The Godfathers of Accounting
Team members:
Pavel Kachailov (Monash University Caulfield) ,
Ronny Ho Von (Monash University Caulfield)
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Synopsis
The Godfathers of Accounting analysed Medicins Sans Frontieres (MSF) Australia to come up with a Balanced Scorecard which covers seven Key Performance Indicators (KPIs) of MSF Australia's operations. Within the Financial Perspective, the group identified two KPIs: Fundraising Technique Expense Ratio and Administration Ratio. Under the Awareness, Independence and Ethics Perspective, the group identified two KPIs: Donor Independence Ratio and Awareness Measures. Finally, the group identified three KPIs in the Learning and Growth Perspective: Employee Satisfaction Surveys; Volunteer Recruitment Ratio; and Departure-Preparation Course Attendance Ratio. All of the KPIs aimed to resolve the key objectives of MSF Australia in a practical manner, concentrating on the organisation's key areas of concern: cost effectiveness; awareness; human resources; and independence. Strong emphasis was placed on identifying the KPIs that: were relevant to MSF Australia's operations; enhanced accountability and transparency; and were cost effective.
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The Godfathers! Ooh should I watch what I say?
Haha. Gentleman its a pleasure to read your report. Everyone else should take note of the formatting the GoA have used. Contents page, appropriate headings, fonts tables, pdfs, page numbers, footer. Excellent - you just earned yourself a star for that.
Project background and defintions! Great!
Good use of balanced scorecard, shows you got an idea of what your talking about, again formatted and spaced excellently.
Cost effectiveness:
You have focused on the donations and administration costs. Whilst these are valid areas they make up at most 20% of the budget, that means you've only got a foot hold of 20% to make cost reductions in, many of which will be unavoidable. There are bigger wins to be made in the operational/logistics area (80% budget).
With regard to your Donor Independence ratio, I see what you guys are saying - large single donations that are "restricted to a certain crisis" could comprimise independence (yes and no, certainly no if the donation is large and MSF can freely use it where it likes). The idea that MSF can implement a control on the donations seems counter-intuitive. You can't force other people to donate, and you aren't going to reject money from someone because they want it spent in Bangladesh instead of Pakistan. I don't think it really places pressure on management, they just bank it in a restricted account for use when an appropriate project becomes available.
Public Awareness section is good and feasible, I think your measures a practical and cost effective.
Nice measure on Employee satisfaction, its a lot cheaper to retain a quality individual than recruit a new one.
Good attempt on the volunteer recruitment ratio. Its the right idea but your sacrificing quality for a measure of quality - something to think about.
Employee training program is certainly important, I don't know if I'd call it a performance indicator though.
Good summary table on Relevance, Accountability, Transparency & Cost Effectiveness.
All in all, excellent written presentation, an AV/Powerpoint couldn't have hurt though.
Haha. Gentleman its a pleasure to read your report. Everyone else should take note of the formatting the GoA have used. Contents page, appropriate headings, fonts tables, pdfs, page numbers, footer. Excellent - you just earned yourself a star for that.
Project background and defintions! Great!
Good use of balanced scorecard, shows you got an idea of what your talking about, again formatted and spaced excellently.
Cost effectiveness:
You have focused on the donations and administration costs. Whilst these are valid areas they make up at most 20% of the budget, that means you've only got a foot hold of 20% to make cost reductions in, many of which will be unavoidable. There are bigger wins to be made in the operational/logistics area (80% budget).
With regard to your Donor Independence ratio, I see what you guys are saying - large single donations that are "restricted to a certain crisis" could comprimise independence (yes and no, certainly no if the donation is large and MSF can freely use it where it likes). The idea that MSF can implement a control on the donations seems counter-intuitive. You can't force other people to donate, and you aren't going to reject money from someone because they want it spent in Bangladesh instead of Pakistan. I don't think it really places pressure on management, they just bank it in a restricted account for use when an appropriate project becomes available.
Public Awareness section is good and feasible, I think your measures a practical and cost effective.
Nice measure on Employee satisfaction, its a lot cheaper to retain a quality individual than recruit a new one.
Good attempt on the volunteer recruitment ratio. Its the right idea but your sacrificing quality for a measure of quality - something to think about.
Employee training program is certainly important, I don't know if I'd call it a performance indicator though.
Good summary table on Relevance, Accountability, Transparency & Cost Effectiveness.
All in all, excellent written presentation, an AV/Powerpoint couldn't have hurt though.
By Sam Gray on April 28 2008, 04:05
Yes, Sam. You should have payed more attention to what you were going to say. We have already arranged a HIT. The snipers are on the plane heading to Western Australia. Haha. Just kidding man. Thanks for the feedback! I will try to answer each of your questions in order and clear up any uncertainty.
Regrading cost effectiveness… What do you mean by the budgetary statistics? As far as I understand, you are referring to the operational activities held at the actual fields overseas. We have purposely excluded any performance measures regarding the direct operations of MSF overseas, as the performance measures deal with MSF International and not MSF Australia. By looking at the annual report 2006 for MSF Australia and by confirming with the head office in Sydney, we discovered that MSF Australia is held accountable only for the fundraising and recruitment. As far as we understood, the field costs referred in the income statement for MSF Australia mainly refer to the money sent to the MSF head office in Paris. The cash flow statement provides further evidence as the same amount is placed under the ‘payments to field’ account. Therefore, we felt that MSF Australia will not benefit from the operational measures at all, since the performance of employees within MSF Australia will not be relevant in regards to the operations abroad. We concluded that the main actionable performance measures were in regards to the fundraising and administration expenses, since KPIs are only useful as long as they effectively influence the performance within the given organisation. Although the field costs regarding operations and logistics may appear to be the key areas of concern, they are not controllable by MSF Australia, since the organisation is a non-operational partner. For these reasons, we excluded cost effective measures for operational costs. Sorry if I misunderstood your response. Please tell me if I have made the wrong assumptions regarding your feedback.
Regarding the Donor Independence Ratio… Sorry for not being clear about the concept. Our report was running too long, so we had to crop most of the discussions within the donor independence ratio. We did not mean to refer to "restricted to a certain crisis" donations. As we understood, the donors do not tell MSF Australia where they want the money sent when they make a donation. However, what the donors can do is to send threats to MSF Australia by stating that they will quit donating unless MSF Australia is to implement humanitarian-aid in a specific country (of the donor’s preference). This will pose an independence threat on MSF Australia as the management will be threatened to act on the request. The reason is that the fundraising division has a goal to maximise the funding from donors. The outcome can result in a negative impact on the organisation’s reputation as an independent source of humanitarian-aid. Radical example… Imagine if a single donor accounted for 90% of the donations. The donor may have a strong political and religious bias and demands that MSF use majority of the funding to help a certain country with the same religious background as the donor. The aid may be unethical as the specified country might not be experiencing the extreme difficulties faced by other nations. The outcome of following the donor’s request will be serious damage to MSF’s reputation as an organisation free of political, economic and religious biases. However, without a certain measure to take the responsibility off management, the management will be obliged to follow the donor’s request, since MSF Australia will lose 90% of the donations. Our group felt that MSF Australia must be able to set a control that will prevent such outcomes. This is why we produced the Donor Independence Ratio. You are correct in asserting that MSF Australia will not be able to force people to donate more money. By increasing total donations, we meant that MSF Australia can take certain measures other than forcing the donors into making donations (e.g. by making “deals that the donors cannot refuse” quoted from The Godfather). Measures can include actions by MSF Australia to increase advertisement, for example. On the other hand, our group felt that MSF can indeed limit the donations received from a single entity. The limitation can be made possible by including a clause within the donation form, such as “MSF Australia apologises that donors may not be able to make donations over a certain limit as the act will compromise MSF Australia’s independence.” Although the outcome may be reduced donations, MSF Australia will be able to successfully retain its positive reputation around the world. It is also important to keep in mind that MSF Australia only accounts for a small portion of fundraising. This means that a reduction in funds raised from Australian fundraising activities will not affect MSF International as a whole, whereas a serious damage to the reputation will. Therefore, our group concluded that the benefits derived from the measure (preserving MSF’s reputation) will definitely outweigh the costs (reduction in MSF Australia’s funds due to a set limit for donations). Hopefully this answers your concern. The length of my response is the very reason why we did not include all of the details in our report. Sorry for being wordy.
Thank you for appraising our other measures. I totally agree with the statement that it is a lot easier to retain an employee rather than to hire a new one. Basics of marketing I guess.
Just a follow-up on the volunteer recruitment ratio… I believe you felt that we are sacrificing the quality over quantity by implementing a KPI that will measure recruitment in terms of quantity. I guess our group was not totally clear on this aspect as well. It might seem that we are placing a performance related pressure on the recruitment division by benchmarking them against the ratio. However, what we intended to focus on was the direct opposite. We felt that the recruitment staffs at MSF Australia were functioning at the maximum capacity with high emphasis placed on recruiting medical staff of high calibre. This assumption is evident in MSF Australia’s website in the volunteer recruitment section. However, we felt that the staff can be judged unfairly by looking at the annual report which mentioned that there were less volunteers recruited for the year 2006. Our group felt that this reduction in recruitment can be caused by factors outside of the recruitment team’s control. It was difficult to find a way to separate performance related directly to the efforts exerted by staff and performance related to other external factors. The issue relates to the management concept of a fundamental attribution error where the management may feel that the recruitment division is not exerting enough effort to recruit new volunteers, while the actual reason may lie in the external factors. Therefore, we attempted to provide a measure that will enable management to judge the recruitment division fairly. The intention is not to criticise the performance of the recruitment division. Therefore, we leave the final decision up to MSF Australia, whether it perceives the measure to produce benefits that exceed the costs. We do not have enough internal information to decide if the measure will result in the recruitment division to increase performance, or if it will result in negative behaviours that will harm MSF Australia’s reputation, in case the recruitment division decides to lower the barriers for volunteer qualifications. Further research must be conducted to reveal the precise effectiveness of the measure. The KPI is a mere idea with a purpose to point out a possible area of improvement within the organisation. Thank you for pointing out the alternative view of the measure, as I believe that it could have confused other readers as well.
Finally, regarding the employee training program… Once again, I recognise the source of confusion. I realised that our group mentioned only once in the section at whom the KPI was aimed at. I believe that you understood that the KPI is directed at the volunteers themselves. In such a case, the mentioned measure will not be a valid KPI as it relates to the overseas operations and not the responsibility placed on MSF Australia itself. However, the KPI is actually aimed at the HR division within the organisation as slightly mentioned in the measurement & drivers section. Our group understood that a KPI is a measure that aligns the organisation’s objectives with performance of the individual divisions within the organisation. The training attendance ratio is in fact a KPI as it measures the HR division’s performance in providing sufficient training to the employees so that the service quality is aligned with the organisation’s aims and employee safety is maximised. Improved HR performance will result in a positive spill-over on the financial aspects of the organisation as the employees will provide better services to the patients and will be more motivated to work. The KPI will ensure that the volunteers are trained properly. I apologise if I misunderstood what you meant by the measure not being a valid KPI. Hopefully, I was able to provide the necessary explanation for the feedback.
Thank you so much for leaving feedback. We will definitely look over your submission and comment on it as well. Sorry for not putting up the video or PowerPoint. Our group did not want to be repetitive in providing the same information in different formats. We felt that our message will be clearer if we were to use one format for presentation. We placed our efforts on making the report as simple as possible and easy to read, so that the readers will be able to fully understand what we mean. We felt that many formats will confuse the readers, judging from what we felt the last time we entered the competition.
Once again, thank you for the feedback.
Sincerely,
Pavel
Regrading cost effectiveness… What do you mean by the budgetary statistics? As far as I understand, you are referring to the operational activities held at the actual fields overseas. We have purposely excluded any performance measures regarding the direct operations of MSF overseas, as the performance measures deal with MSF International and not MSF Australia. By looking at the annual report 2006 for MSF Australia and by confirming with the head office in Sydney, we discovered that MSF Australia is held accountable only for the fundraising and recruitment. As far as we understood, the field costs referred in the income statement for MSF Australia mainly refer to the money sent to the MSF head office in Paris. The cash flow statement provides further evidence as the same amount is placed under the ‘payments to field’ account. Therefore, we felt that MSF Australia will not benefit from the operational measures at all, since the performance of employees within MSF Australia will not be relevant in regards to the operations abroad. We concluded that the main actionable performance measures were in regards to the fundraising and administration expenses, since KPIs are only useful as long as they effectively influence the performance within the given organisation. Although the field costs regarding operations and logistics may appear to be the key areas of concern, they are not controllable by MSF Australia, since the organisation is a non-operational partner. For these reasons, we excluded cost effective measures for operational costs. Sorry if I misunderstood your response. Please tell me if I have made the wrong assumptions regarding your feedback.
Regarding the Donor Independence Ratio… Sorry for not being clear about the concept. Our report was running too long, so we had to crop most of the discussions within the donor independence ratio. We did not mean to refer to "restricted to a certain crisis" donations. As we understood, the donors do not tell MSF Australia where they want the money sent when they make a donation. However, what the donors can do is to send threats to MSF Australia by stating that they will quit donating unless MSF Australia is to implement humanitarian-aid in a specific country (of the donor’s preference). This will pose an independence threat on MSF Australia as the management will be threatened to act on the request. The reason is that the fundraising division has a goal to maximise the funding from donors. The outcome can result in a negative impact on the organisation’s reputation as an independent source of humanitarian-aid. Radical example… Imagine if a single donor accounted for 90% of the donations. The donor may have a strong political and religious bias and demands that MSF use majority of the funding to help a certain country with the same religious background as the donor. The aid may be unethical as the specified country might not be experiencing the extreme difficulties faced by other nations. The outcome of following the donor’s request will be serious damage to MSF’s reputation as an organisation free of political, economic and religious biases. However, without a certain measure to take the responsibility off management, the management will be obliged to follow the donor’s request, since MSF Australia will lose 90% of the donations. Our group felt that MSF Australia must be able to set a control that will prevent such outcomes. This is why we produced the Donor Independence Ratio. You are correct in asserting that MSF Australia will not be able to force people to donate more money. By increasing total donations, we meant that MSF Australia can take certain measures other than forcing the donors into making donations (e.g. by making “deals that the donors cannot refuse” quoted from The Godfather). Measures can include actions by MSF Australia to increase advertisement, for example. On the other hand, our group felt that MSF can indeed limit the donations received from a single entity. The limitation can be made possible by including a clause within the donation form, such as “MSF Australia apologises that donors may not be able to make donations over a certain limit as the act will compromise MSF Australia’s independence.” Although the outcome may be reduced donations, MSF Australia will be able to successfully retain its positive reputation around the world. It is also important to keep in mind that MSF Australia only accounts for a small portion of fundraising. This means that a reduction in funds raised from Australian fundraising activities will not affect MSF International as a whole, whereas a serious damage to the reputation will. Therefore, our group concluded that the benefits derived from the measure (preserving MSF’s reputation) will definitely outweigh the costs (reduction in MSF Australia’s funds due to a set limit for donations). Hopefully this answers your concern. The length of my response is the very reason why we did not include all of the details in our report. Sorry for being wordy.
Thank you for appraising our other measures. I totally agree with the statement that it is a lot easier to retain an employee rather than to hire a new one. Basics of marketing I guess.
Just a follow-up on the volunteer recruitment ratio… I believe you felt that we are sacrificing the quality over quantity by implementing a KPI that will measure recruitment in terms of quantity. I guess our group was not totally clear on this aspect as well. It might seem that we are placing a performance related pressure on the recruitment division by benchmarking them against the ratio. However, what we intended to focus on was the direct opposite. We felt that the recruitment staffs at MSF Australia were functioning at the maximum capacity with high emphasis placed on recruiting medical staff of high calibre. This assumption is evident in MSF Australia’s website in the volunteer recruitment section. However, we felt that the staff can be judged unfairly by looking at the annual report which mentioned that there were less volunteers recruited for the year 2006. Our group felt that this reduction in recruitment can be caused by factors outside of the recruitment team’s control. It was difficult to find a way to separate performance related directly to the efforts exerted by staff and performance related to other external factors. The issue relates to the management concept of a fundamental attribution error where the management may feel that the recruitment division is not exerting enough effort to recruit new volunteers, while the actual reason may lie in the external factors. Therefore, we attempted to provide a measure that will enable management to judge the recruitment division fairly. The intention is not to criticise the performance of the recruitment division. Therefore, we leave the final decision up to MSF Australia, whether it perceives the measure to produce benefits that exceed the costs. We do not have enough internal information to decide if the measure will result in the recruitment division to increase performance, or if it will result in negative behaviours that will harm MSF Australia’s reputation, in case the recruitment division decides to lower the barriers for volunteer qualifications. Further research must be conducted to reveal the precise effectiveness of the measure. The KPI is a mere idea with a purpose to point out a possible area of improvement within the organisation. Thank you for pointing out the alternative view of the measure, as I believe that it could have confused other readers as well.
Finally, regarding the employee training program… Once again, I recognise the source of confusion. I realised that our group mentioned only once in the section at whom the KPI was aimed at. I believe that you understood that the KPI is directed at the volunteers themselves. In such a case, the mentioned measure will not be a valid KPI as it relates to the overseas operations and not the responsibility placed on MSF Australia itself. However, the KPI is actually aimed at the HR division within the organisation as slightly mentioned in the measurement & drivers section. Our group understood that a KPI is a measure that aligns the organisation’s objectives with performance of the individual divisions within the organisation. The training attendance ratio is in fact a KPI as it measures the HR division’s performance in providing sufficient training to the employees so that the service quality is aligned with the organisation’s aims and employee safety is maximised. Improved HR performance will result in a positive spill-over on the financial aspects of the organisation as the employees will provide better services to the patients and will be more motivated to work. The KPI will ensure that the volunteers are trained properly. I apologise if I misunderstood what you meant by the measure not being a valid KPI. Hopefully, I was able to provide the necessary explanation for the feedback.
Thank you so much for leaving feedback. We will definitely look over your submission and comment on it as well. Sorry for not putting up the video or PowerPoint. Our group did not want to be repetitive in providing the same information in different formats. We felt that our message will be clearer if we were to use one format for presentation. We placed our efforts on making the report as simple as possible and easy to read, so that the readers will be able to fully understand what we mean. We felt that many formats will confuse the readers, judging from what we felt the last time we entered the competition.
Once again, thank you for the feedback.
Sincerely,
Pavel
By Pavel Kachailov on April 28 2008, 20:27
I believe major areas are covered generally, well, it is up to the management team to decide which measures are more applicable, because I believe in real life operation, there will be much more to encounter which is impossible for a single method to be best in particular situation, rather, be flexible in picking appropriate method in different situation will be a key to be cost effective and accurate, without knowing the actual operation procedure and system of MSF Australia is using, you guys have been doing great job, clearly justified each of every measurement in their Australia operation
Cheers!!
By ZheKhai on April 28 2008, 23:04
Hi Pavel and Ronny,
Superb structure and layout! A very commendable effort to understand MSFA's stance within MSF International movement, something that a lot of submissions have missed.
A general balanced scorecard framework you use is more suited to a for-profit enterprise. Besides, why did you go into trouble of identifying lead indicators? The focus was supposed to be on external reporting not the performance measurement system in its entirety. Your report is over the page limit by 2 pages.
A very good point on the specific challenges facing MSFA in attracting Australian medical professionals. Currently, MSFA's recruiting process is not very selective. In 2006 they accepted 44% of volunteers who had lodged a fomal application. This was largely due to a small number of applications. Only 25% of attendants at the recruitment evenings submitted an application.
Great research related to your departure-preparation course attendance ratio. I was surprised to learn that pre-departure training is not quite mandatory. I think that MSFA's stakeholders should be concerned that 'non-compliant' volunteers are allowed to go on missions!
The volunteer recruitment ratio is an inventive idea although I would consider it a measure of HR quantity not HR quality (but you have already responded to that). The ratio is likely to be a very low percentage. For your purposes the denominator should rather be the number of NEWLY qualified doctors. Remember that MSFA is also recruiting paramedics and non-medical volunteers.
It appears that you have touched on all major performance areas. However, there are no KPIs that relate to MSFA's operations (i.e. Project Unit).
Superb structure and layout! A very commendable effort to understand MSFA's stance within MSF International movement, something that a lot of submissions have missed.
A general balanced scorecard framework you use is more suited to a for-profit enterprise. Besides, why did you go into trouble of identifying lead indicators? The focus was supposed to be on external reporting not the performance measurement system in its entirety. Your report is over the page limit by 2 pages.
A very good point on the specific challenges facing MSFA in attracting Australian medical professionals. Currently, MSFA's recruiting process is not very selective. In 2006 they accepted 44% of volunteers who had lodged a fomal application. This was largely due to a small number of applications. Only 25% of attendants at the recruitment evenings submitted an application.
Great research related to your departure-preparation course attendance ratio. I was surprised to learn that pre-departure training is not quite mandatory. I think that MSFA's stakeholders should be concerned that 'non-compliant' volunteers are allowed to go on missions!
The volunteer recruitment ratio is an inventive idea although I would consider it a measure of HR quantity not HR quality (but you have already responded to that). The ratio is likely to be a very low percentage. For your purposes the denominator should rather be the number of NEWLY qualified doctors. Remember that MSFA is also recruiting paramedics and non-medical volunteers.
It appears that you have touched on all major performance areas. However, there are no KPIs that relate to MSFA's operations (i.e. Project Unit).
By Olga Ryabova on May 5 2008, 01:07
Hi Pav
Thanks for clearing up those points, I know when you writing and re-writing a report for the 6th time things can slip past you that a 1st time reader might get confused on.
Really liked you report, I think the only fundamental difference between ours is that we included operations as an area of responsibility for Australia. We based this on Rowan Gillies statement on page 10 referring to MSG Australia operating projects from the Paris office.
Tough one to call though because the financials don't make it overtly clear. Great job though guys and thanks for clearing up my questions
Thanks for clearing up those points, I know when you writing and re-writing a report for the 6th time things can slip past you that a 1st time reader might get confused on.
Really liked you report, I think the only fundamental difference between ours is that we included operations as an area of responsibility for Australia. We based this on Rowan Gillies statement on page 10 referring to MSG Australia operating projects from the Paris office.
Tough one to call though because the financials don't make it overtly clear. Great job though guys and thanks for clearing up my questions
By Sam Gray on May 5 2008, 03:46
Hi Guys,
Great report, we think that the layout was really good and easy to follow with your table of contents and the way you have stated the aim, significance, measurement & drivers as well as the practicality of each KPI.
We thought that the use of the balanced score card was clever as it was used as a system to highlight your KPIs and their measurements.
We liked the areas of awareness and employee satisfaction in your report.
It is vital for any charity organisation to increase its awareness of global issues with the Australian public. It is good that you guys have indicated measurements for the effective sources of advertisements such as the clicking rate, TV ratings and the number of people that show up to events.
An increase in awareness, we believe can also encourage individuals to ‘make a difference’ in the world and make a donation. Although their donation may be only a part of a large accumulation of funds, we think that it is important for the donors to understand their individual impact to a person, or a number of persons, just to create a sense of individual satisfaction.
As to employee satisfaction, we also liked this aspect as MSF Australia can work to maximise the retention of medical staff recruited.
Great effort :)
Andrea & Katy
Great report, we think that the layout was really good and easy to follow with your table of contents and the way you have stated the aim, significance, measurement & drivers as well as the practicality of each KPI.
We thought that the use of the balanced score card was clever as it was used as a system to highlight your KPIs and their measurements.
We liked the areas of awareness and employee satisfaction in your report.
It is vital for any charity organisation to increase its awareness of global issues with the Australian public. It is good that you guys have indicated measurements for the effective sources of advertisements such as the clicking rate, TV ratings and the number of people that show up to events.
An increase in awareness, we believe can also encourage individuals to ‘make a difference’ in the world and make a donation. Although their donation may be only a part of a large accumulation of funds, we think that it is important for the donors to understand their individual impact to a person, or a number of persons, just to create a sense of individual satisfaction.
As to employee satisfaction, we also liked this aspect as MSF Australia can work to maximise the retention of medical staff recruited.
Great effort :)
Andrea & Katy
By Andrea Rosanes on May 7 2008, 00:33
Thank you for your submission.
We were interested in the measures that you have come up with. Do you have any thoughts on what might be considered base levels of performance in terms of the KPIs noted?
We were interested in the measures that you have come up with. Do you have any thoughts on what might be considered base levels of performance in terms of the KPIs noted?
By Judge on May 7 2008, 16:03
Thanks ZheKhai for taking the time to read our report. I do agree with the fact that management will have to make their final words on what is more cost effective and relevant KPIs.
Cheers
Ronny
Cheers
Ronny
By Ronny Ho Von on May 8 2008, 18:09
Hello Dons,
Regarding you KPI for Awareness Measures, which focuses on mass media, public functions and the internet. Do you think there is more too public awareness than just those three segments of measurement?
Regarding you KPI for Awareness Measures, which focuses on mass media, public functions and the internet. Do you think there is more too public awareness than just those three segments of measurement?
By carlo macri on May 9 2008, 09:08
Dear Judges,
Thank you for taking interest in our report. We have placed major emphasis on practicality when we were putting the report together. Various base levels of performance were considered for each KPI mentioned, yet some of the KPIs require internal information that cannot be attained from the financial statements. The basic levels of performance are outlined below for each KPI.
Fundraising Technique Expense Ratio:
The base level of performance for the ratio can only be calculated if the internal information regarding the expenses allocated to each of the techniques and the donations derived from each technique are made available. The main purpose of this ratio is to find the most effective technique for fundraising.
Administration Ratio:
In order to determine the base level of performance for this measure, the management will need to gather external data from the related industry as well as internal data regarding the expenses. The external data will allow MSF Australia to benchmark performance. 0.05 (5%) seems to be a base level of performance. Of course, the internal situation of the organisation must be fully analysed to find a suitable base level. The financial statements of MSF Australia reveal that the administration ratio for MSF Australia was 0.0724 in 2007 and 0.0609 in 2006. This signifies a 1.15% increase, which is not for the benefit of the organisation. The management will have to look at the expenses incurred by administration and aim to minimise any insignificant transactions. Management should always pay attention to the balance between the administration expenses and total income to try and minimise the ratio.
Donor Independence Ratio:
This is one area where internal information regarding all donations must be present in order to set accurate levels of performance. Only by looking at the individual donation figures and understanding the distribution of donations, will we be able to make a final assessment on the level of performance that is to be expected. Judging from the figures present in the financial statements, the likely level of performance will be based around 5%. That is, any donations from individual donors exceeding 5% of the total donations ($1,387,476) should be considered a threat. MSF Australia should aim to keep all individual donations below this amount.
Awareness Measures:
Internal information regarding each of the awareness activities must be observed in order to assess the base level of performance. The aim is to set a higher goal each year than the previous year. For example, a possible base level of performance for the events may be a 5% increase in the number of people attending the similar event next year. The base level of performance for the TV programs may be a goal to raise the TV ratings by 5% in the following year, and so on. Basically, the level of performance will be determined by the management so that the goals are reasonable but challenging so as to enhance performance.
Employee Satisfaction Surveys:
The base level of performance for this measure will be based on the survey results from previous years. Management should aim to enhance the workplace satisfaction by improving any areas of concern. The management will determine a certain benchmark for improvement and strive to increase the percentage of employees who rate the organisation five stars. An example of a base level of performance may be to increase employees that rate a certain aspect of the organisation five stars by 10%. The benchmark doesn’t have to be based on five stars. If management finds a certain are where there are major issues, it can start by setting a goal to increase the number of employees who rate the aspect three or four stars. The level of performance will be up the management’s discretion.
Volunteer Recruitment Ratio:
The level of performance will be based on the total number of certified doctors in Australia. Management should acknowledge that the percentage will be really small for this measure judging from the nature of the industry. Not many doctors will want to risk their lives for a moderate salary in a dangerous environment. MSF Australia will have to ask the government for the precise figures of certified doctors. By looking at the Australian Bureau of Statistics and assuming that 20% of the employees in the “Health care and social assistance” industry are doctors (the assumption is totally a guess), we would say that a reasonable measure would be around 0.07%. The measure is definitively inaccurate due to the lack of information provided. Our group would have to get a hold of the actual figures of certified doctors in Australia to figure out the acceptable base level that will be challenging yet achievable.
Departure‐Preparation Course Attendance ratio:
Base level of performance for this measure should be set at 100% judging from the importance of the pre-departure training.
Once again, all of the discussed base levels of performance are mere possibilities. Our group will need to access MSF Australia’s internal records and work with the management to set up the necessary base levels.
Thank you for taking interest in our report. We have placed major emphasis on practicality when we were putting the report together. Various base levels of performance were considered for each KPI mentioned, yet some of the KPIs require internal information that cannot be attained from the financial statements. The basic levels of performance are outlined below for each KPI.
Fundraising Technique Expense Ratio:
The base level of performance for the ratio can only be calculated if the internal information regarding the expenses allocated to each of the techniques and the donations derived from each technique are made available. The main purpose of this ratio is to find the most effective technique for fundraising.
Administration Ratio:
In order to determine the base level of performance for this measure, the management will need to gather external data from the related industry as well as internal data regarding the expenses. The external data will allow MSF Australia to benchmark performance. 0.05 (5%) seems to be a base level of performance. Of course, the internal situation of the organisation must be fully analysed to find a suitable base level. The financial statements of MSF Australia reveal that the administration ratio for MSF Australia was 0.0724 in 2007 and 0.0609 in 2006. This signifies a 1.15% increase, which is not for the benefit of the organisation. The management will have to look at the expenses incurred by administration and aim to minimise any insignificant transactions. Management should always pay attention to the balance between the administration expenses and total income to try and minimise the ratio.
Donor Independence Ratio:
This is one area where internal information regarding all donations must be present in order to set accurate levels of performance. Only by looking at the individual donation figures and understanding the distribution of donations, will we be able to make a final assessment on the level of performance that is to be expected. Judging from the figures present in the financial statements, the likely level of performance will be based around 5%. That is, any donations from individual donors exceeding 5% of the total donations ($1,387,476) should be considered a threat. MSF Australia should aim to keep all individual donations below this amount.
Awareness Measures:
Internal information regarding each of the awareness activities must be observed in order to assess the base level of performance. The aim is to set a higher goal each year than the previous year. For example, a possible base level of performance for the events may be a 5% increase in the number of people attending the similar event next year. The base level of performance for the TV programs may be a goal to raise the TV ratings by 5% in the following year, and so on. Basically, the level of performance will be determined by the management so that the goals are reasonable but challenging so as to enhance performance.
Employee Satisfaction Surveys:
The base level of performance for this measure will be based on the survey results from previous years. Management should aim to enhance the workplace satisfaction by improving any areas of concern. The management will determine a certain benchmark for improvement and strive to increase the percentage of employees who rate the organisation five stars. An example of a base level of performance may be to increase employees that rate a certain aspect of the organisation five stars by 10%. The benchmark doesn’t have to be based on five stars. If management finds a certain are where there are major issues, it can start by setting a goal to increase the number of employees who rate the aspect three or four stars. The level of performance will be up the management’s discretion.
Volunteer Recruitment Ratio:
The level of performance will be based on the total number of certified doctors in Australia. Management should acknowledge that the percentage will be really small for this measure judging from the nature of the industry. Not many doctors will want to risk their lives for a moderate salary in a dangerous environment. MSF Australia will have to ask the government for the precise figures of certified doctors. By looking at the Australian Bureau of Statistics and assuming that 20% of the employees in the “Health care and social assistance” industry are doctors (the assumption is totally a guess), we would say that a reasonable measure would be around 0.07%. The measure is definitively inaccurate due to the lack of information provided. Our group would have to get a hold of the actual figures of certified doctors in Australia to figure out the acceptable base level that will be challenging yet achievable.
Departure‐Preparation Course Attendance ratio:
Base level of performance for this measure should be set at 100% judging from the importance of the pre-departure training.
Once again, all of the discussed base levels of performance are mere possibilities. Our group will need to access MSF Australia’s internal records and work with the management to set up the necessary base levels.
By Pavel Kachailov on May 9 2008, 18:03
Hi Olga,
Thanks for your comments.
A balance scorecard is usually used for profit organization but it does not mean that it cannot be used for non profit organization.
The main purpose of this competition is to collect possible KPIs that MSF Australia can use in real life. The reason why the lead indicators are mentioned is because they help to assess the feasibility of the KPI and also give an idea of cost effectiveness of each KPIs.
Thanks for your comments.
A balance scorecard is usually used for profit organization but it does not mean that it cannot be used for non profit organization.
The main purpose of this competition is to collect possible KPIs that MSF Australia can use in real life. The reason why the lead indicators are mentioned is because they help to assess the feasibility of the KPI and also give an idea of cost effectiveness of each KPIs.
By Ronny Ho Von on May 9 2008, 23:02
Hi Andrea and Katy,
We really appreciate your comments
We really appreciate your comments
By Ronny Ho Von on May 9 2008, 23:04
Hi Carlo! Thanks for reading over our report.
Most definitely there are more elements to public awareness, such as posters, word-of-mouth, and so forth. We have considered these elements as well. However, we have purposely omitted them because of the practicality issue. For example, how would you measure how many people actually looked at the posters and became aware of the global issues? We tried to figure out different ways to measure each of the possible areas and decided to neglect ones that did not seem to have direct practical methods of measurement. Also, some additional ideas of public awareness measurement lie within the fundraising technique expense ratio, since management can use the donation figures as a measure of awareness. Our group will be more than glad to discuss any other public awareness issues that you come up with. Since the area is really broad, it will be exciting to hear different creative methods of measurement that we would not have been able to come up with.
Cheers!
Most definitely there are more elements to public awareness, such as posters, word-of-mouth, and so forth. We have considered these elements as well. However, we have purposely omitted them because of the practicality issue. For example, how would you measure how many people actually looked at the posters and became aware of the global issues? We tried to figure out different ways to measure each of the possible areas and decided to neglect ones that did not seem to have direct practical methods of measurement. Also, some additional ideas of public awareness measurement lie within the fundraising technique expense ratio, since management can use the donation figures as a measure of awareness. Our group will be more than glad to discuss any other public awareness issues that you come up with. Since the area is really broad, it will be exciting to hear different creative methods of measurement that we would not have been able to come up with.
Cheers!
By Pavel Kachailov on May 9 2008, 23:07
Hi Olga,
Thank you for the comments. Just wanted to brush up on the aspects that my group mate has not mentioned.
I am sorry if you were offended by the fact that we exceeded the page limit by two pages. We could have divided the report up into two parts but felt that that would make it really hard for you to read. In fact, if you exclude the table of contents, introduction and the tables, our report would have been four pages. Since the previous winner of the challenge exceeded the page limit with one document, we knew that we could do the same. We only have one document anyways. Exceeding by a couple of pages should not be an issue.
We really felt the importance of identifying the lead factors as this demonstrates how MSF Australia will be able to act upon the KPIs to make a difference within the organization. It would be pointless to give a theoretical KPI that cannot be acted upon. For this reason, we chose the KPIs based on whether there were lead indicators associated with the factors.
I believe that there is a misunderstanding on the previous discussion on the volunteer recruitment ratio. I understand that you are referring to my response to Sam’s comment on how the ratio will sacrifice quality of staff recruited. The measure itself is definitely a QUANTITATIVE measure as it deals with numerical data. However, what I meant in the previous discussion was that, although the measure is quantitative, it does not endanger the quality of the staff recruited. Please reread the discussion if you are still confused.
Why would you say that the denominator for the volunteer recruitment ratio should be newly qualified doctors? Do you mean to say that MSF Australia only hires doctors that are newly qualified? I do not agree with the statement as the ratio will not be an accurate measure of the HR division’s performance since you are looking at only the newly qualified doctors. MSF Australia targets qualified doctors and not just the newly qualified ones. In fact, I would say that MSF Australia will try not to hire newly qualified doctors as they will be less experienced than the ones that have been qualified for some time.
The volunteer recruitment ratio specifically dwells on the medical volunteers and not on the non-medical staff for a reason. We chose to disregard the non-medical staff as the employment process for these employees does not constitute a key area of concern. Obviously, it is a lot easier for MSF Australia to hire volunteer managers, accountants and office workers than to hire doctors. This is because doctors have higher qualifications than other professions due to long years of exacting education. In addition, doctors will be reluctant to join MSF Australia as they will be sent to work in remote and hazardous areas. Since the objective of the report is to find the KPIs that will be most helpful for MSF Australia, we decided to concentrate on the medical staff.
Finally, I would like to point out that we have not included measures for the Project Unit as it plays a minor role in MSF Australia. From the annual report it is evident that MSF Australia’s key functions are non-operational (fundraising and recruitment). The purpose of the challenge was to find seven KPIs that will have a significant influence on MSF Australia’s performance. Why would you include a KPI that does not account for the major aspect of an organization? For this reason, we have not discussed the Project Unit.
Once again, thank you for taking the time to read over our report. I agree with you on the pre-departure training fact. I believe that more emphasis must be placed on the training. Hopefully, I will be able to read over your report and comment within the next two days.
Thank you for the comments. Just wanted to brush up on the aspects that my group mate has not mentioned.
I am sorry if you were offended by the fact that we exceeded the page limit by two pages. We could have divided the report up into two parts but felt that that would make it really hard for you to read. In fact, if you exclude the table of contents, introduction and the tables, our report would have been four pages. Since the previous winner of the challenge exceeded the page limit with one document, we knew that we could do the same. We only have one document anyways. Exceeding by a couple of pages should not be an issue.
We really felt the importance of identifying the lead factors as this demonstrates how MSF Australia will be able to act upon the KPIs to make a difference within the organization. It would be pointless to give a theoretical KPI that cannot be acted upon. For this reason, we chose the KPIs based on whether there were lead indicators associated with the factors.
I believe that there is a misunderstanding on the previous discussion on the volunteer recruitment ratio. I understand that you are referring to my response to Sam’s comment on how the ratio will sacrifice quality of staff recruited. The measure itself is definitely a QUANTITATIVE measure as it deals with numerical data. However, what I meant in the previous discussion was that, although the measure is quantitative, it does not endanger the quality of the staff recruited. Please reread the discussion if you are still confused.
Why would you say that the denominator for the volunteer recruitment ratio should be newly qualified doctors? Do you mean to say that MSF Australia only hires doctors that are newly qualified? I do not agree with the statement as the ratio will not be an accurate measure of the HR division’s performance since you are looking at only the newly qualified doctors. MSF Australia targets qualified doctors and not just the newly qualified ones. In fact, I would say that MSF Australia will try not to hire newly qualified doctors as they will be less experienced than the ones that have been qualified for some time.
The volunteer recruitment ratio specifically dwells on the medical volunteers and not on the non-medical staff for a reason. We chose to disregard the non-medical staff as the employment process for these employees does not constitute a key area of concern. Obviously, it is a lot easier for MSF Australia to hire volunteer managers, accountants and office workers than to hire doctors. This is because doctors have higher qualifications than other professions due to long years of exacting education. In addition, doctors will be reluctant to join MSF Australia as they will be sent to work in remote and hazardous areas. Since the objective of the report is to find the KPIs that will be most helpful for MSF Australia, we decided to concentrate on the medical staff.
Finally, I would like to point out that we have not included measures for the Project Unit as it plays a minor role in MSF Australia. From the annual report it is evident that MSF Australia’s key functions are non-operational (fundraising and recruitment). The purpose of the challenge was to find seven KPIs that will have a significant influence on MSF Australia’s performance. Why would you include a KPI that does not account for the major aspect of an organization? For this reason, we have not discussed the Project Unit.
Once again, thank you for taking the time to read over our report. I agree with you on the pre-departure training fact. I believe that more emphasis must be placed on the training. Hopefully, I will be able to read over your report and comment within the next two days.
By Pavel Kachailov on May 10 2008, 01:20
Hi guys,
Thanks for your responses to my questions. I would like to clarify some points.
When I commented on the balance scorecard you had used I referred to your particular adaptation of the Kaplan model for the MSFA. In my opinion, you did not sufficiently customise the model and causal linkages within the model to fit the MSFA’s mission and strategies. Probably, it is just a presentation/completeness issue. From the table you provided on p.3 it appears that the achievement of financial performance is the main goal for the MSFA. Obviously, you did not intend to imply that.
Discussion of the Volunteer Recruitment ratio – No, I did not mean that the MSFA should recruit only new doctors. On the contrary. The reason I suggested that the denominator refer to the newly qualified doctors is an improvement in measurement. This is better demonstrated by example. Assuming for example, if the ‘Total number of registered qualified doctors in Australia’ has been steady for several years, does it imply an increasing shortage of doctors? It does, but it has not been reflected in the number yet (i.e. the existing doctors will retire without being replaced). The number of new registrations has more informational content. The way I see it is that the Change in volunteer staff should be compared to the Change in resource pool (New recruits/New registrations).
Thanks for explaining why you are focusing on the medical doctors only. Your report mentioned this but not in a direct way. I still think that nurses and paramedics should be included as well.
I disagree that the Project Units plays a minor role in the MSF Australia’s performance. It may be small in size but it is very important and growing in importance. I quote from the latest annual report:
Toward more operational responsibilities
As already presented, field human resources is part of this necessary support. The second direct contribution towards field operations results from the medical support that MSF Australia is now able to provide with the Project Unit (p.12).
MSF Australia strengthened its ability to support operations over the year, with the development of the Project Unit as part of the operational directorate based in Paris, focusing on the quality of paediatric and obstetric care, as well as providing field support in those areas. This was a functional result of the move over the last few years for MSF Australia to GO BEYOND [emphasis added] its current essential tasks of providing high-quality field volunteers, significant financial support and communications back-up for operations (p.9).
It was certainly up to you to select which performance areas to focus upon (especially given a limit on the number of KPIs). I just wanted to underscore the significant role of the PU. Besides, a performance measurement system should look into the future. Since there are strategic plans in place to expand the MSFA’s involvement in field operations, the system should incorporate that.
Side note – I believe we are using the same management accounting textbook. Please remember to provide references next time when you use direct quotes.
Thanks for your responses to my questions. I would like to clarify some points.
When I commented on the balance scorecard you had used I referred to your particular adaptation of the Kaplan model for the MSFA. In my opinion, you did not sufficiently customise the model and causal linkages within the model to fit the MSFA’s mission and strategies. Probably, it is just a presentation/completeness issue. From the table you provided on p.3 it appears that the achievement of financial performance is the main goal for the MSFA. Obviously, you did not intend to imply that.
Discussion of the Volunteer Recruitment ratio – No, I did not mean that the MSFA should recruit only new doctors. On the contrary. The reason I suggested that the denominator refer to the newly qualified doctors is an improvement in measurement. This is better demonstrated by example. Assuming for example, if the ‘Total number of registered qualified doctors in Australia’ has been steady for several years, does it imply an increasing shortage of doctors? It does, but it has not been reflected in the number yet (i.e. the existing doctors will retire without being replaced). The number of new registrations has more informational content. The way I see it is that the Change in volunteer staff should be compared to the Change in resource pool (New recruits/New registrations).
Thanks for explaining why you are focusing on the medical doctors only. Your report mentioned this but not in a direct way. I still think that nurses and paramedics should be included as well.
I disagree that the Project Units plays a minor role in the MSF Australia’s performance. It may be small in size but it is very important and growing in importance. I quote from the latest annual report:
Toward more operational responsibilities
As already presented, field human resources is part of this necessary support. The second direct contribution towards field operations results from the medical support that MSF Australia is now able to provide with the Project Unit (p.12).
MSF Australia strengthened its ability to support operations over the year, with the development of the Project Unit as part of the operational directorate based in Paris, focusing on the quality of paediatric and obstetric care, as well as providing field support in those areas. This was a functional result of the move over the last few years for MSF Australia to GO BEYOND [emphasis added] its current essential tasks of providing high-quality field volunteers, significant financial support and communications back-up for operations (p.9).
It was certainly up to you to select which performance areas to focus upon (especially given a limit on the number of KPIs). I just wanted to underscore the significant role of the PU. Besides, a performance measurement system should look into the future. Since there are strategic plans in place to expand the MSFA’s involvement in field operations, the system should incorporate that.
Side note – I believe we are using the same management accounting textbook. Please remember to provide references next time when you use direct quotes.
By Olga Ryabova on May 10 2008, 17:39
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