combinations of people, ma-chines, tools, techniques, materials, and improve-ments in a defined series of steps or actions. Pro-cesses rarely operate in isolation and must be con-sidered in relation to other processes that impact them.In some situations, processes might require adher-ence to a specific sequence of steps, with documen-tation (sometimes formal) of procedures and require-ments, including welldefined measurement and con-trol steps.

In many service situations, particularly when custom-ers are directly involved in the service, process is usedin a more general way (i.e., to spell out what must bedone, possibly including a preferred or expected se-quence). If a sequence is critical, the service needs toinclude information to help customers understand andfollow the sequence. Such service processes also re-quire guidance to the providers of those services onhandling contingencies related to the possible actionsor behaviors of those served.

In knowledge work, such as strategic planning, re-search, development, and analysis, process does notnecessarily imply formal sequences of steps. Rather,process implies general understandings regarding com-petent performance, such as timing, options to be in-cluded, evaluation, and reporting. Sequences mightarise as part of these understandings.

In PQA Scoring System, your process achievementlevel is assessed. This achievement level is based onfour factors that can be evaluated for each of anorganization’s key processes: Approach, Deployment,Learning, and Integration.

ProductivityThe term “productivity” refers to measures of the effi-ciency of resource use.

Although the term often is applied to single factors,such as the workforce (labor productivity), machines,materials, energy, and capital, the productivity con-cept applies as well to the total resources used inproducing outputs. The use of an aggregate measureof overall productivity allows a determination of whetherthe net effect of overall changes in a process —possi-bly involving resource tradeoffs—is beneficial.

PurposeThe term “purpose” refers to the fundamental reasonthat an organization exists. The primary role of pur-pose is to inspire an organization and guide its settingof values. Purpose is generally broad and enduring.Two organizations in different businesses could havesimilar purposes, and two organizations in the samebusiness could have different purposes.

ResultsThe term “results” refers to outputs and outcomesachieved by an organization in addressing the require-ments of a PQA Criteria Item. Results are evaluatedon the basis of current performance; performance rela-tive to appropriate comparisons; the rate, breadth, andimportance of performance improvements; and the re-lationship of results measures to key organizationalperformance requirements.

SegmentThe term “segment” refers to a part of an organization’soverall customer, market, product or service line, orworkforce base. Segments typically have commoncharacteristics that can be grouped logically. In Re-sults Items, the term refers to disaggregating resultsdata in a way that allows for meaningful analysis of anorganization’s performance. It is up to each organiza-tion to determine the specific factors that it uses tosegment its customers, markets, products, services,and workforce.

Understanding segments is critical to identifying thedistinct needs and expectations of different customer,market, and workforce groups and to tailoring prod-ucts, services, and programs to meet their needs andexpectations. As an example, market segmentationmight be based on distribution channels, businessvolume, geography, or technologies employed.


Workforce segmentation might be based on geogra-phy, skills, needs, work assignments, or job classifi-cation.

Senior LeadersThe term “senior leaders” refers to an organization’ssenior management group or team. In many organiza-tions, this consists of the head of the organization andhis or her direct reports.

StakeholdersThe term “stakeholders” refers to all groups that are ormight be affected by an organization’s actions andsuccess. Examples of key stakeholders might includecustomers, the workforce, partners, collaborators,governing boards, stockholders, donors, suppliers,taxpayers, regulatory bodies, policy makers, funders,and local and professional communities.

Strategic ChallengesThe term “strategic challenges” refers to those pres-sures that exert a decisive influence on anorganization’s likelihood of future success. These chal-lenges frequently are driven by an organization’s fu-ture competitive position relative to other providers ofsimilar products or services. While not exclusively so,strategic challenges generally are externally driven.However, in responding to externally driven strategicchallenges, an organization may face internal strate-gic challenges.

External strategic challenges may relate to customeror market needs or expectations; product, service, ortechnological changes; or financial, societal, and otherrisks or needs. Internal strategic challenges may re-late to an organization’s capabilities or its human andother resources.

See the definition of “strategic objectives” that imme-diately follows for the relationship between strategicchallenges and the strategic objectives an organiza-tion articulates to address key challenges.

Strategic ObjectivesThe term “strategic objectives” refers to anorganization’s articulated aims or responses to addressmajor change or improvement, competitiveness or so-cial issues, and business advantages. Strategic ob-jectives generally are focused both externally and in-ternally and relate to significant customer, market,product, service, or technological opportunities andchallenges (strategic challenges). Broadly stated, theyare what an organization must achieve to remain orbecome competitive and ensure long-termsustainability. Strategic objectives set an organization’slonger-term directions and guide resource allocationsand redistributions.

SustainabilityThe term “sustainability” refers to your organization’sability to address current business needs and to havethe agility and strategic management to prepare suc-cessfully for your future business, market, and operat-ing environment. Both external and internal factors needto be considered. The specific combination of factorsmight include industrywide and organization-specificcomponents.

Sustainability considerations might include workforcecapability and capacity, resource availability, technol-ogy, knowledge, core competencies, work systems,facilities, and equipment. In addition, sustainability hasa component related to preparedness for real-time orshort-term emergencies.

SystematicThe term “systematic” refers to approaches that arewellordered, repeatable, and use data and informationso learning is possible. In other words, approachesare systematic if they build in the opportunity for evalu-ation, improvement, and sharing, thereby permitting again in maturity.

TrendsThe term “trends” refers to numerical information thatshows the direction and rate of change for anorganization’s results. Trends provide a time sequenceof organizational performance.

A minimum of three historical (not projected) datapoints generally is needed to begin to ascertain a trend.More data points are needed to define a statisticallyvalid trend. The time period for a trend is determinedby the cycle time of the process being measured.Shorter cycle times demand more frequent measure-ment, while longer cycle times might require longertime periods before meaningful trends can be deter-mined.

Examples of trends called for by the Criteria includedata related to product and service performance, cus-tomer and workforce satisfaction and dissatisfactionresults, financial performance, marketplace perfor-mance, and operational performance, such as cycletime and productivity.

ValueThe term “value” refers to the perceived worth of a prod-uct, service, process, asset, or function relative to costand to possible alternatives.

Organizations frequently use value considerations todetermine the benefits of various options relative totheir costs, such as the value of various product andservice combinations to customers. Organizations need


to understand what different stakeholder groups valueand then deliver value to each group. This frequentlyrequires balancing value for customers and other stake-holders, such as your workforce and the community.

ValuesThe term “values” refers to the guiding principles andbehaviors that embody how your organization and itspeople are expected to operate. Values reflect andreinforce the desired culture of an organization. Val-ues support and guide the decision making of everyworkforce member, helping the organization accom-plish its mission and attain its vision in an appropriatemanner. Examples of values might include demonstrat-ing integrity and fairness in all interactions, exceedingcustomer expectations, valuing individuals and diver-sity, protecting the environment, and striving for perfor-mance excellence every day.

VisionThe term “vision” refers to the desired future state ofyour organization. The vision describes where the or-ganization is headed, what it intends to be, or how itwishes to be perceived in the future.

Work SystemsThe term “work systems” refers to how the work ofyour organization is accomplished. Work systems in-volve your workforce, your key suppliers and partners,your contractors, your collaborators, and other com-ponents of the supply chain needed to produce anddeliver your products, services, and business and sup-port processes. Your work systems coordinate theinternal work processes and the external resourcesnecessary for you to develop, produce, and deliver yourproducts and services to your customer and to suc-ceed in your marketplace.

Decisions about work systems are strategic. Thesedecisions involve protecting and capitalizing on corecompetencies and deciding what should be procuredor produced outside your organization in order to beefficient and sustainable in your marketplace.

WorkforceThe term “workforce” refers to all people actively in-volved in accomplishing the work of your organization,including paid employees (e.g., permanent, part-time,temporary, and telecommuting employees, as well ascontract employees supervised by the organization)and volunteers, as appropriate.The workforce includesteam leaders, supervisors, and managers at all levels.

Workforce CapabilityThe term “workforce capability” refers to yourorganization’s ability to accomplish its work processesthrough the knowledge, skills, abilities, and compe-

tencies of its people.

Capability may include the ability to build and sustainrelationships with your customers; to innovate and tran-sition to new technologies; to develop new products,services, and work processes; and to meet changingbusiness, market, and regulatory demands.

Workforce CapacityThe term “workforce capacity” refers to yourorganization’s ability to ensure sufficient staffing lev-els to accomplish its work processes and success-fully deliver your products and services to your cus-tomers, including the ability to meet seasonal or vary-ing demand levels.

Workforce EngagementThe term “workforce engagement” refers to the extentof workforce commitment, both emotional and intel-lectual, to accomplishing the work, mission, and vi-sion of the organization. Organizations with high lev-els of workforce engagement are often characterizedby high-performing work environments in which peopleare motivated to do their utmost for the benefit of theircustomers and for the success of the organization.

In general, members of the workforce feel engagedwhen they find personal meaning and motivation in theirwork and when they receive positive interpersonal andworkplace support. An engaged workforce benefits fromtrusting relationships, a safe and cooperative environ-ment, good communication and information flow, em-powerment, and performance accountability. Key fac-tors contributing to engagement include training andcareer development, effective recognition and rewardsystems, equal opportunity and fair treatment, andfamily friendliness.

2007 Public Sector Criteria: Category and Item Descriptions

Preface: Organizational Profile

The Organizational Profile provides an overview of yourorganization. The profile addresses your operatingenvironment, your key organizational relationships,your competitive environment and strategic challenges,and your approach to performance improvement. YourOrganizational Profile provides a context for under-standing your organization. It helps the Assessors andJudges when reviewing your application to understandwhat you consider important. It also helps you to guideand prioritize the information you present in responseto the Criteria Items in Categories 1–7.

The Organizational Profile provides your organizationwith critical insight into the key internal and externalfactors that shape your operating environment. Thesefactors, such as the mission, vision, values, competi-tive environment, and strategic challenges, impact theway your organization is run and the decisions youmake. As such, the Organizational Profile helps yourorganization better understand the context in which itoperates; the key requirements for current and futurebusiness success and organizational sustainability;and the needs, opportunities, and constraints placedon your organization’s performance management sys-tem.

P.1 Organizational Description: What are your keyorganizational characteristics?

Purpose

This Item addresses the key characteristics and rela-tionships that shape your organizational environment.It also addresses your organization’s governance sys-tem. The aim is to set the context for your organiza-tion and for your responses to the Criteria requirementsin Categories 1–7.

Comments

• Use of such terms as “purpose,” “vision,” “mission,”and “values” varies depending on the organization, andsome organizations may not use one or more of these

terms. Nevertheless, you should have a clear under-standing of the essence of your organization, why itexists, and where your senior leaders want to take theorganization in the future. This clarity enables you tomake and implement strategic decisions affecting thefuture of your organization.

• The regulatory environment in which you operateplaces requirements on your organization and impactshow you run your organization. Understanding thisenvironment is key to making effective operational andstrategic decisions. Further, it allows you to identifywhether you are merely complying with the minimumrequirements of applicable laws, regulations, and stan-dards of practice or exceeding them, a hallmark ofleading organizations.

• Leading organizations have well-defined governancesystems with clear reporting relationships. It is impor-tant to clearly identify which functions are performedby senior leaders and, as applicable, by your gover-nance board and your parent organization. Board in-dependence and accountability frequently are key con-siderations in the governance structure.

• In supplier-dependent organizations, suppliers playcritical roles in processes that are important to run-ning the business and to maintaining or achieving asustainable competitive advantage. Supply chain re-quirements might include on-time or just-in-time deliv-ery, flexibility, variable staffing, research and designcapability, and customized manufacturing or services.


• A particularly significant challenge, if it occurs toyour organization, is being unprepared for a disruptivetechnology that threatens your competitive position oryour marketplace. In the past, such technologies haveincluded personal computers replacing typewriters, cellphones challenging traditional and pay phones, fax ma-chines capturing business from overnight delivery ser-vices, and e-mail challenging all other means of corre-spondence. Today, organizations need to be scanningthe environment inside and outside their immediateindustry to detect such challenges at the earliest pos-sible point in time.

• One of the many issues facing organizations todayis how to manage, use, evaluate, and share their ever-increasing organizational knowledge. Leading organi-zations already benefit from the knowledge assets oftheir workforce, customers, suppliers, collaborators,and partners, who together drive organizational learn-ing and improve performance.

Leadership (Category 1)Leadership addresses how your senior leaders guideand sustain your organization, setting organizationalvision, values, and performance expectations. Atten-tion is given to how your senior leaders communicatewith your workforce, develop future leaders, measureorganizational performance, and create an environmentthat encourages ethical behavior and high performance.The Category also includes your organization’s gover-nance system and how it ensures ethical behavior andpractices good citizenship.

1.1 Organizational Leadership: How do your seniorleaders lead?

Purpose

This Item examines the key aspects of your seniorleaders’ responsibilities. It examines how your seniorleaders set and communicate the organization’s vi-sion and values and how they practice these values. Itfocuses on your senior leaders’ actions to create asustainable, high-performance organization with a busi-ness and customer focus.

Comments

• Senior leadership’s central role in setting values anddirections, communicating, creating and balancingvalue for all stakeholders, and creating an organiza-tional bias for action are the focus of this Item. Suc-cess requires a strong orientation to the future and acommitment to improvement, innovation, and organi-

P.2 Organizational Challenges: What are your keyorganizational challenges?

Purpose

This Item addresses the competitive environment inwhich your organization operates and the key strate-gic challenges that your organization faces. It alsoaddresses how you approach performance improve-ment and organizational learning. The aim is to under-stand your key organizational challenges and yoursystem for maintaining a sustainable advantage.

Comments

• Knowledge of an organization’s strengths, vulnerabili-ties, and opportunities for both improvement and growthis essential to the success and sustainability of theorganization. With this knowledge, you can identifythose products, service and program offerings, pro-cesses, competencies, and performance attributes thatare unique to your organization; those that set youapart from other organizations; and those that helpyou to sustain your competitive advantage.

• Understanding who your competitors are, how manyyou have, and their key characteristics is essential fordetermining what your competitive advantage is in yourindustry and marketplace. Leading organizations havean in-depth understanding of their current competitiveenvironment, including the factors that affect day-to-day performance and factors that could impact futureperformance.

• Sources of comparative and competitive data mightinclude industry journals and other publications,benchmarking activities, annual reports for publiclytraded companies and public organizations, confer-ences, local networks, and industry associations.

• Operating your organization in today’s highly com-petitive marketplace means you are facing many stra-tegic challenges that can affect your ability to sustainperformance and maintain your competitive position.These challenges might include your operational costs(e.g., materials, labor, or geographic location); expand-ing or decreasing markets; mergers or acquisitionsboth by your organization and by your competitors;economic conditions, including fluctuating demand andlocal and global economic downturns; the cyclicalnature of your industry; the introduction of new or sub-stitute products or services; rapid technologicalchanges; or new competitors entering the market. Inaddition, your organization may face challenges re-lated to the recruitment, hiring, and retention of a quali-fied workforce.


• This Item addresses the use of resource-sustainingprocesses. These processes might include the use of“green” technologies, the replacement of hazardouschemicals with water-based chemicals, energy con-servation, the use of cleaner energy sources, or therecycling of by-products or wastes.

• Social responsibility implies going beyond a compli-ance orientation. Good citizenship opportunities areavailable to organizations of all sizes. These opportu-nities might include encouraging and supporting youremployees’ community service.

• Examples of organizational community involvementinclude partnering with schools and school boards toimprove education; partnering with health care provid-ers to improve health in the local community by pro-viding education and volunteer services to addresspublic health issues; and partnering to influence trade,business, and professional associations to engage inbeneficial, cooperative activities, such as sharing bestpractices to improve overall U.S. global competitive-ness and the environment. Examples specifically fornonprofit organizations include partnering with othernonprofit organizations or businesses to improve over-all performance and stewardship of public and chari-table resources.

Strategic Planning (Category 2)

Strategic Planning addresses strategic and action plan-ning, deployment of plans, how adequate resourcesare ensured to accomplish the plans, how plans arechanged if circumstances require a change, and howaccomplishments are measured and sustained. TheCategory stresses that longterm organizationalsustainability and your competitive environment are keystrategic issues that need to be integral parts of yourorganization’s overall planning.

While many organizations are increasingly adept atstrategic planning, plan execution is still a significantchallenge. This is especially true given market de-mands to be agile and to be prepared for unexpectedchange, such as disruptive technologies that can up-set an otherwise fast-paced but more predictable mar-ketplace. This Category highlights the need to place afocus not only on developing your plans but also onyour capability to execute them.

The PQA Criteria emphasize three key aspects of or-ganizational excellence. These aspects are importantto strategic planning:


zational sustainability. Increasingly, this requires cre-ating an environment for empowerment, agility, andlearning.

• In highly respected organizations, senior leaders arecommitted to the development of the organization’sfuture leaders and to the reward and recognition ofcontributions by members of the workforce. Seniorleaders personally participate in the development offuture leaders, in succession planning, and in recogni-tion opportunities and events that celebrate theworkforce. Development activities for future leadersmight include personal mentoring or participation inleadership development courses.

1.2 Governance and Social Responsibilities: Howdo you govern and address your social responsi-bilities?

Purpose

This Item examines key aspects of your organization’sgovernance system. It also examines how your orga-nization fulfills its responsibilities to the public, ensuresthat everyone in the organization behaves legally andethically, and practices good citizenship.

Comments

• The organizational governance requirement ad-dresses the need for a responsible, informed, and ac-countable governance or advisory body that can pro-tect the interests of key stakeholders (including stock-holders) in publicly traded, private, and nonprofit orga-nizations. This body should have independence in re-view and audit functions, as well as a performanceevaluation function that monitors organizational andCEO or chief administrator performance.

• An integral part of performance management andimprovement is proactively addressing (1) the need forethical behavior, (2) the observance of all legal andregulatory requirements, and (3) risk factors. Ensur-ing high performance in these areas requires estab-lishing appropriate measures or indicators that seniorleaders track in their performance reviews. Your orga-nization should be sensitive to issues of public con-cern, whether or not these issues are currently em-bodied in laws and regulations. Role model organiza-tions look for opportunities to exceed requirements andto excel in areas of legal and ethical behavior.

• Public concerns that charitable and government or-ganizations should anticipate might include the costof products, programs, and services; timely and equi-table access to products, programs, and services; andperceptions about the organization’s stewardship ofits resources.

2.1 Strategy Development : How do you developyour strategy?

Purpose

This Item examines how your organization determinesits strategic challenges and advantages and estab-lishes its strategy and strategic objectives to addressthese challenges and enhance its advantages. The aimis to strengthen your overall performance, competitive-ness, and future success.

Comments• This Item calls for basic information on the planningprocess and for information on all the key influences,risks, challenges, and other requirements that mightaffect your organization’s future opportunities and di-rections—taking as long-term a view as appropriateand possible from the perspectives of your organiza-tion and your industry or marketplace. This approachis intended to provide a thorough and realistic contextfor the development of a customer- and market-focusedstrategy to guide ongoing decision making, resourceallocation, and overall management.

•This Item is intended to cover all types of businesses,forprofit and nonprofit organizations, competitive situ-ations, strategic issues, planning approaches, andplans. The requirements explicitly call for a future-ori-ented basis for action but do not imply planning de-partments, specific planning cycles, or a specified wayof visualizing the future. Even if your organization isseeking to create an entirely new business, it is stillnecessary to set and to test the objectives that defineand guide critical actions and performance.

• This Item emphasizes competitive leadership, whichusually depends on revenue growth and operationaleffectiveness. Competitive leadership requires a viewof the future that includes not only the markets or seg-ments in which your organization competes but alsohow it competes. How it competes presents manyoptions and requires that you understand yourorganization’s and your competitors’ strengths andweaknesses, including your core competencies. Al-though no specific time horizons are included, the thrustof this Item is sustained competitive leadership.

• An increasingly important part of strategic planningis projecting the future competitive and collaborativeenvironment. Such projections help to detect and re-duce competitive threats, to shorten reaction time, andto identify opportunities. Depending on the size andtype of organization, maturity of markets, pace ofchange, and competitive parameters (such as price,costs, or the innovation rate), organizations might usea variety of modeling, scenarios, or other techniquesand judgments to anticipate the competitive and col-laborative environment.

• Customer-driven quality is a strategic view of quality.The focus is on the drivers of customer satisfaction,customer retention, customer loyalty, new markets,and market share—key factors in competitiveness,profitability, and organizational sustainability.

• Operational performance improvement and innova-tion contribute to short- and longer-term productivitygrowth and cost/price competitiveness. Building op-erational capability—including speed, responsiveness,and flexibility—represents an investment in strength-ening your organizational fitness.

• Organizational and personal learning are necessarystrategic considerations in today’s fast-paced environ-ment. The Criteria emphasize that improvement andlearning need to be embedded in work processes. Thespecial role of strategic planning is to align work pro-cesses and learning initiatives with your organization’sstrategic directions, thereby ensuring that improvementand learning prepare you for and reinforce organiza-tional priorities.

The Strategic Planning Category examines how yourorganization• determines its key strengths, weaknesses, opportu-nities, and threats and its ability to execute your strat-egy;• optimizes the use of resources, ensures the avail-ability of a skilled workforce, and bridges short- andlongerterm requirements that may entail capital ex-penditures, technology development or acquisition,supplier development, and new partnerships or collabo-rations; and• ensures that deployment will be effective—that thereare mechanisms to communicate requirements andachieve alignment on three levels: (1) the organizationand executive level, (2) the work system and work pro-cess level, and (3) the work unit and individual job level.

The requirements in the Strategic Planning Categoryencourage strategic thinking and acting in order todevelop a basis for a distinct competitive position inthe marketplace. These requirements do not imply for-malized plans, planning systems, departments, or spe-cific planning cycles. They also do not imply that allyour improvements could or should be planned in ad-vance. An effective improvement system combinesimprovements of many types and degrees of involve-ment. This requires clear strategic guidance, particu-larly when improvement alternatives, including majorchange or innovation, compete for limited resources.In most cases, setting priorities depends heavily on acost rationale. However, you also might have criticalrequirements, such as public responsibilities, that arenot driven by cost considerations alone.


2.2 Strategy Deployment: How do you deploy yourstrategy?

Purpose

This Item examines how your organization convertsyour strategic objectives into action plans to accom-plish the objectives. It also examines how your organi-zation assesses progress relative to these action plans.The aim is to ensure that your strategies are success-fully deployed for goal achievement.

Comments

• This Item asks how your action plans are developedand deployed. Accomplishment of action plans requiresresources and performance measures, as well as thealignment of work unit and supplier and partner plans.Of central importance is how you achieve alignmentand consistency—for example, via work systems, workprocesses, and key measurements. Also, alignmentand consistency are intended to provide a basis forsetting and communicating priorities for ongoing im-provement activities —part of the daily work of all workunits. In addition, performance measures are criticalfor tracking performance.

• Many types of analyses can be performed to ensurethat adequate financial resources are available to sup-port accomplishment of your action plans. For currentoperations, these efforts might include the analysis ofcash flows, net income statements, and current liabili-ties versus current assets. For investments to accom-plish action plans, the efforts might include analysisof discounted cash flows, return on investment (ROI),or return on invested capital (ROIC). The specific typesof analyses will vary from organization to organization.These analyses should help your organization assessthe financial viability of your current operations andthe potential viability of and risks associated with youraction plan initiatives.

• Action plans should include human resource plansthat are aligned with and support your overall strategy.

• Examples of possible human resource plan elementsare:

• a redesign of your work organization and jobsto increase workforce empowerment and de-cision making;

• initiatives to promote greater labor-manage-ment cooperation, such as union partnerships;

• consideration of the impacts of outsourcingon your current workforce and initiatives;


• initiatives to foster knowledge sharing and or-ganizational learning;

• modification of your compensation and rec-ognition systems to recognize team, organi-zational, stock market, customer, or otherperformance attributes; or

• education and training initiatives, such as de-velopmental programs for future leaders, part-nerships with universities to help ensure theavailability of an educated and skilledworkforce, and establishment of training pro-grams on new technologies important to thefuture success of your workforce and your or-ganization.

• Projections and comparisons in this Item are in-tended to improve your organization’s ability to under-stand and track dynamic, competitive performancefactors. Projected performance might include changesresulting from new business ventures, entry into newmarkets, introduction of new technologies, product orservice innovations, or other strategic thrusts. Throughthis tracking process, your organization should bebetter prepared to take into account its rate of improve-ment and change relative to that of competitors or com-parable organizations and relative to its own targets orstretch goals. Such tracking serves as a key diagnos-tic management tool.


Customer and Market Focus (Category 3)

Customer and Market Focus addresses how your or-ganization seeks to understand the voice of the cus-tomer and of the marketplace, with a focus on meet-ing customers’ requirements, needs, and expectations;delighting customers; and building loyalty. The Cat-egory stresses relationships as an important part ofan overall listening, learning, and performance excel-lence strategy. Your customer satisfaction and dis-satisfaction results provide vital information for under-standing your customers and the marketplace. In manycases, such results and trends provide the most mean-ingful information, not only on your customers’ viewsbut also on their marketplace behaviors (e.g., repeatbusiness and positive referrals) and how these viewsand behaviors may contribute to the sustainability ofyour organization in the marketplace.

3.1 Customer and Market Knowledge: How do youobtain and use customer and market knowledge?

Purpose

This Item examines your organization’s voice-of-thecustomer processes for gaining knowledge about theneeds and desires of your current and future custom-ers and markets, with the aim of offering relevant prod-ucts and services; understanding emerging customerrequirements, needs, and expectations; and keepingpace with marketplace changes and changing waysof doing business.

Comments

� In a rapidly changing technological, competitive, andsocial environment, many factors may affect customerpreference and loyalty and your interface with custom-ers in the marketplace. This makes it necessary tocontinually listen and learn. To be effective, listeningand learning need to be closely linked with yourorganization’s overall business strategy.

� Knowledge of customer groups and market seg-ments allows your organization to tailor listening andlearning strategies and offerings, to support and tailoryour marketing strategies, to develop new business,and to ensure organizational sustainability.

� A relationship strategy may be possible with somecustomers but not with others. Differing relationshipsmay require distinctly different listening and learningstrategies.

� Selection of voice-of-the-customer strategies de-

pends on your organization’s key business factors.Increasingly, organizations listen to the voice of thecustomer via multiple modes. Some frequently usedmodes include focus groups with key customers; closeintegration with key customers; interviews with lostand potential customers about their purchasing or re-lationship decisions; use of the customer complaintprocess to understand key product and service at-tributes; win/loss analysis relative to competitors andother organizations providing similar products or ser-vices; and survey or feedback information, includinginformation collected on the Internet.

3.2 Customer Relationships and Satisfaction: Howdo you build relationships and grow customer sat-isfaction and loyalty?

Purpose

This Item examines your organization’s processes forbuilding customer relationships and determining cus-tomer satisfaction and dissatisfaction, with the aim ofacquiring new customers, retaining existing custom-ers, and developing new market opportunities.

Comments

� This Item emphasizes how you obtain actionableinformation from customers. Information that is action-able can be tied to key product, service, and businessprocesses and be used to determine cost and rev-enue implications for setting improvement goals andpriorities for change.

� Complaint aggregation, analysis, and root causedeterminationshould lead to effective elimination of the causesof complaints and to the setting of priorities for pro-cess, product, and service improvements. Successfuloutcomes require effective deployment of informationthroughout the organization.

� In determining customers’ satisfaction and dissat-isfaction, a key aspect is their comparative satisfac-tion with competitors, competing or alternative offer-ings, and/or organizations providing similar productsor services. Such information might be derived fromyour own comparative studies or from independent stud-ies. The factors that lead to customer preference areof critical importance in understanding factors that drivemarkets and potentially affect longer-term competitive-ness and organizational sustainability.

(2) comparative information and information obtainedfrom benchmarking often provide the impetus for sig-nificant (“breakthrough”) improvement or change, and(3) comparing performance information frequently leadsto a better understanding of your processes and theirperformance. Comparative information also may sup-port business analysis and decisions relating to corecompetencies, partnering, and outsourcing.

� Your effective selection and use of comparative dataand information require (1) determination of needs andpriorities, (2) criteria for seeking appropriate sourcesfor comparisons —from within and outside yourorganization’s industry and markets, and (3) use ofdata and information to set stretch goals and to pro-mote major, nonincremental (“breakthrough”) improve-ments in areas most critical to your organization’scompetitive strategy.

� The organizational review called for in this Item isintended to cover all areas of performance. This in-cludes not only how well you currently are performingbut also how well you are moving toward the future. Itis anticipated that the review findings will provide areliable means to guide both improvement and oppor-tunities for innovation that are tied to your organization’skey objectives, core competencies, success factors,and measures. Therefore, an important component ofyour organizational review is the translation of the re-view findings into an action agenda sufficiently spe-cific for deployment throughout your organization andto your suppliers, partners, collaborators, and keycustomers.

� Analyses that your organization conducts to gainan understanding of performance and needed actionsmay vary widely depending on your type of organiza-tion, size, competitive environment, and other factors.Examples of possible analyses include

• how product and service improvements corre-late with key customer indicators, such ascustomer satisfaction, customer retention,and market share

• cost and revenue implications of customer-related problems and effective problem reso-lution

• interpretation of market share changes interms of customer gains and losses andchanges in customer satisfaction

• improvement trends in key operational perfor-mance indicators, such as productivity, cycletime, waste reduction, new product introduc-tion, and defect levels


Measurement, Analysis, and Knowledge Manage-ment (Category 4)

The Measurement, Analysis, and Knowledge Manage-ment Category is the main point within the Criteria forall key information about effectively measuring, ana-lyzing, and improving performance and managing or-ganizational knowledge to drive improvement and or-ganizational competitiveness. In the simplest terms,Category 4 is the “brain center” for the alignment ofyour organization’s operations with its strategic ob-jectives. Central to such use of data and informationare their quality and availability. Furthermore, sinceinformation, analysis, and knowledge managementmight themselves be primary sources of competitiveadvantage and productivity growth, this Category alsoincludes such strategic considerations.

4.1 Measurement, Analysis, and Improvement ofOrganizational Performance: How do you measure,analyze, and then improve organizational perfor-mance?

Purpose

This Item examines your organization’s selection,management, and use of data and information for per-formance measurement, analysis, and review in sup-port of organizational planning and performance im-provement. The Item serves as a central collection andanalysis point in an integrated performance measure-ment and management system that relies on financialand nonfinancial data and information. The aim of mea-surement, analysis, review, and improvement is to guideyour organization’s process management toward theachievement of key organizational results and strate-gic objectives and to anticipate and respond to rapidor unexpected organizational or external changes.

Comments

� Alignment and integration are key concepts for suc-cessful implementation of your performance measure-ment system. They are viewed in terms of extent andeffectiveness of use to meet your performance assess-ment needs. Alignment and integration include howmeasures are aligned throughout your organization andhow they are integrated to yield organization-wide dataand information. Alignment and integration also includehow performance measurement requirements are de-ployed by your senior leaders to track work group andprocess-level performance on key measures targetedfor organization-wide significance or improvement.

� The use of comparative data and information is im-portant to all organizations. The major premises foruse are (1) your organization needs to know where itstands relative to competitors and to best practices,


• relationships among personal and organiza-tional learning and value added per employee

• financial benefits derived from improvementsin workforce safety, absenteeism, and turn-over

• benefits and costs associated with educationand training, including e-learning and other dis-tance learning opportunities

• benefits and costs associated with improvedorganizational knowledge management andsharing

• the relationship between knowledge manage-ment and innovation

• how the ability to identify and meet workforcecapability and capacity needs correlates withretention, motivation, and productivity

• cost and revenue implications of workforce-related problems and effective problem reso-lution

• individual or aggregate measures of produc-tivity and quality relative to competitors’ per-formance

• cost trends relative to competitors’ trends

• relationships among product and service qual-ity, operational performance indicators, andoverall financial performance trends as re-flected in indicators such as operating costs,revenues, asset utilization, and value addedper employee

• allocation of resources among alternative im-provement projects based on cost/benefit im-plications or environmental and communityimpact

• net earnings or savings derived from quality,operational, and workforce performance im-provements

• comparisons among business units showinghow quality and operational performance im-provement affect financial performance

• contributions of improvement activities to cashflow, working capital use, and shareholdervalue

• profit impacts of customer retention

• cost and revenue implications of new marketentry, including global market expansion

• market share versus profits

• trends in economic, market, and stakeholderindicators of value and the impact of thesetrends on organizational sustainability

� Individual facts and data do not usually provide aneffective basis for setting organizational priorities. ThisItem emphasizes that close alignment is needed be-tween your analysis and your organizational perfor-mance review and between your analysis and your or-ganizational planning. This ensures that analysis isrelevant to decision making and that decision makingis based on relevant data and information.

� Action depends on understanding cause-effect con-nections among processes and between processesand results or outcomes. Process actions and theirresults may have many resource implications. Orga-nizations have a critical need to provide an effectiveanalytical basis for decisions, because resources forimprovement are limited and cause-effect connectionsoften are unclear.

4.2 Management of Information, Information Tech-nology, and Knowledge: How do you manage yourinformation, information technology, and organi-zational knowledge?

Purpose

This Item examines how your organization ensuresthe quality and availability of needed data, informa-tion, software, and hardware for your workforce, sup-pliers and partners, collaborators, and customers. Italso examines how your organization builds and man-ages its knowledge assets. The aim is to improve or-ganizational efficiency and effectiveness and to stimu-late innovation.

Comments

� Managing information can require a significant com-mitment of resources as the sources of data and infor-mation grow dramatically. The continued growth of elec-tronic information within organizations’ operations—as part of organizational knowledge networks, from theInternet, and in business-to-business, organization-to-organization, and business-to-consumer communica-tions—challenges organizational abilities to ensurereliability and availability in a user-friendly format.

� Data and information are especially important inbusiness or organization networks, partnerships, andsupply chains. Your responses to this Item should takeinto account this use of data and information and shouldrecognize the need for rapid data validation and reli-ability assurance, given the increasing use of elec-tronic data transfer.

� Organizations should carefully plan how they willcontinue to provide an information technology infrastruc-ture, data, and information in the event of either a naturalor manmade disaster. These plans should considerthe needs of all of the organization’s stakeholders, in-cluding the workforce, customers, suppliers, partners,and collaborators. The plans also should be coordi-nated with the organization’s overall plan for businesscontinuity (Item 6.1).

� The focus of an organization’s knowledge manage-ment is on the knowledge that people need to do theirwork; improve processes, products, and services; keepcurrent with changing business needs and directions;and develop innovative solutions that add value for thecustomer and the organization.

Workforce Focus (Category 5)

Workforce Focus addresses key workforce practices—those directed toward creating and maintaining a high-performance workplace and toward engaging yourworkforce to enable it and your organization to adaptto change and to succeed. The Category coversworkforce engagement, development, and managementin an integrated way (i.e., aligned with yourorganization’s strategic objectives and action plans).Your workforce focus includes your capability and ca-pacity needs and your workforce support climate. Toreinforce the basic alignment of workforce manage-ment with overall strategy, the Criteria also cover hu-man resource planning as part of overall planning inthe Strategic Planning Category (Category 2).

5.1 Workforce Engagement: How do you engageyour workforce to achieve organizational and per-sonal success?

Purpose

This Item examines your organization’s systems forengaging, developing, and assessing the engagementof your workforce, with the aim of enabling and en-couraging all members of your workforce to contributeeffectively and to the best of their ability. These sys-tems are intended to foster high performance, to ad-dress your core competencies, and to contribute tothe accomplishment of your action plans and to orga-nizational sustainability.

Comments

� High-performance work is characterized by flexibil-ity, innovation, knowledge and skill sharing, good com-munication and information flow, alignment with orga-nizational objectives, customer focus, and rapid re-sponse to changing business needs and requirementsof the marketplace. The focus of this Item is on aworkforce capable of achieving high performance.

� Many studies have shown that high levels ofworkforce engagement have a significant, positive im-pact on organizational performance. Research has in-dicated that engagement is characterized by perform-ing meaningful work; having organizational direction,performance accountability, and an efficient work envi-ronment; and having a safe, trusting, and cooperativeenvironment. In many nonprofit organizations, employ-ees and volunteers are drawn to and derive meaningfrom their work, because the work is aligned with theirpersonal values.

� Factors inhibiting motivation should be understoodand addressed by your organization. Further under-standing of these factors could be developed throughworkforce surveys or exit interviews with departingmembers of your workforce.

� Compensation and recognition systems should bematched to your work systems. To be effective, com-pensation and recognition might be tied to demon-strated skills and to peer evaluations.

� Compensation and recognition approaches alsomight include profit sharing, rewards for exemplary teamor unit performance, and linkage to customer satisfac-tion and loyalty measures, achievement of organiza-tional strategic objectives, or other key organizationalobjectives.

� Although satisfaction with pay and satisfaction withpromotion are important, these two factors generallyare not sufficient to ensure workforce engagement andhigh performance. Some examples of other factors toconsider are effective problem and grievance resolu-tion; development and career opportunities; work envi-ronment and management support; workplace safetyand security; workload; effective communication, co-operation, and teamwork; job security; appreciation ofthe differing needs of diverse employee groups; andorganizational support for serving customers.

� In addition to direct measures of workforce satisfac-tion through formal or informal surveys, some other in-dicators include absenteeism, turnover, grievances, andstrikes.


� Depending on the nature of your organization’s work,workforce responsibilities, and the stage of organiza-tional and personal development, workforce develop-ment needs might vary greatly. These needs mightinclude gaining skills for knowledge sharing, commu-nication, teamwork, and problem solving; interpretingand using data; meeting customer requirements; ac-complishing process analysis and simplification; re-ducing waste and cycle time; working with and moti-vating volunteers; and setting priorities based on stra-tegic alignment or cost/benefit analysis. Educationneeds also might include advanced skills in new tech-nologies or basic skills, such as reading, writing, lan-guage, arithmetic, and computer skills.

� Education and training delivery might occur insideor outside your organization and could involve on-the-job, classroom, computer-based, or distance learning,as well as other types of delivery. Training also mightoccur through developmental assignments within oroutside your organization.

� When you evaluate the effectiveness of workforceand leader development and learning systems, mea-sures might address the impact on individual, unit, andorganizational performance; the impact on customer-related performance; and a cost/benefit analysis.

� Although this Item does not specifically ask youabout training for customer contact employees, suchtraining is important and common. It frequently includeslearning critical knowledge and skills in the followingareas: your products, services, and customers; howto listen to customers; how to recover from problemsor failures; and how to effectively manage or meet cus-tomer expectations or needs.

� An organization’s knowledge management systemshould provide the mechanism for sharing the knowl-edge of employees and the organization to ensure thathighperformance work is maintained through transi-tions. Each organization should determine what knowl-edge is critical for its operations and should then imple-ment systematic processes for sharing this informa-tion. This is particularly important for implicit knowl-edge (i.e., knowledge personally retained by membersof the workforce).

� To help people realize their full potential, many or-ganizations use individual development plans preparedwith each person that address his or her career andlearning objectives.

5.2 Workforce Environment: How do you build aneffective and supportive workforce environment?

Purpose

This Item examines your organization’s workforce en-vironment, your workforce capability and capacityneeds, how you meet those needs to accomplish thework of your organization, and how you ensure a safeand supportive work climate. The aim is to build aneffective environment for accomplishing your work andfor supporting your workforce.

Comments

� Most organizations, regardless of size, have manyopportunities to support their workforce. Some ex-amples of services, facilities, activities, and other op-portunities are personal and career counseling, careerdevelopment and employability services, recreationalor cultural activities, formal and informal recognition,nonwork-related education, day care, special leave forfamily responsibilities and community service, flexiblework hours and benefits packages, outplacement ser-vices, and retiree benefits, including extended healthcare and ongoing access to services.

� All organizations, regardless of size, are required tomeet minimum regulatory standards for workplacesafety; however, high-performing organizations haveprocesses in place to ensure that they not only meetthese minimum standards but go beyond a compli-ance orientation. This includes designing proactiveprocesses, with input from people directly involved inthe work, to ensure a safe working environment.

Process Management (Category 6)

Process Management is the focal point within the Cri-teria for your key work systems and work processes.Built into the Category are the central requirementsfor identification and management of your core com-petencies to achieve efficient and effective work pro-cess management: effective design; a prevention ori-entation; linkage to customers, suppliers, partners,and collaborators and a focus on value creation for allkey stakeholders; operational performance; cycle time;emergency readiness; and evaluation, continuous im-provement, and organizational learning.



Agility, cost reduction, and cycle time reduction areincreasingly important in all aspects of process man-agement and organizational design. In the simplestterms, “agility” refers to your ability to adapt quickly,flexibly, and effectively to changing requirements. De-pending on the nature of your organization’s strategyand markets, agility might mean rapid change fromone product to another, rapid response to changingdemands, or the ability to produce a wide range ofcustomized services. Agility also increasingly involvesdecisions to outsource, agreements with key suppli-ers, and novel partnering arrangements. Flexibilitymight demand special strategies, such as implement-ing modular designs, sharing components, sharingmanufacturing lines, or providing specialized training.Cost and cycle time reduction often involve Lean pro-cess management strategies. It is crucial to utilizekey measures for tracking all aspects of your overallprocess management.

6.1 Work Systems Design: How do you design yourwork systems?

Purpose

This Item examines your organization’s core compe-tencies, work systems, and design of work processes,with the aim of creating value for your customers, pre-paring for potential emergencies, and achieving orga-nizational success and sustainability.

Comments

� This Item calls for information on your key work pro-cesses. The information required includes a descrip-tion of the key work processes and their specific re-quirements. Increasingly, these requirements mightinclude the need for agility—speed and flexibility—toadapt to change.

� Your design approaches could differ appreciablydepending on the nature of your products and ser-vices—whether the products and services are entirelynew, are variants, or involve major or minor processchanges. You should consider the key requirementsfor your products and services. Factors that might needto be considered in design include safety, long-termperformance, environmental impact, “green” manufac-turing, measurement capability, process capability,manufacturability, maintainability, variability in customerexpectations requiring product or service options, sup-plier capability, and documentation. Effective designalso must consider the cycle time and productivity ofproduction and delivery processes. This might involvedetailed mapping of manufacturing or service processesand the redesign (“re-engineering”) of those processesto achieve efficiency, as well as to meet changing cus-

tomer requirements.

� Your key work processes include those nonproductand nonservice business processes that are consid-ered important to organizational success and growthby your senior leaders. These processes frequentlyrelate to an organization’s core competencies, strate-gic objectives, and critical success factors. Key busi-ness processes might include processes for innova-tion, research and development, technology acquisi-tion, information and knowledge management, supplychain management, supplier partnering, outsourcing,mergers and acquisitions, global expansion, projectmanagement, and sales and marketing. For somenonprofit organizations, key business processes mightinclude fundraising, media relations, and public policyadvocacy. Given the diverse nature of these processes,the requirements and performance characteristicsmight vary significantly for different processes.

� Your key work processes include those support pro-cesses that support your daily operations and yourproduct and service delivery but are not usually de-signed in detail with the products and services. Thesupport process requirements usually do not dependsignificantly on product and service characteristics.Support process design requirements usually dependsignificantly on your internal requirements, and theymust be coordinated and integrated to ensure efficientand effective linkage and performance. Support pro-cesses might include processes for finance and ac-counting, facilities management, legal services, hu-man resource services, public relations, and otheradministrative services.

� For many organizations, supply chain managementis a growing factor in achieving productivity and profit-ability goals and overall organizational success. Sup-pliers, partners, and collaborators are receiving increas-ing strategic attention as organizations re-evaluate theircore competencies. Supplier processes should fulfilltwo purposes: to help improve the performance of sup-pliers and partners and, on specific actions, to helpthem contribute to your organization’s improved worksystems. Supply chain management might includeprocesses for supplier selection, with the aim of re-ducing the total number of suppliers and increasingpreferred supplier and partnering agreements.

� Many organizations need to consider requirementsfor suppliers, partners, and collaborators at the worksystem and work process design stage. Overall, ef-fective design must take into account all stakeholdersin the value chain. If many design projects are carriedout in parallel or if your organization’s products utilizeparts, equipment, and facilities that are used for otherproducts, coordination of resources might be a majorconcern, but it also might offer a means to significantlyreduce unit costs and time to market.

� This Item calls for information on the incorporationof new technology. This could include e-technology forsharing information with suppliers, partners, and col-laborators; communicating with customers; and giv-ing them continuous (24/7) access and automated in-formation transfer from in-service products requiringmaintenance in the field.

� Efforts to ensure the continuity of operations in anemergency should consider all facets of yourorganization’s operations that are needed to provideproducts or services to customers. You should con-sider all your key work processes in your planning.The specific level of service that you will need to pro-vide will be guided by your organization’s mission andyour customers’ needs and requirements. For example,a public utility is likely to have a higher need for ser-vices than organizations that do not provide an essen-tial function. Nonprofit organizations whose mission isto respond to emergencies will have a high need forservice readiness. Your continuity of operations effortsalso should be coordinated with your efforts to ensuredata and information availability (Item 4.2).

6.2 Work Process Management and Improvement:How do you manage and improve your key orga-nizational work processes?

Purpose

This Item examines the implementation, management,and improvement of your key work processes, withthe aim of creating value for your customers and achiev-ing organizational success and sustainability.

Comments

� Specific reference is made to in-process measure-ments and customer and supplier interactions. Thesemeasurements and interactions require the identifica-tion of critical points in processes for measurement,observation, or interaction. These activities shouldoccur at the earliest points possible in processes tominimize problems and costs that may result fromdeviations from expected performance. Achieving ex-pected performance frequently requires setting in-pro-cess performance levels or standards to guide deci-sion making. When deviations occur, corrective actionis required to restore the performance of the processto its design specifications. Depending on the natureof the process, the corrective action could involve tech-nical and human considerations. Proper correctiveaction involves changes at the source (root cause) ofthe deviation. Such corrective action should minimizethe likelihood of this type of variation occurring againor elsewhere in your organization. When customer in-teractions are involved, differences among customers

When customer interactions are involved, differencesamong customers must be considered in evaluatinghow well the process is performing. This might entailallowing for specific or general contingencies, depend-ing on the customer information gathered. This is es-pecially true of professional and personal services. Keyprocess cycle times in some organizations may be ayear or longer, which may create special challengesin measuring day-to-day progress and identifying op-portunities for reducing cycle times, when appropri-ate.

� This Item also calls for information on how processesare improved to achieve better performance. Betterperformance means not only better quality from yourcustomers’ perspectives but also better financial andoperational performance—such as productivity—fromyour other stakeholders’ perspectives. A variety of pro-cess improvement approaches are commonly used.These approaches include (1) sharing successful strat-egies across your organization to drive learning andinnovation, (2) performing process analysis and re-search (e.g., process mapping, optimization experi-ments, error proofing), (3) conducting technical andbusiness research and development, (4) benchmarking,(5) using alternative technology, and (6) using informa-tion from customers of the processes —within andoutside your organization. Process improvement ap-proaches might utilize financial data to evaluate alter-natives and set priorities. Together, these approachesoffer a wide range of possibilities, including a com-plete redesign (“re-engineering”) of processes.


Results (Category 7)

The Results Category provides a results focus thatencompasses your objective evaluation and your cus-tomers’ evaluation of your organization’s products andservices, your overall financial and market performance,your workforce results, your leadership system andsocial responsibility results, and results of all key pro-cesses and process improvement activities. Throughthis focus, the Criteria’s purposes—superior value ofofferings as viewed by your customers and the mar-ketplace; superior organizational performance as re-flected in your operational, workforce, legal, ethical,and financial indicators; and organizational and per-sonal learning —are maintained. Category 7 thus pro-vides “real-time” information (measures of progress)for evaluation and improvement of processes, products,and services, in alignment with your overall organiza-tional strategy. Item 4.1 calls for analysis and reviewof results data and information to determine your over-all organizational performance and to set priorities forimprovement.

7.1 Product and Service Outcomes: What are yourproduct and service performance results?

Purpose

This Item examines your organization’s key productand service outcomes, with the aim of delivering prod-uct and service quality and value that lead to customersatisfaction, customer loyalty, and positive referrals.

Comments

� This Item places emphasis on measures of productand service performance that serve as indicators ofcustomers’ views and decisions relative to future inter-actions and relationships. These measures of productand service performance are derived from customer-related information gathered in Items 3.1 and 3.2.

� Product and service measures appropriate for inclu-sion might be based on the following: internal qualitymeasurements, field performance of products, defectlevels, service errors, response times, and data col-lected from your customers by other organizations onease of use or other attributes, as well as customersurveys on product and service performance.

� The correlation between product and service perfor-mance and customer indicators is a critical manage-ment tool with multiple uses: (1) defining and focusingon key quality and customer requirements; (2) identi-fying product and service differentiators in the market-place; and (3) determining cause-effect relationshipsbetween your product and service attributes and

evidence of customer satisfaction and loyalty, as wellas positive referrals. The correlation might reveal emerg-ing or changing market segments, the changing im-portance of requirements, or even the potential obso-lescence of product or service offerings.

7.2 Customer-Focused Outcomes: What are yourcustomerfocused performance results?

Purpose

This Item examines your organization’s customer-fo-cused performance results, with the aim of demon-strating how well your organization has been satisfy-ing your customers and has developed loyalty, repeatbusiness, and positive referrals, as appropriate.

Comments

� This Item focuses on all relevant data to determineand help predict your organization’s performance asviewed by your customers. Relevant data and informa-tion include customer satisfaction and dissatisfaction;retention, gains, and losses of customers and cus-tomer accounts; customer complaints, complaintmanagement, effective complaint resolution, and war-ranty claims; customer-perceived value based on qual-ity and price; customer assessment of access andease of use (including courtesy in service interactions);and awards, ratings, and recognition from customersand independent rating organizations.

� This Item places an emphasis on customer-focusedresults that go beyond satisfaction measurements,because loyalty, repeat business, and longer-termcustomer relationships are better indicators and mea-sures of future success in the marketplace and of or-ganizational sustainability.

7.3 Financial and Market Outcomes: What are yourfinancial and marketplace performance results?

Purpose

This Item examines your organization’s key financialand market results, with the aim of understanding yourfinancial sustainability and your marketplace challengesand opportunities.

Comments

� Measures reported in this Item are those usuallytracked by senior leadership on an ongoing basis toassess your organization’s financial performance andviability.


In addition to the measures included in Item 7.3, Note1, appropriate financial measures and indicators mightinclude revenues, budgets, profits or losses, cash po-sition, net assets, debt leverage, cash-to-cash cycletime, earnings per share, financial operations efficiency(collections, billing, receivables), and financial returns.Marketplace performance measures might includemeasures of business growth; charitable donations andgrants received; new products, programs, or servicesand markets entered (including e-markets and exports);or the percentage of revenues derived from new prod-ucts, programs, or services.

7.4 Workforce-Focused Outcomes: What are yourworkforce-focused performance results?

Purpose

This Item examines your organization’s workforce-fo-cused performance results, with the aim of demon-strating how well your organization has been creatingand maintaining a productive, engaging, and caring workenvironment for all members of your workforce.

Comments

� Results measures reported for indicators of workforceengagement and satisfaction might include improve-ment in local decision making, organizational culture,and workforce or leader development. Input data, suchas the extent of training, might be included, but themain emphasis should be on data that show effective-ness or outcomes. An example of such an outcomemeasure might be increased workforce retention re-sulting from establishing a peer recognition programor the number of promotions that have resulted fromthe organization’s leadership development program.

� Results reported might include generic ororganizationspecific factors. Generic factors might in-clude safety, absenteeism, turnover, satisfaction, andcomplaints (grievances). For some measures, suchas absenteeism and turnover, local or regional com-parisons might be appropriate. Organization-specificfactors are those you assess for determining yourworkforce engagement and climate. These factorsmight include the extent of training, retraining, or cross-training to meet capability and capacity needs; theextent and success of self-direction; the extent of union-management partnering; or the extent of volunteerinvolvement in process and program activities.

7.5 Process Effectiveness Outcomes: What are yourprocess effectiveness results?

Purpose

This Item examines your organization’s other key op-erational performance results not reported in Items 7.1–7.4, with the aim of achieving work system and workprocess effectiveness and efficiency.

Comments

� This Item encourages your organization to developand include unique and innovative measures to trackkey processes and operational improvement. All keyareas of organizational and operational performance,including your organization’s readiness for emergen-cies, should be evaluated by measures that are rel-evant and important to your organization.

� Measures and indicators of process effectivenessand efficiency might include work system performancethat demonstrates improved cost savings or higherproductivity by using internal and/or external resources;reduced emission levels, waste stream reductions, by-product use, and recycling; internal responsivenessindicators, such as cycle times, production flexibility,lead times, set-up times, and time to market; and im-proved performance of administrative and other sup-port functions. They also might include business-spe-cific indicators, such as innovation rates and increaseduse of product and process yields, Six Sigma initia-tive results, and acceptable product performance atthe time of delivery; supply chain indicators, such asreductions in inventory and incoming inspections, in-creases in quality and productivity, improvements inelectronic data exchange, and reductions in supplychain management costs; and third-party assessmentresults, such as ISO 9001 audits.

7.6 Leadership Outcomes: What are your leader-ship results?

Purpose

This Item examines your organization’s key results inthe areas of leadership and governance, strategic planaccomplishment, and societal responsibilities, with theaim of maintaining a fiscally sound, ethical organiza-tion that is a good citizen in its communities.


Comments

� Because many organizations have difficulty deter-mining appropriate measures, measuring progress inaccomplishing their strategic objectives is a key chal-lenge. Frequently, these progress measures can bediscerned by first defining the results that would indi-cate end-goal success in achieving the strategic ob-jective and then using that end-goal to define interme-diate measures.

� Independent of an increased national focus on is-sues of governance, ethics, and leadership account-ability, it is important for organizations to practice anddemonstrate high standards of overall conduct. Gover-nance bodies and senior leaders should track relevantperformance measures on a regular basis and empha-size this performance in stakeholder communications.

� Results reported should include environmental, le-gal, and regulatory compliance; results of oversightaudits by government or funding agencies; and note-worthy achievements in these areas, as appropriate.Results also should include indicators of support forkey communities and other public purposes.

� If your organization has received sanctions or ad-verse actions under law, regulation, or contract duringthe past three years, the incidents and their currentstatus should be summarized.


The scoring of responses to Criteria Items (Items) andAward applicant feedback are based on two evalua-tion dimensions: (1) Process and (2) Results. Criteriausers need to furnish information relating to these di-mensions. Specific factors for these dimensions aredescribed below. Scoring Guidelines are given onpages 71.

Process“Process” refers to the methods your organizationuses and improves to address the Item requirementsin Categories 1-6. the four factors used to evaluateprocess are Approach, Deployment, Learning, andIntegration (A-D-L-I).

“Approach” refers to

• the methods used to accomplish the process

• the appropriateness of the methods to the Item requirements

• the effectiveness of your use of the methods

• the degree to which the approach is repeatable and based on reliable data and information (i.e., systematic)

“Deployment” refers to the extent to which

• your approach is applied in addressing Itemrequirements relevant and important to yourorganization

• your approach is applied consistently

• your approach is used by all appropriate workunits

“Learning” refers to

• refining your approach through cycles ofevaluation and improvement

• encouraging breakthrough change to yourapproach through innovation

Scoring System

• sharing refinements and innovations with otherrelevant work units and processes in yourorganization.

“Integration” refers to the extent to which

• your approach is aligned with yourorganizational needs identified in theOrganizational Profile and other ProcessItems

• your measures, information, and improvementsystems are complementary acrossprocesses and work units

• your plans, processes, results analyses,learning, and actions are harmonized acrossprocesses and work units and work units tosupport organization-wide goals

Results

“RESULTS” refers to your organization’s outputs andoutcomes in achieving the PURPOSES given in Items 7.1-7.6. The four factors used to evaluate results are

• your current LEVEL OF PERFORMANCE

• the rate (i.e., the slope of trend data) andbreadth (i.e., the extent of deployment) of yourPERFORMANCE improvements

• your PERFORMANCE relative to appropriate com-parisons and/or BENCHMARKS

• linkage of your RESULTS MEASURES (often throughsegmentation) to important CUSTOMER, productand service, market, PROCESS, and ACTION PLAN

PERFORMANCE requirements identified in yourOrganizational Profile and in PROCESS Items.


Process Process

Results


Item Classification and Scoring Dimensions

Items are classified according to the kinds of informa-tion and/or data you are expected to furnish relative tothe two evaluation dimensions given above.

The two types of Items are designated as:

1. PROCESS

2. RESULTS

In Process Items, Approach, Deployment, Learning,and Integration are linked to emphasize that descrip-tions of approach should always indicate the deploy-ment—consistent with the specific requirements of theItem. As processes mature, their description alsoshould indicate how cycles of learning, as well as in-tegration with other processes and work units, occur.Although the ADLI factors are linked, feedback toAward applicants reflects strengths and opportunitiesfor improvement in any or all of these factors.

Results Items call for data showing performance lev-els, improvement rates, and relevant comparative datafor key measures and indicators of organizational per-formance. Results Items also call for data on breadthof performance improvements. This is directly relatedto deployment and organizational learning; if improve-ment processes are widely shared and deployed, thereshould be corresponding results. A score for a Re-sults Item is thus a composite based on overall perfor-mance, taking into account the rate and breadth ofimprovements and their importance to the Item require-ments and your business or mission.

“Importance” as a Scoring Consideration

The two evaluation dimensions described previouslyare central to evaluation and feedback. A critical con-sideration in evaluation and feedback is the importanceof your reported process and results to your key busi-ness factors. The areas of greatest importance shouldbe identified in your Organizational Profile and in Itemssuch as 2.1, 2.2, 3.1, 5.1, 5.2, and 6.1. Your key cus-tomer requirements, competitive environment,workforce needs, key strategic objectives, and actionplans are particularly important.

Assignment of Scores to Your Responses

The following guidelines should be observed in assign-ing scores to Item responses.

� All Areas to Address should be included in the Itemresponse. Also, responses should reflect what is im� In assigning a score to an Item, first decide which

scoring range (e.g., 50 percent to 65 percent) is mostdescriptive of the organization’s achievement level aspresented in the Item response. “Most descriptive ofthe organization’s achievement level” can include somegaps in one or more of the ADLI (process) factors orthe results factors for the chosen scoring range. Anorganization’s achievement level is based on a holis-tic view of either the four results factors in aggregateand not on a tallying or averaging of independent as-sessments against each of the four factors. Assign-ing the actual score within the chosen range requiresevaluating whether the Item response is closer to thestatements in the next higher or next lower scoringrange.

� A Process Item score of 50 percent represents anapproach that meets the overall requirements of theItem, that is deployed consistently and to most workunits covered by the Item, that has been through somecycles of improvement and learning, and that addressesthe key organizational needs. Higher scores reflectgreater achievement, demonstrated by broader deploy-ment, significant organizational learning, and increasedintegration.

� A Results Item score of 50 percent represents aclear indication of improvement trends and/or good lev-els of performance with appropriate comparative datain the results areas covered in the Item and importantto the organization’s business or mission. Higherscores reflect better improvement rates and/or levelsof performance, stronger comparative performance, andbroader coverage and integration with the requirementsof the business or mission.

Scoring GuidelinesFor Use With Categories 1-6

30%, 35%, 40%, or 45%

50%, 55%, 60%, or 65%

70%, 75%,80%, or 85%

• No SYSTEMATIC APPROACH is evident; information is ANECDOTAL.(A)• Little or no DEPLOYMENT of an APPROACH is evident. (D)• An improvement orientation is not evident; improvement is achieved

through reacting to problems. (L)• No organizational ALIGNMENT is evident; individual areas or work units

operate independently. ( I )

• The beginning of a SYSTEMATIC APPROACH to the BASIC REQUIREMENTS of the Item isevident. (A)

• The APPROACH is in the early stages of DEPLOYMENT in most areas of work units,inhibiting progress in achieving the basic REQUIREMENTS of the Item. (D)

• Early stages of a transition from reacting to problems to a general improvement orientationare evident. (L)

• The APPROACH is ALIGNED with other areas or work units largely through joint problemsolving. (I)

• An EFFECTIVE, SYSTEMATIC APPROACH, responsive to the BASIC REQUIREMENTS of theItem, is evident. (A)

• The APPROACH is DEPLOYED, although some areas or work units are in early stages ofDEPLOYMENT. (D)

• The beginning of a SYSTEMATIC APPROACH to evaluation and improvement of KEY PRO-CESSES is evident. (L)

• The APPROACH is in early stages of ALIGNMENT with your basic organizational needsidentified in response to the other Criteria Categories.(I)

0% or 5%

10% , 15% 20% , or 25%

90%, 95%, or100%

SCORE PROCESS

• An EFFECTIVE, SYSTEMATIC APPROACH, responsive to the OVERALL REQUIREMENTSof the Item, is evident. (A)

• The APPROACH is well DEPLOYED, although DEPLOYMENT may vary in some areas orwork units. (D)

• A fact-based, SYSTEMATIC evaluation and improvement PROCESS and some o r g a n i -zational LEARNING are in place fro improving the efficiency and EFFECTIVENESS of KEYPROCESSES. (L)

• The APPROACH is ALIGNED with your organizational needs identified in response toother Criteria Categories. (I)

• An EFFECTIVE, SYSTEMATIC APPROACH, responsive to the MULTIPLE REQUIREMENTS ofthe Item, is evident.(A)

• The APPROACH is well DEPLOYED, with no significant gaps. (D)• A Fact-based SYSTEMATIC evaluation and improvement and organizational LEARNING

are KEY management tools; there is clear evidence of refinement and INNOVATION as aresult of organizational-level ANALYSIS and sharing. (L)

• The APPROACH is INTEGRATED with your organizational needs identified in response tothe other Criteria Items. (I)

• An EFFECTIVE, SYSTEMATIC APPROACH, fully responsive to the MULTIPLE REQUIRE-MENTS of the Item, is evident. (A)

• The APPROACH is fully DEPLOYED without significant weaknesses or gaps in any areasor work units. (D)

• Fact-based, SYSTEMATIC evaluation and improvement and organizational LEARNING areKEY organization-wide tools; refinement and INNOVATION, backed by ANALYSIS andsharing, are evident throughout the organization. (L)

• The APPROACH is well INTEGRATED with your organizational needs identified in re-sponse to the other Criteria Items. (I)


For Use With Category 7

SCORE RESULTS

There are no organizational PERFORMANCE RESULTS or poor RESULTS in areas reported. TREND data are either not reported or show mainly adverse TRENDS. Comparative information is not reported. RESULTS are not reported for any areas of importance to your organization’s KEY MISSION or business requirements.

0% or 5%

10%, 15% 20%, or 25%

30%, 35% 40%, or 45%

50%, 55% 60%, or 65%

70%, 75% 80%, or 85%

90%, 95%, or 100%

A few organizational PERFORMANCE RESULTS are reported; there are some improvements and/or early good PERFORMANCE LEVELS in a few areas. Little or no TREND data are reported. Little or no comparative information is reported. RESULTS are reported for many areas of importance to your organization’s KEY MISSION or business requirements.

Improvements and/or good PERFORMANCE LEVELS are reported in many areas addressed in the Item requirements. Early stages of developing TRENDS are evident. Early stages of obtaining comparative information are evident. RESULTS are reported for many areas of importance to your organization’s KEY MISSION or business requirements.

Improvement TRENDS and/or good PERFORMANCE LEVELS are reported for most addressed in the Item requirements. No pattern of adverse TRENDS and no poor PERFORMANCE LEVELS are evident in areas of importance to your organization’s KEY MISSION or business requirements. Some TRENDS and/or current PERFORMANCE LEVELS—evaluated against relevant comparisons and/or BENCHMARKS—show areas of good to very good relative PERFORMANCE. Organizational PERFORMANCE RESULTS address most KEY CUSTOMER, market, and PROCESS requirements.

Current PERFORMANCE is good to excellent in most areas of importance to the Item requirements.

Most improvement TRENDS and/or current PERFORMANCE LEVELS are sustained.

Many to most reported TRENDS and/or current PERFORMANCE LEVELS—evaluated against relevant comparisons and/or BENCHMARKS—show areas of leadership and very good relative PERFORMANCE.

Organizational PERFORMANCE RESULTS address most KEY CUSTOMER, market, PROCESS, and ACTION PLAN requirements.

Current PERFORMANCE is excellent in most areas of importance to the Item requirements.

Excellent improvement TRENDS and/or sustained excellent PERFORMANCE LEVELS are reported in most areas.Evidence of industry and BENCHMARK leadership is demonstrated in many areas. Organizational PERFORMANCE RESULTS fully addressed KEY CUSTOMER, market, PROCESS, and ACTION PLAN requirements.


Steps Toward a Mature Process ApproachAn Aid for Scoring Approach-Deployment Items

(1) Reacting to Problems

Strategicand

OperationalGoals

Operations are characterized by activitiesrather than b y processes, and they arelargely responsive to immediate needs orproblems.

(2) Early SystematicApproach

The organization is at the beginningstages of conducting operations byprocesses with repeatability, evaluationand improvements, and somecoordination among organizational units.

(3) Aligned Approach

Strategicand

OperationalGoals

Operations are characterized byprocesses that are repeatable andregularly evaluated for improvement, withlearning shared and with coordinationamong organizational units.

(4) Integrated Approach

Strategicand

OperationalGoals

Operations are characterized byprocesses that are repeatable and regularlyevaluated for change and improvement incollaboration with other affected units.Efficiencies across units are sought andachieved.

Strategicand

OperationalGoals


The guidelines given in this section are offered to as-sist Criteria users in responding most effectively tothe requirements of the 18 Criteria Items. For organi-zations writing an application for the PQA, respondinginvolves addressing these requirements in 50 or fewerpages.

The guidelines are presented in three parts:

1. General Guidelines regarding the Criteria book-let, including how the Items are formatted;

2. Guidelines for Responding to Process Items;and

3. Guidelines for Responding to Results Items.

General Guidelines

1. Read the entire Criteria booklet.

The main sections of the booklet provide anoverall orientation to the Criteria, including howresponses are to be evaluated for self-assess-ment or by PQA Assessors. You should be-come thoroughly familiar with the following sec-tions:

Criteria for Performance Excellence (pages 14-40)Scoring System pages (64-68)Glossary of Key Terms (pages 41-48)Category and Item Descriptions (pages 49-63)

2. Review the Item format and understandhow to respond to the Item requirements.

The Item format (see figure on page 70) showsthe different parts of Items, the role of each part,and where each part is placed. It is especiallyimportant to understand the Areas to Addressand the Item Notes. Each Item and Area to Ad-dress is described in greater detail in a sepa-rate section (pages 49-63).

Each Item is classified either Process or Re-sults, depending on the type of information re-quired. Guidelines for Responding to ProcessItems are given on pages 69-71. Guidelines forResponding to Results Items are given on pages71-72.

Item requirements are presented in questionformat. Some Areas to Address include mul-tiple questions. Responses to an Item shouldcontain answers to all questions; however, eachquestion need not be answered separately.Responses to multiple questions within a singleArea to Address may be grouped, as appropri-ate to your organization. These multiple ques-tions serve as a guide in understanding the fullmeaning of the information being requested.

3. Start by preparing the Organizational Pro-file

The Organizational Profile is the most appropri-ate starting point for initiating a self-assessmentor for writing an application. The OrganizationalProfile is intended to help everyone – includingorganizations using the Criteria for self-assess-ment, application writers, and reviewers – tounderstand what is most relevant and impor-tant to your organization's business and to itsperformance. The questions to address in re-sponding to the Organizational Profile are onpages 14-16.

Guidelines for Responding to Process Items

Although the Criteria focus on key organizational per-formance results, these results by themselves offerlittle diagnostic value. For example, if some resultsare poor or are improving at rates slower than yourcompetitors’or comparable organizations’, it is impor-tant to understand why this is so and what might bedone to accelerate improvement.

2008 Public Sector Criteria Response Guidelines


The purpose of Process Items is to permit diagnosisof your organization’s most important processes—theones that yield fast-paced organizational performanceimprovement and contribute to key outcomes or per-formance results. Diagnosis and feedback dependheavily on the content and completeness of your Itemresponses. For this reason, it is important to respondto these Items by providing your key process informa-tion. Guidelines for organizing and reviewing such in-formation follow.

1. Understand the meaning of “how.”

Process Items include questions that begin withthe word “how.” Responses should outline yourkey process information such as methods, mea-sures, deployment, and evaluation/improve-ment/learning factors. Responses lacking such

information, or merely providing an example, arereferred to in the Scoring Guidelines as "anec-dotal information."

2. Understand the meaning of "what."

Two types of questions in Process Items beginwith the word "what." The first type of questionrequests basic information on key processesand how they work. Although it is helpful toincude who performs the work, merely statingwho does not permit diagnosis or feedback. Thesecond type of question requests informationon what your key findings, plans, objectives,goals or measures are. These latter questionsset the context for showing alignment and inte-gration in your performance management sys-tem. For example, when you identify key stra-tegic objectives, your action plans, human re-source plans, some of your performance mea-sures, and some results are reported in Cat-egory 7 are expected to relate to the statedstartegic objectives.

Process2.2 Strategy Deployment (45 pts.)Describe how your organization converts its Strategic Objectives into Action Plans.

Summarize your organization's Action Plans and related Key Performance Measures orIndicators. Project your organization's future Performance on these Key PerformanceMeasures or Indicators.


a. Action Plan Development and Deployment

(1) How do you develop and deploy action plans to achieve your key strategicobjectives? How do you allocate resources to ensure accomplishment of youraction plans? How do you ensure that the key changes resulting from actionplans can be sustained?

(2) What are your key short - and longer-term action plans? What are the keychanges, if any, in your progams, offerings, and services, you anticipated orplanned student and stakeholder markets, and how you will operate?

(3) What are your key human resource plans that derive from your short- andlonger-term strategic objectives and action plans?

(4) What are your key performance measures or indicators for tracking progresson your action plans ? How do you ensure that your overall action planmeasurementsystem reinforces organizational alignment? How do you ensure that themeasurement system covers all key deployment areas, students, andstakeholders?

b. Performance Projection

For the key performance measures or indicators identified in 2.2a(4), what are yourperformance

projections for both your short- and longer- term planning time horizons? How does yourprojected performance compare with the projected performance of competitors and

comparableorganizations? How does it compare with key benchmarks, goals, and past performance, asappropriate?

N1. Strategy and action plan development and deployment are closely linked to other Items in theCriteria. Examples of key linkages are:

Item 1.1 for how your senior leaders set and communicate directions; Category 3 for gathering customer and markets knowledge as input to your strategy and action plans, and for deploying action plans; Category 4 for information and analysis to support your key information needs, to support your

development of strategy, to provide an effective basis for your performance measurements, and totrack

progress relative to your strategic objectives and action plans; Category 5 for your work system needs, employee education, training, and development needs, and related human resource factors resulting from action plans;

Category 6 for process requirements resulting from your action plans; and Item 7.5 for specific accomplishments relative to your organizational strategy and action plans.

N2. Measures and indicators of projected performance (2.2b) might include changes resulting from new business ventures, business acquisitions or mergers; new value creation; market entry and shifts; and significant anticipated innovations in products, services, and technology.

For additional description of this Item, see pages 44-45

Item Format

Basic I tem requirementsexpressed in item tide

Overall I temrequi rementsexpressed asspec i f i c top icsusers need toaddress

Areas to Address

Notes have thefo l lowing purposes:- clarify key terms and/or requirements- give instructions- indicate/clari fy important linkage

Locat ion of I temDescr ip t ion

Item Number I tem Ti t le Item Point Value Types of information users are expected to provide in response to this Item

Notes:

Mul ip lerequi rementsexpressed asind iv idua lCri ter ia quest ions


3. Write and review response(s) with the follow-ing guidelines and comments in mind.

� Show that approaches are systematic.

Systematic approaches are repeatable and use dataand information to enable learning. In other words,approaches are systematic if they build in the oppor-tunity for evaluation, improvement, innovation, andknowledge sharing, thereby permitting a gain in matu-rity.

� Show deployment.

Deployment information should summarize how yourapproaches are implemented in different parts of yourorganization. Deployment can be shown compactlyby using tables.

� Show evidence of learning.

Processes should include evaluation and improvementcycles, as well as the potential for breakthroughchange. Process improvements should be shared withother appropriate units of the organization to enableorganizational learning.

� Show integration.

Integration shows alignment and harmonization amongprocesses, plans, measures, and actions that gener-ate organizational effectiveness and efficiencies.

� Show focus and consistency.

There are four important considerations regarding fo-cus and consistency: (1) the Organizational Profileshould make clear what is important; (2) the StrategicPlanning Category, including the strategic objectivesand action plans, should highlight areas of greatestfocus and describe how deployment is accomplished;(3) descriptions of organizational-level analysis andreview (Item 4.1) should show how your organizationanalyzes and reviews performance information to setpriorities; and (4) Category 6, Process Management,should highlight core competencies and work pro-cesses that are key to your overall performance. Show-ing focus and consistency in the Process Items andtracking corresponding measures in the Results Itemsshould improve organizational performance.

� Respond fully to Item requirements.

Missing information will be interpreted as a gap in yourperformance management system. All Areas to Ad-dress should be addressed. Individual questions withinan Area to Address may be addressed individually or

together.

4. Cross-reference when appropriate.

As much as possible, each Item response should beselfcontained. However, responses to different Itemsalso should be mutually reinforcing. It is then appropri-ate to refer to the other responses rather than repeatinformation. In such cases, key process informationshould be given in the Item requesting this informa-tion. For example, employee development and learn-ing systems should be described in Item 5.1. Discus-sions about employee development and learning else-where in your application would then reference but notrepeat details given in your Item 5.1 response.

5. Use a compact format.

Applicants should make the best use of the 50 appli-cation pages permitted. Applicants are encouraged touse flowcharts, tables, and “bullets” to present infor-mation concisely.

6. Refer to the Scoring Guidelines.

Considerations in the evaluation of Process Item re-sponses include the Criteria Item requirements andthe maturity of your approaches, breadth of deploy-ment, extent of learning, and integration with other el-ements of your performance management system, asdescribed in the Scoring Guidelines (page 66). There-fore, you need to consider both the Criteria and theScoring Guidelines.

Guidelines for Responding to Results Items

The Criteria place a major emphasis on results. Thefollowing information, guidelines, and example relateto effective and complete reporting of results.

1. Focus on the most critical organizational per-formance results.

Results reported should cover the most important re-quirements for your organization’s success, highlightedin your Organizational Profile and in the Strategic Plan-ning, Customer and Market Focus, and Process Man-agement Categories.

2. Note the meaning of the four key requirementsfrom the Scoring Guidelines for effective report-ing of results data:

� performance levels that are reported on a meaning-ful measurement scale� trends to show directions of results and rates ofchange


Figure 7-2-3 On-Time DeliveryPerformance1 0 0

95

90

85

80

75

2006 “world-class” levelfrom another industry

with similar activity

2002 2003 2004 2005 2006

Product Line A

OverallCompany

Best Competitor

Product Line C

2006IndustryAverage

Y e a r

On-

Tim

e D

eliv

ery

(%)

Product Line B

� comparisons to show how results compare withthose of other, appropriately selected organizations� breadth and importance of results to show that allimportant results are included and segmented (e.g.,by important customer, workforce, process, and prod-uct line groups)

3. Include trend data covering actual periods fortracking trends.

No minimum period of time is specified for trend data.Trends might span five years or more for some results.Trends should represent historic and current perfor-mance and not rely on projected (future) performance.Time intervals between data points should be mean-ingful for the specific measure(s) reported. For impor-tant results, new data should be included even if trendsand comparisons are not yet well established.

4. Use a compact format—graphs and tables.

Many results can be reported compactly by usinggraphs and tables. Graphs and tables should be la-beled for easy interpretation. Results over time or com-pared with others should be “normalized” (i.e., pre-sented in a way, such as using ratios, that takes intoaccount size factors). For example, reporting safetytrends in terms of lost work days per 100 employeeswould be more meaningful than total lost work days ifthe number of employees has varied over the time pe-riod or if you are comparing your results to organiza-tions differing in size.

5. Integrate results into the body of the text.

Discussion of results and the results themselves shouldbe close together in an Award application. Trends thatshow a significant positive or negative change shouldbe explained. Use figure numbers that correspond toItems. For example, the third figure for Item 7.1 wouldbe Figure 7.1-3. The graph illustrates data an organi-zation might present as part of a response to Item 7.1,Product and Service Outcomes. In the OrganizationalProfile, the organization has indicated on-time deliv-ery as a key customer requirement.

The graph illustrates a number of characteristics ofclear and effective results reporting.� A figure number is provided for reference to the graphin the text.� Both axes and units of measure are clearly labeled.� Trend lines report data for a key customer require-ment—on-time delivery.� Results are presented for several years.� An arrow indicates that an upward trend is good forthis measure.� Appropriate comparisons are shown clearly.� The organization shows, using a single graph, thatits three product lines are separately tracked for ontimedelivery.

To help interpret the Scoring Guidelines (page 67), thefollowing comments on the graphed results would beappropriate:� The current overall organizational performance levelis excellent. This conclusion is supported by the com-parison with industry competitors and with a “world-class” level.� The organization shows excellent improvementtrends.� Product Line A is the current performance leader—showing sustained high performance (on-timedelivery) and a slightly positive trend. Product LineB shows rapid improvement. Its delivery schedule isnear that of the best industry competitor but trailsthe “world-class” level.� Product Line C—identified in the application as anew product—is having early problems with ontimedelivery. (The organization should briefly explain theseproblems.)

6. Refer to the Scoring Guideline

Considerations in the evaluation of Results Itemresponses include the Criteria Item requirements andthe significance of the results trends, actual performancelevels, relevant comparative data, alignment withimportant elements of your performance managementsystem, and strength of the improvement process relativeto the Scoring Guidelines (page 67).


Summary of Eligibility Categories and Restrictions

Private corporations and public sector agencies/organiza-tions are eligible to apply for the PQA. Private corporationsapplying for the Award must be registered, must have amajor business operation located in the Philippines whichcan be assessed by a panel of quality professionals, andmust have been in existence for three years or more at thetime of application. All subordinate elements of theapplicant’s organization must be included in the applica-tion. Charitable, trade, professional, fraternal, sports orga-nizations and institutions are not eligible.

Eligible public sector organizations include national lineagencies, government-owned or controlled corporations, gov-ernment financial institutions, and local government units.

Eligibility Categories

Private Sector

1. Small and Medium Enterprises

Enterprises defined under the Magna Carta for Smalland Medium Scale Enterprises as businesses engagedin manufacturing, services, agriculture, and other in-dustries with not more than 200 full time employeesand not more than P100 million capitalization.

2. Large Enterprises

Manufacturing Companies or their Subsidiaries

Companies or sub-units that produce and sell manufactured products or manufacturing processes, and pro-ducers of mining, or construction products.

Service Companies

Companies or subunits that sell services. Proper clas-sification of companies that perform both manufactur-ing and service is determined by the larger percentageof sales.


Agriculture

Companies or subunits that produce agricultural prod-ucts.

Other Industries

Public Sector

1. Departments, Bureaus, and Attached Agencies

Any department, bureau, office, commission, court,tribunal, council, authority, administration, center, in-stitute, state university, and any establishment andinstrumentality of the National Government. (Source:Glossary of Terms for State Auditors,1983).

2. Government-Owned and/or Controlled Corporat ionsand Government Financial Institutions

Those performing proprietary functions which are es-tablished solely for business or profit or gain and ac-cordingly excluding those created, maintained or ac-quired in pursuance of a policy of the state, enunciatedin the Constitution or by law, and those whose officersand employees are covered by the Civil Service.(Source: Supplemental Rules Implementing RA 6971).

3. State Universities and Colleges

4. Local Government Units

Territorial and political subdivisions of State organizedas public or municipal corporations performing govern-mental and corporate functions. (Source: Local Gov-ernment Code).

5. Other Government Agencies

The applicant must have been in existence for at leastthree years at the time of application.

Eligibility Restrictions

The following are the eligibility rules and restrictions:

- Recipients of Recognition levels are eligible to reapplyafter two years.

Other Requirements for all Applicants

- Must comply with relevant statutory and regulatory requirements;

- Must have employee(s) trained in PQA application development

- Must have conducted an internal assessment based on the relevant PQA Criteria. Results of internal assessment should be presented to the Award Administrator when applying for eligibility.

Charitable, trade and industry, fraternal and sports organizations/associations and institutions are not eligible.

An application is eligible only if it is self-sufficient to beexamined in all seven criteria categories and can be inspectedin the Philippines. If an applicant has some activitiesperformed outside the applicant’s immediate organization(e.g. by a parent organization or its other subsidiaries, oroverseas components of the applicant), it must ensure that:

- In the event of site visit, the appropriate people andmaterials will be available for examination in thePhilippines to document its operational practices in allmajor business functions, and

- In the event the applicant becomes a recipientof the PQA Recognition or Award, it must share itspractices in a PQA Conference and the benchmarkingnetwork, as well as open its facilities for visits.

Subsidiaries

In the Manufacturing and Service categories, subsidiaries ofa company may be eligible for the Award subject to thefollowing conditions:

- Must be self-sufficient;

- Must have a clear definition of its own organizationand be recognized by its customers as a distinct businessentity; and

- Must not perform solely business support functions suchas Sales, Marketing, Distribution, Customer Service,Finance and Accounting, Human Resources, EnvironmentalHealth–Safety of employees, Purchasing Legal Servicesand Research and Development.

Multiple-Application Restrictions

- A subsidiary and its parent organization cannot both apply for PQA in the same year.

Future Eligibility Restrictions

- If an organization or subsidiary that has more than fiftypercent of the total employees of the parent companyreceives the Philippine Quality Award for PerformanceExcellence, the organization and all its subsidiaries areineligible to apply for another award for a period of threeyears.

- If a subsidiary receives the Philippine Quality Awardfor Performance Excellence, that subsidiary and a subsidiaryof all its subsidiaries are ineligible to apply for anotheraward for a period of three years.


Fees for the 2008 Award Cycle

Application Fees

These fees cover all expenses associated with distribution and review of applications and development of feedbackreports.

For medium to large organizations, class A PhP 20,000.00Local Government Units/cities, Line Agencies,Bureaus, GOCCs and GFIs

For small organization, class B/C Local PhP 10,000.00Government Units, and regional branches ofLine Agencies and Bureaus

These fees shall be reviewed and adjusted annually.

Site Visit Review Fees

Site visit review fees will be set when the visits are scheduled. Fees depend on the number of Assessors assigned,duration of the visit and the number and location of the site/s. Site visit fees cover all expenses and travel costs associatedwith site visit participation and development of site visit reports. These fees are paid only by those applicants reaching thesite visit stage.

Site visit review fees for applicants in Small Enterprise Category will be charged at one-half of the rate charged forcompanies in the Manufacturing and Service Categories.

Schedule of Submission of Forms

Applicant companies may submit Eligibility Determination Forms anytime during the year. Award Administrators willgive feedback on their eligibility. Eligible applicants may submit Application Form from January to May in the appropriateaward cycle.

Eligibility Determination Form - January-DecemberApplication Form - January-May 2nd weekApplication Report - May 2nd week-4th week


Summary of Application Requirements

PQA Self-Assessment

Applicant organizations are expected to conduct self-assessment and submit most recent results to the AwardAdministrator when applying for the PQA. The OrganizationalProfile is the starting point for self-assessment and for writingan application.

Three-day Application Development Seminar

Attendance to the PQA Application DevelopmentSeminar (PQA-ADS) is a pre-requisite for all first time ap-plicants. This can be done by either sending representa-tives to a public seminar or conducting an in-house semi-nar. Second time applicants are also encouraged to at-tend the PQA-ADS as there are periodic changes in thecriteria or in the application report format, content or pro-cess of submitting application and other award administra-tion policies/guidelines.

Application for Eligibility Determination

Refer to the Eligibility Categories and Restrictions onpp. 73-74 and to the attached Eligibility Determination Form.

Application Fee

See Fees, page 75.

I. No. of Pages:

1. Application Report: 50 (maximum) 2. Organizational Profile: 5 (maximum)

55

II. Typing Instructions

1. Font Type : Arial 2. Font Size : Point 11 or 12 3. Paper : A4 Size 4. Format : Two Columns 5. Spacing : Single

III. Table of Contents

1. One-page Application Form 2. Business/Organizational Overview 3. Criteria Responses

Category NumberExamination ItemArea to Address

IV. No. of Copies: 15 original copies, printed back-to-backwith spiral binder and copy control numbers

____

Application Report


b. Assets preceding fiscal year (Check one.) < P15M P15M-P60M P60M-P100M P100M-P500M P500M-P1B > P1B

c. Number of sites in Philippines

Overseas

d. Total Number of Employees

e. Percent employees in the Philippines

f. Percent physical assets in Philippines

5 Award Category (Check one.)

Private Organization [ ( ) Small / ( ) Medium / ( ) Large Enterprise ]

Manufacturing Service Agriculture Other Industry

(Please specify)

Public Organization

National Line Agency Local Gov’t Unit Government-Owned State Universities

and Controlled Corp. and Colleges

Other Government Agencies

(Please specify)

ELIGIBILITY DETERMINATION FORM (EDF) Page 1 of 5

PHILIPPINE QUALITY AWARD

1 Applicant

Official NameOther NamePrior NameAddress of Headquarters

Has the applicant officially or legally existed forat least three (3) years?

(Check one.) ___ Yes ___ No (Briefly explain.)

Attach a line and box organizational chart for theapplying organization.

2 Highest-Ranking Official

NameTitleAddress

Telephone No.

3 For-Profit Designation

Is the applicant a for-profit business?(Check one.) ___ Yes ___ No

4 Size and Location of Applicant

a. Revenue/Sales/Budget precedingfiscal year (Check one.)

< P15M P15M P60M-P100M P100M-P50 P500M-P1B > P1B




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Employees

Revenue/Budget

6

Site

Lis

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and

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7 Business Factors

Provide a brief description of the following keybusiness factors:

a. Nature of applicant’s business (products,services, and technologies); conclude with a listof key “competitors”.

b. Nature of major markets (local, regional, national,and international); conclude with a list of keycustomers.

c. Importance of suppliers, dealers, distributors,and franchises; conclude with a list of keysuppliers.

8 Sub-Unit Designation

Is applicant a subsidiary, business unit,division, or like organization of a larger parentorganization? (Check one.)

___ Yes (continue) ___ No (go to item 9.)

a. Parent Organization

Name Address

Highest Official Title Telephone No. Fax No.

Number of worldwide employees of the parent

b. Does the applicant comprise over 25 percent of the worldwide employees of the parent? (Check one.)

____ Yes ____ No ____N/A

c. If the parent is a holding company, did the applicant operate as an independent

company prior to acquisition? (Check one.)

____ Yes ____ No ____ N/A

d. Is the applicant’s parent or another subunit of the parent intending to apply? (Check one.)

____ Yes (Briefly explain.) ____ No____ Don’t know




e. Name the document supporting the subunitdesignation.

Include a copy of the document with this form.

f. Briefly describe the organizational structureand management links to the parent.

g. Do other units within the parent provide similarproducts or services? (Check one.)

____ Yes (Briefly explain.) ____ No

If “Yes”, also explain how the applicant is distinguishable from the parent and its other subunits.

h. Briefly describe the major business support functions provided to the applicant by the parent or by other sub

9 Other Requirements

a. Is the applicant company complying with relevant statutory and regulatory requirements (BIR, SSS, GSIS, DENR DOLE, SEC)

____ Yes ____ No ____ N/A

b. Does the applicant company have employee/s trained in PQA Application Development?

____ Yes ____ No ____ N/A

c. Has the applicant conducted an internal assessment based on the relevant PQA Criteria?

____ Yes ____ No ____ N/A

(If “Yes”, results of internal assessment should be presented to the Award Administrator when applying for eligibility.)




10 Official Contact Person

NameTitleMailing Address

Telephone No.Fax No.E-mail

11 Signature, Authorizing Official

Date

SignatureNameTitleAddress

Telephone No.

NOTE: Future Eligibility Restrictions

1. If an organization or subsidiary that has more thanfifty percent (50%) of the total employees of theparent company receives the Philippine Quality Awardfor Performance Excellence, the organization and allits subsidiaries are ineligible to apply for anotheraward for a period of three years.

2. If a subsidiary receives the Philippine Quality Awardfor Performance Excellence, that subsidiary and asubsidiary of all its subsidiaries are ineligible to applyfor another award for a period of three (3) years.

3. Applicants are eligible to reapply on the secondyear from its application.

DO NOT WRITE BELOW THIS LINE

Eligibility Determination

Private Organization Public Organization( ) Small o National Line Agency( ) Medium o Government-Ownedn( ) Large Enterprise and Controlled Corp.

o Local Gov’t Unito Manufacturing o State Universities/o Service Collegeso Agriculture o Other Governmento Other Industry Agency

o Ineligible

Award AdministratorFor official use only




1 Applicant

Official Name Address

2 Award Category (Check one.)

Private Organization [ ( ) Small / ( ) Medium / ( ) Large Enterprise ]

___ Manufacturing ___ Service___ Agriculture ___ Other Industry

______________ (Please specify)

Public Organization

___ National Line Agency ___ Local Gov’t Unit ___ Government-Owned ___ State Universities and Controlled Corp. and Colleges

___ Other Government Agencies __________________

(Please specify)

3 Highest-Ranking Official

Name Title Address

Telephone No.

4 Official Contact Person

Name Title Mailing Address

Telephone No. Fax No. E-mail:

APPLICATION FORM (AF)


5 Application Fee

Enclosed is (amount in words)

__________________ (P _____________).

Make check or money order payable to:For public sector applications: Development Academy of the Philippines

For private sector applicants: Philippine Society for Quality

6 Release Statement

We understand that this application will be reviewedby members of the Board of Judges and Team ofAssessors.

Should our organization be selected for a site visit,we agree to host the site visit and to facilitate an openand unbiased examination. We understand that theorganization must pay reasonable costs associatedwith a site visit.

If our organization is selected to receive an Award,we agree to share non-proprietary information on oursuccessful performance and quality strategies withother Philippine organizations. And we shall abidewith the rules for the use of the PQA Logo.

7 Signature, Authorizing Official

SignatureNameTitleMailing Address

Telephone No.Fax No. E-mail:

8 Date Submitted:This page may be copied and attached to, or bound with, other application materials.


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