# Presentation: 560808

## Criteria Overview

***Criteria Overview***

**Malcolm Baldrige****National Quality Award**

## The Criteria for Performance

*** ******Excellence***

- Are the foundation of the Baldrige National Quality Program
- Define performance excellence
- Are globally recognized
- Can be used by diverse organizations

**Notes:**
The Criteria for Performance Excellence are the foundation of the Baldrige National Quality Program. For more than 19 years, the Criteria have played a significant role in strengthening U.S. competitiveness. Now in Business/Nonprofit, Education, and Health Care versions, they are the basis for
conducting organizational self-assessments
making awards to recognize the achievements of organizations that have improved performance in the critical factors that drive their success
providing feedback to applicants for the Baldrige Award
stimulating the improvement of performance practices and capabilities
communicating and sharing best practice information among U.S. organizations of all types
understanding and managing for performance excellence and for guiding planning
The Criteria are a de facto definition of performance excellence. They are intended to be at the “leading edge of validated management practice.” 
They are a globally recognized model of performance excellence. There are 41 state, regional, and local quality programs, with 35 states reporting as part of the Alliance for Performance Excellence. Additionally, 76 international programs are based on the Baldrige Criteria.
The Criteria are used by diverse types of organizations (regardless of whether or not they plan to apply for the Baldrige Award): small and large, service and manufacturing, education and health care, for-profit and nonprofit, and private- and public-sector organizations. 

## What Are the Criteria?

- A set of expectations or requirements
- A structured approach to performance improvement
- A framework for a systems view of performance management

**Notes:**
Expectations
The Criteria are a set of expectations or requirements. 
They define the critical factors that drive organizational success. 
Structured Approach
The Criteria comprise seven Categories. 
Distributed across the Categories are 18 Items, each focusing on a major requirement. 
Within each Item, there is one or more Area(s) to Address containing specific requirements related to the Item.
Framework
The Criteria constitute a framework for understanding 
a systems view of performance management 
the key components of a performance management system 
the relationships among the components 
The Criteria emphasize the alignment of key components of the performance management system.

## Basic Goals of the Criteria

- delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability
- improvement of overall organizational  effectiveness and capabilities
- organizational and personal learning

- To help organizations enhance their performance by focusing on

**Notes:**
The Criteria are designed to help organizations use an integrated approach to organizational performance management that results in
delivery of ever-improving value to customers and stakeholders, contributing to organizational sustainability                
improvement of overall organizational effectiveness and capabilities
organizational and personal learning
Value refers to the perceived worth of a product, service, process, asset, or function relative to cost and to possible alternatives. Organizations frequently use value considerations to determine the benefits of various options relative to their costs, such as the value of various product and service combinations to customers.
Performance refers to output results obtained from processes, products, and services that permit evaluation and comparison relative to goals, standards, past results, and other organizations. Performance can be expressed in financial and nonfinancial terms.
	Six types of organizational performance are addressed in the Criteria for Performance Excellence: (1) product and service outcomes, (2) customer-focused results, (3) financial and market results, (4) human resource results, (5) organizational effectiveness results, and (6) leadership and social responsibility results.
The Education and Health Care Criteria focus on parallel sector-related results.
Organizational learning includes both continuous improvement of existing approaches and adaptation to change, leading to new goals and/or approaches.
Personal learning is achieved through education, training, and developmental opportunities that further individual growth and can result in (1) more satisfied and versatile employees who stay with the organization, (2) organizational cross-functional learning, and (3) an improved environment for innovation.

## Criteria Purposes

- To help improve organizational performance practices, capabilities, and results
- To facilitate communication and sharing of best practices
- To serve as a tool for understanding and managing performance

**Notes:**
Performance Practices, Capabilities, and Results
The Criteria help improve performance practices and capabilities—as well as results—by providing a set of interrelated Core Values and Concepts that are modeled on the behaviors found in high-performing organizations. They also provide a framework to help organizations to assess their performance and growth and to plan for the future.
Communication and Sharing
By providing a common language, the Criteria help U.S. organizations of all types communicate and share information on best practices. They offer a common set of requirements that facilitate comparisons and benchmarking, and they describe a system for overall organizational performance alignment.
Performance Improvement Tool
The Criteria are a tool to
identify strengths and target opportunities for improving processes and results affecting key stakeholders, including customers, employees, owners, suppliers, partners, collaborators, and the public
allocate resources to improve communication, productivity, and effectiveness and achieve the organization’s goals
Many Award recipients state that their greatest rate of improvement occurred the year after receiving the Award.

## Criteria Background

- Created in a consensus-building process with the community
- Reviewed and updated regularly
- Validated

**Notes:**
Creation
The Criteria were created in 1987 with significant input from a diverse group of experts and practitioners.
The development process included a review of state-of-the-art practices within private- and public-sector organizations that were working on continuous improvement and organizational excellence.
Review and Modification
In 1995, legislation was authorized to add Criteria for education and health care organizations. In 2006, the Criteria were revised to include nonprofit organizations.
The Criteria are updated with input from all sectors, including all participants in the Baldrige Program: current and former members of the Board of Examiners, Award applicants, and members of the Panel of Judges and the Board of Overseers.
The Criteria are improved regularly to enhance coverage of strategy-driven performance, address the needs of all stakeholders, accommodate important changes in organizational needs and practices, and respond to evolving challenges for defining excellence.
The improvement process includes a formal Improvement Day, which involves all stakeholders.
An open-door policy also exists for Criteria input at any time from any stakeholder.
Validation
Award recipients and other Criteria users validate the effectiveness of the framework through correlation among use, scoring, and performance results.

## Criteria Evolution

- Continuously improved to
- focus on key areas of performance
- best stimulate competitive success
- emphasize and improve linkages
- increase ease of use and broaden the user base

**Notes:**
The Criteria have evolved through changes in content, emphasis, detail, and Core Values and Concepts. Key improvements include the following:
The key requirements are continually updated to reflect the “leading edge of validated management practice.”
The key requirements continue to be tightened and synthesized.
The linkages among the Organizational Profile, Process Items, and Results Items continue to be emphasized and strengthened.
The evaluation of Process Items includes four factors: approach, deployment, learning, and integration.
The Criteria have been streamlined to focus on the key areas of organizational performance.
The Organizational Profile was added to set the context for the way the organization operates.
The language continues to be clarified and simplified to increase applicability to all sectors.
Item Notes with specific guidance for nonprofit organizations are italicized, setting them off from regular text.

## Criteria—Key Characteristics

- Focus on results
- Are nonprescriptive and adaptable
- Support a systems perspective
- Support goal-based diagnosis

**Notes:**
Focus on Key Results: An organization’s performance measurements need to focus on key results. The Business Criteria focus on six key areas: (1) product and service outcomes, (2) customer-focused outcomes, (3) financial and market outcomes, (4) workforce outcomes, (5) process effectiveness outcomes (including internal operational performance measures), and (6) leadership and social responsibility outcomes. 
The Education and Health Criteria focus on parallel sector-related results.
Nonprescriptive: The Criteria do not prescribe
that an organization should or should not have departments for quality, planning, or other functions
how the organization should be structured
that different units in an organization should be managed in the same way
The focus is on results, not on procedures, tools, or organizational structure. Organizations are encouraged to develop and demonstrate creative, adaptive, and flexible approaches for meeting basic requirements.
Systems Perspective: The systems perspective to goal alignment is embedded in the integrated structure of the Core Values and Concepts, the Organizational Profile, the Criteria, and the results-oriented, cause-effect linkages among the Criteria Items. Using a systems perspective means managing the entire enterprise, as well as its components, to achieve success.
Goal-based Diagnosis: The Criteria and Scoring Guidelines comprise a two-part diagnostic (assessment) system. The Criteria are a set of 18 performance-oriented requirements. The Scoring Guidelines spell out the assessment dimensions (Process and Results) and the key factors used to assess each dimension. Assessments provide a profile of strengths and opportunities for improvement relative to the 18 basic requirements.

## Getting Started

- Use the Criteria as a source of information
- Learn about the benefits of using the Criteria and other Baldrige tools for self-assessment
- Use the tools and approaches to begin a self-assessment

**Notes:**
The Criteria
You don’t have to wait until you are ready to apply for the Baldrige Award to begin using the Baldrige Criteria for Performance Excellence. In fact, most organizations begin by using the Criteria for self-assessment and action planning. 
The Criteria can be used to gain information, to build a common language, and to facilitate communication.

Benefits of Self-Assessment
There are many reasons for undertaking a Baldrige self-assessment:
Your customers, competitors, or budget are driving the need to change.
Your environment is changing.
Your organization is among the best, and you want to make sure that you stay that way.

Using the Baldrige Criteria for self-assessment can help your organization to
jump-start change initiatives
energize improvement initiatives
focus your organization on common goals
assess performance against the competition
align your resources with your strategic objectives

## Tools for Getting Started in Self-Assessment

- The *Getting Started* brochure
*Easy Insight: Take a First Step Toward a Baldrige Self-Assessment* (formerly e-baldrige)
*Are We Making Progress? *and* Are We Making Progress as Leaders? *questionnaires
- Writing the Organizational Profile
- Criteria Item questions

**Notes:**

Tools for Self-Assessment
The Baldrige Program offers several tools for self-assessment and for getting started with the Criteria:
The Getting Started brochure offers details about self-assessment tools, steps in the performance excellence journey, and information on state and local quality programs.
Easy Insight is an online assessment tool that will help you to identify gaps in your understanding of your organization and will allow you to compare your organization to others.
Writing the Organizational Profile and identifying questions that you may be unable to answer is the first step in undertaking a full self-assessment using the Baldrige Criteria. 
The 18 Criteria Item questions are a first, high-level view of a systems perspective and can be answered using the Criteria details as a “mentoring guide.” 
Additional tools include the Are We Making Progress? and Are We Making Progress as Leaders? questionnaires. 

## Are We Making Progress?

- Structured as an easy-to-use questionnaire that helps improve communication and identify areas to improve
- Can be used with a subset of employeesor with all employees
- Organized according to the seven Baldrige Categories
- Available in English and Spanish

**Notes:**
The Baldrige National Quality Program developed a short, easy-to-use questionnaire for all employees, called Are We Making Progress?, to help organizations assess how they are performing and learn what can be improved.
How do organizations know  
if their vision, mission, values, and plans are being deployed?
if they are understood by the leadership team?
if they are understood by all employees?
if their communications are effective?
if their message is being well received? 
if they are making progress in achieving their strategic objectives?
One way to find the answers to these questions is to ask employees. This questionnaire can be a tool for improved communication throughout an organization, as well as for identifying and improving performance. You can modify the 40 questions to address the specific needs or language of your organization.
The questionnaire can be used with all levels of employees. Depending on their needs, organizations can distribute the questionnaire to a subset of their employees or to all employees. 
Organized according to the seven Criteria Categories, the questionnaire can help organizations focus their improvement and communication efforts on areas needing the most attention.

## Are We Making Progress?

**Questionnaire Example:**
- Category 2: Strategic Planning
- 2a  As it plans for the future, my organization 	asks for my ideas.
- 2b  I know the parts of my organization’s plans 	that will affect me and my work.
- 2c  I know how to tell if we are making progress 	on my work group’s part of the plan.

**Notes:**
Here is a sample of the statements in Are We Making Progress? These relate to Category 2 of the Baldrige Criteria, Strategic Planning.
On the questionnaire, each statement is followed by five boxes labeled in this order: “strongly disagree,” “disagree,” “neither agree nor disagree,” “agree,” and “strongly agree.” The employee is asked to check the box that best matches how he or she feels about the statement. 
The first question relates to Strategy Development (Item 2.1 in the Criteria), and the next two relate to Strategy Deployment (Item 2.2), including tracking progress on action plans.
As you can see, the focus is on the employee—the employee’s role in the strategic planning process, his or her understanding of it, and how the process directly affects him or her.
In this example, if responses to the strategic planning area indicate a need for improvement, organizations can find more specific information by turning to Category 2 in the Criteria for Performance Excellence booklet.

## Are We Making Progress As Leaders?

- Created as a companion document for assessing an organization’s performance from the leaders’ point of view
- Complements *Are We Making Progress?*
- Provides an opportunity to compare the perceptions of the leadership team with those of employees

**Notes:**
This parallel tool asks questions similar to those asked in Are We Making Progress? but its target audience is the organization’s leadership. 
It can be used as a stand-alone tool or in conjunction with the Are We Making Progress? questionnaire. With responses to both questionnaires, you’ll be able to compare perceptions from both the leadership’s and employees’ points of view, improve communication, and identify and improve performance.
You can modify the 40 questions—in both questionnaires—to address your organization’s specific needs or language.
The questionnaire also follows the seven Criteria Categories, which can facilitate your organization’s ability to focus communication and improvement efforts on areas needing the most attention.

## The Scoring System

- Scoring Guidelines
- Importance to the applicant’s organization
- Two dimensions
- Process
- Results

**Notes:**
Examiners use the Scoring Guidelines to determine the applicant’s score on each Item of the Criteria. The Scoring Guidelines, which are an anchored rating scale, allow Examiners to consider what is important to the applicant’s organization and to assess the applicant on two evaluation dimensions: process and results.
The Scoring Guidelines are available to applicants, so they can become familiar with the tool Examiners will use to evaluate and score their applications. Additionally, any organization may use the Scoring Guidelines for its own self-assessment.
Baldrige evaluations, scoring, and feedback consider applicants’ responses to the Baldrige Criteria in light of their environment, key working relationships, and strategic challenges. 

## Process Evaluation

**Process** comprises four elements
**Approach**
**Deployment**
**Learning**
**Integration**

**Notes:**
The scoring of responses to Criteria Items and Award applicant feedback is based on two evaluation dimensions: (1) Process and (2) Results. Criteria users need to furnish information relating to both. A further look at the two dimensions follows.

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 Item requirements relevant and important to  your organization
your approach is applied consistently
your approach is used by all appropriate work units 
Learning refers to 
 refining your approach through cycles of evaluation and improvement
encouraging breakthrough change to your approach through innovation
sharing of refinements and innovation with other relevant work units and 	processes in your organization
Integration refers to the extent to which
your approach is aligned with your organizational needs as identified in other Criteria Item requirements
 your measures, information, and improvement systems are complementary across      processes and work units
 your plans, processes, results, analyses, learning, and actions are harmonized across     processes and work units to support organization-wide goals

## Results Evaluation

**Results** refers to your organization’s outputs and outcomes in achieving the requirements in Items 7.1–7.6.

**Notes:**
The four factors used to evaluate results are
your current level of performance
the rate (i.e., slope of trend line) and breadth (i.e., how widely deployed and shared) of your performance improvements 
your performance relative to appropriate comparisons and/or benchmarks
the linkage of results measures (often through segmentation) to important performance requirements identified in the Organizational Profile and in the Process Items

## 1995 Average Category Scores

- 20

- 30

- 40

- 50

- 60

- 70

-  Leadership

- Information & Analysis

- Strategic Planning

- HR Development & Management

- Process Management

- Performance Results

- Customer Focus & Satisfaction

**Categories**

**Percent Score**

- Service

- Health Care

- Education

***1995 Average Category Scores***

**Notes:**
We have collected some data since introducing the Baldrige Award to the education and health care sectors. This slide shows a comparison of scores from the 1995 pilot, the first year the Education and Health Care Criteria were available. 
As shown in the legend, this graphic displays the average Category scores for service, health care, and education applicants. The percent score is on the vertical axis and the seven Categories appear across the horizontal axis. The titles and order of the Categories shown here are for the 1995 Criteria, which were different from the current Criteria.
You can see a similarity in the patterns of the three lines. In all three sectors, Leadership and Human Resources have higher average scores while Information and Analysis and Performance Results have greater opportunities for improvement.
This slide depicts the difference in maturity of the three types of organizations. Education and health care were, on average, in the 20 to 40 percent range. In contrast, service organizations scored in the 40 to 60 percent range. These differences were not unexpected. We anticipated that education and health care scores would rise over time as organizations matured. 

##   2006 Average Category Scores

-  30

-  40

-  60

-  Leadership

-    Strategic Planning

- Customer and Market Focus

- Measurement, Analysis, and
- Knowledge Management

- Human Resource Focus

-    Process Management

-          Results

**Categories**** **

**Percent Score**

**Service**

***  ******2006 Average Category Scores***

** ****Nonprofit**

**Education**

-   50

-  70

**Health Care**

**Notes:**
This graph presents the average Category scores for the 2006 applicants. The Categories are listed in the new order, so it makes comparison to 1995 a bit awkward.
In 2006 we added scores from the nonprofit pilot, as well.
You can see a similarity in the patterns of the four lines. In all sectors, Results have greater opportunities for improvement.
While the absolute average scores for the Categories show differences sometimes approaching 10 percent among sectors, these differences are not considered statistically significant.
One factor influencing the average Category score within each sector is the number of applicants who are early in their journey toward performance excellence. In 1995, education and health care were new sectors, with larger proportions of applicants in the early stages of their quality journey. In the 11 years since, with seven Education Award recipients and six Health Care Award recipients, these sectors are closing the scoring gaps with the business sector and sharing more and more best practices.
In 2006, one of four service-sector applicants went on to site visit, while three of sixteen education applicants, six of forty-five health care applicants, and two of ten nonprofit applicants went on to site visit.

## Baldrige and the Nonprofit Sector

- Nonprofit category funded late November 2005
- Nonprofit pilot program offered in 2006
- Nonprofit competition launched in 2007

**Notes:**
The year 2007 is an exciting time for the Baldrige Program, with the legislation in November 2005 providing funding for the expansion of the Baldrige Program to include nonprofit organizations.
Many in the nonprofit community had already been using the Criteria on their performance excellence journeys.
The language of the 2006 Criteria was adjusted to be sensitive to nonprofit organizations. For example, the Criteria now address competition and collaboration, employees and volunteers, customers and stakeholders, financial returns and budget performance, and products and programs. Specific guidance for nonprofit organizations has been added to many Item Notes in italicized text. 
In 2006, the Baldrige Program ran a nonprofit pilot program limited to top-tier state and local award recipients. Applicants in the pilot participated in the full Baldrige review process, and two were selected for site visits. All applicants received feedback on strengths and opportunities for improvement, but no Awards were given to the pilot participants.
An Award competition is offered for nonprofit organizations—in addition to manufacturing, service, small business, education, and health care organizations—in 2007.

## Resources for More Information

- Most Baldrige National Quality Program (BNQP) documents are available both in hard copy and on the BNQP Web site.
- To obtain these documents, call (301) 975-2036 or visit **www.baldrige.nist.gov.**