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Performance management requires property management partnerships

By Brian Clark

Performance management requires property management

Brian Clark (centre) was an AUSCLEAN 2010 seminar speaker. He is pictured with Melbourne contractor executives, Danihers' Charlie Adams and Bronwyn Byng

There’s an old adage that you only get what you pay for, and nothing can be truer when it comes to contract cleaning. Lack of entry barriers to our industry has brought about intense competition and questionable practices that, in turn, have led to a decline in the professionalism and profitability of the industry and spiralling service standards.
Falling standards are the inevitable consequence of cleaning to a price and it has significantly increased risk for facility managers and building owners. What could transform the industry is a move to accountability, transparency and objectivity through ongoing performance management based service contracts.
Pricing and profitability of contract cleaning services is constantly being driven downwards, yet dissatisfaction with cleaning has risen dramatically along with a rapidly declining perception of the professionalism and integrity of the industry.
Risk mitigation has fuelled a need for accountability and transparency of building service contracts and facility managers are now demanding to know what actually goes on in cleaning operations. Increased awareness of risk and the requirement for well documented processes, along with adequate consideration for environmental impact and the need to adequately address OH&S, risk management and sustainable work practices have become critical components of cleaning contracts and have given rise to the introduction of comprehensive contract performance management.
While some contractors may resist it, a more prescriptive approach will provide measurable outcomes and could mean the end of the industry price spiral.
Part of the problem is a lack of understanding of the business of cleaning by property managers, and indeed, some contract cleaning companies. Property managers need to manage risks and establish value for money and balance the increasing need to minimise environmental impact and provide a safe and productive environment for their tenants.
However, they cannot be absolved of the blame for the poor standards that they often receive. Churn and burn tendering processes award tenders at unsustainable prices, often with disregard for the new modern award. This price based tendering system inevitability condones questionable work practices including unrealistic productivity rates; a disregard for staff and public safety (which contributes to breaches of OH&S); disregard for environmental best practice; and the overlooking of pyramid sub-contracting which may or may not include cash payments and illegal employment practices.
There’s an old saying that you can’t manage what you can’t measure, but how do you measure an intangible service, such as cleaning?  Performance management incorporates the introduction of exacting specifications for cleaning coupled with key performance measures (KPMs) for tasks, equipment, environmental performance, safety and training which, in turn, are audited to provide measurement through key performance indicators (KPIs). This ensures that there is a framework in place that accurately describes the work to be performed and how outcomes will be measured and quantified.
Contract specifications are engineered with comprehensive description of the services to be delivered and key performance indicators and contracts are quantified with realistic values prior to tender. This enables clients to quantify if a tenderer is financially able to meet the contract requirements. Building owners are able to identify and correct inefficiencies, determine labour requirements and ensure maximum life of assets by accurately specifying the tasks and frequencies that are performed relative to the needs of the client, building use and floorcovering manufacturers’ recommendations.
Exacting sustainability specs
Performance management also enables the construction of exacting sustainability specifications with key performance criteria into cleaning contracts in line with sustainable purchasing guidelines for building management and tenant property services.
Performance management systems can also provide contractor performance benchmarking which can be compared to similar properties and contracts. The contractor is penalised for poor performance, but is awarded for service excellence through performance drivers and reward systems that include automatic contract extensions. According to one of the primary drivers of performance management in this industry, Changing Direction Pty Ltd, there are examples of performance managed contracts that have had the same contractor for 12 years!
The upside for the industry is that only companies with the capabilities to perform the work will be able to quote on major contracts. The focus will shift away from lowest price to quality of service and the increased awareness of risk and the requirement for well documented and more transparent processes with a non-adversarial relationship between building management and contractor.
Rewards, such as contract extensions and better management practices, will flow through the company and into other contracts, making for a more profitable and sustainable business and a more profitable and sustainable industry with longer contracts, sustainable business practices, sustainable workplaces and the elimination of illegal subcontracting.
The downside of performance management is that it is more difficult and more costly to quote on larger contracts and that everything is visible, even profit levels. There would also be a requirement for electronic compliance monitoring and external auditing with regular reporting on adherence to the contract.
The ideal outcome of correctly constructed processes is a stronger partnership with the service provider, improved service delivery and most importantly greater value for money. These processes also provide a defensible position to support management decision to engage a particular contractor and provide clients with an independent mechanism to bring any service shortfall out in the open and to work with the provider to rectify the problems in a way that is not seen as adversarial or one sided.
The cleaning industry is an industry that needs change, but that change will not come from within. The adoption of contract performance management practices will certainly drive that change – change that is sorely needed for the betterment of the industry.

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