BSBSUS501 - Online Study Guide

Online Study Guide
AIC_BSBSUS501_OS V1.0 1
IBSA Student workbook p.61 p.98
Once the implementation stage is completed, there is
still an important step that needs to be completed; the
level of success (or otherwise) of the policy needs to be
determined . Reviewing the efficacy of implementation
can help to identify areas of policy or performance that
need to be modified. This review stage can ensure that
the policy is correctly applied and will maximise the
success of your policy.
The focus of this section is on the skills and knowledge
required to review the implementation of workplace
sustainability policy.
To undertake an effective review of sustainability
policy initiatives, you will need to gather data from
various sources or using methods as outlined in
your monitoring strategy. You will then need to
examine the data for important trends or variations
from performance targets. These may indicate
success or failure of sustainability initiatives or
issues regarding key drivers of organisational
performance.
Variance is commonly
Trends measured in two ways:
the absolute size of the
variance
A trend is a linear positive or
the percentage analysis:
negative change over time:
Variance
A trend is a linear positive or negative change
over time. Trends are usually easier to spot when
presented as line charts. Consider an example
of electricity and paper usage at Australian
Hardware:
Electricity & Paper Usage
$3,500
$3,000
$2,500
$2,000
Electricity
$1,500 Paper
$1,000
$500
$-
Jan Feb Mar Apr May
From the chart above, it is clear from the negative
(downward) slopes of the lines that the
organisation has reduced and is continuing to
reduce expenditure on electricity and paper.
It is also evident that electricity spending is falling
more rapidly than paper expenditure.
Whether this is a matter for concern, depends on
the goals the organisation has for resource use.
In addition, you may be able to anticipate - in
cases of shortfalls in sustainability performance -
that the organisation will have the opportunity to
correct performance to meet targets in the near
future; the performance issue, may just need time
to work itself out.
You will need to carefully examine sustainability
data to discover trends and indications of
sustainability performance levels and use common
sense or appropriate techniques to interpret the
significance of trends and make decisions or
recommendations on how to manage resources in
response to positive or negative trends .
As part of reviewing performance, you should
review actual performance compared to
performance targets.
Calculating variance is a useful way to determine
how close you are to achieving targets. Variance
looks at how the organisation is performing to
determine if there is a 'gap' between actual results
and set targets.
Variance is commonly measured in two ways:
1. The absolute size of the variance in the units that
resource usage is measured (in the example below, the
number of kilolitres that were over or under the target
level; shown in the column 'kilolitre variance') .
2. The percentage analysis, where the absolute size of
the variance (in the example below, absolute variance is
shown in the column 'kilolitre variance') is divided by the
target amount. The percentage analysis allows for
comparison of different areas of organisational
performance - performance in different areas, measured
in different units, on different scales - using percentage
variance as a standard measure.
Below is an example of a resource use variance
report based on the sustainability performance at
the Australian Hardware Wollongong garden
centre. Note that the target reduces in the second
year. This is because the centre's target is to
reduce water use by 10% annually .
Actual kilolitres
Resources Month Target (kilolitres) % Variance
(kilolitres) variance
Water (Year 1) January 192 195 3 1.60%
February 192 194 2 1.00%
March 192 192 0 0.00%
April 192 190 -2 -1.00%
May 192 189 -3 -1.60%
June 192 185 -7 -3.60%
July 192 188 -4 -2.00%
August 192 183 -9 -4.70%
September 192 180 -12 -6.30%
October 192 185 -7 -3.60%
November 192 189 -3 -1.60%
December 192 189 -3 -1.60%
Water (Year 2) January 174 190 16 9.20%
February 174 180 6 3.40%
March 174 176 2 1.10%
April 174 170 -4 -2.30%
May 174 160 -14 -8.00%
June 174 172 -2 -1.10%
July 174 169 -5 -2.90%
August 174 170 -4 -2.30%
September 174 173 -1 -0.60%
October 174 173 -1 -0.60%
November 174 176 2 1.10%
December 174 178 4 2.30%
After you have determined variation, you can
evaluate this information by examining the
variance of actual performance to target or
benchmark performance, considering the size of
the variation, and, if the gap is significant, by
determining reasonable ways to close the gap,
considering the specific needs and goals of the
organisation.
A useful way of presenting performance variance
information is by creating a variation chart. Such a
chart is often used to supplement a variance
report. Using these charts allows a viewer to more
easily identify and highlight trends.
Kilolitres
145
155
165
175
185
195
205
215
January
February
March
April
May
June
July
Water (Year 1)
August
September
October
November
December
January
February
March
April
Water use
May
June
July
Water (Year 2)
August
September
AIC_BSBSUS501_OS V1.0
October
November
December
Actual (kilolitres)
Target (kilolitres)
17
Note that variance should always be reduced if
possible. Negative variance is always bad; however,
positive variance, while often a welcome surprise, may
indicate that something is wrong with the managerial
process of efficiency target setting. This chart shows,
for example, that variance tends to be favourable in
the periods between May and August and
unfavourable around December and January;
demonstrating a seasonal pattern in water use. It
would probably be more useful in future years for
Australian Hardware to adjust their targets to reflect
seasonal water requirements.
In management theory, low variances in measures of
a production means that a process is under 'statistical
control', and, as such, causes of poor performance
may be easier to identify, for example, when there is a
sudden spike in water usage at a point in time. If there
are many spikes and troughs, a possible cause such
as poor training of new workers may not be
immediately apparent.
In addition, when performance is poor but stable, it is
easier to work methodically to attempt improvements
to the production system and gather useful information
on effectiveness. For example, you may introduce a
short re-training program and then watch for a general
performance improvement. Again, when performance
is up and down, performance improvements are
harder to notice or demonstrate to senior
management. Moreover, very random processes often
display misleading patterns, which may be over-
interpreted and acted upon as something significant.
You are required to complete Week 1 practice
question Identify trends and variance from
targets
Solution will be available next week.
AIC_FNSACC507A_CK V1.0 22
The performance report may take various forms
but the main features of the report will not change.
They will show actual, budget and variance for
both the current period and the progressive totals,
that is the cumulative total from the beginning of
the first period.
Note the use of U and F after variances to
denote Unfavourable and Favourable variances.
Remember that the criterion for deciding whether
a variance is favourable or unfavourable is its
effect on profit. If the variance involves more profit,
the variance is favourable, if the variance reflects
less profit, the variance is unfavourable. Thus, if
actual expenses are greater than budget, the
variance is unfavourable, because 'more
expenses' means 'less profit'.
Performance Reports should be:
prepared promptly, that is, as soon as possible after the event.
Any delay in providing the information on variances to
management drastically reduces the effectiveness of the
information.
designed with the user in mind. They should be as simple and
informative as possible and should take account of the fact
that the manager who uses the report may not be a trained
accountant. The user should be involved in the design of the
reports.
designed to highlight only those variances which are
controllable by the manager. Only key variances should be
highlighted otherwise important information can be lost in a
mass of unimportant detail.
issued frequently and for comparatively short periods of
time, that is weekly or even daily for key items rather than
monthly or quarterly. This will enable managers to take
prompt corrective action.
the trigger for action by management. If corrective action
by management does not follow the issue of an adverse
performance report, it is difficult to justify the time and
cost of these reports.
prepared for an area of individual management
responsibility, that is a section or department for which
one manager is responsible. It is vital that responsibility
for explanation of variances is established.
Typical variance reporting will compare actual to
budget and create a dollar variance value($ Var.)
to the budget and a percentage variance value(%
Var.) to it as well. These two variances highlight
areas that need to be investigated for possible
corrective action.
Reports that cover a period of time may also have
a year to date (YTD) section that covers the same
columns as the monthly report, except that the
data is the cumulative total to this date.
Furthermore, some organisations will also include
variance reporting that compares actual results
with last year's results.
So, while variances to budgets are used as a
management tool to assist internal decision
makers in determining what course of action to
take, variance to last year is a performance gauge
that informs external stakeholders of the
improvements or otherwise in the firm's financial
position.
1. High Priority company policy
2. Largest unfavourable $ Var.
3. Greatest unfavourable % Var.
4. Unfavourable trend
5. Favourable high $ and % Var.
question Variance report
In order to satisfy organisational requirements,
you may need to present progress reports on
implementation or sustainability performance data
or recommendations in the form of formal
management reports. To win support for
recommendations, you will need to understand the
purpose of your reporting, requirements of your
audience. You will also need to adhere to the
organisation's formatting requirements.
Reporting your progress to management is
important. Your communication should link
initiatives to the sustainability targets you have
identified, and clearly show performance against
targets. You should also ensure that you are
choosing the best method of presenting the
findings from your review.
There are several types of charts to visually
present sustainability performance data and
highlight significant trends. These include:
Pie charts
Bar charts
Line charts
Pie charts are used to show demonstrate
proportions of a data set. For example, what
proportion of the budget is allocated to each major
area of expense? They are generally used to
capture data at a point in time.
In a sustainability context, pie charts can be useful
for identifying the processes or elements within a
business that are using the most resources (such
as water, energy, etc.). Let's look at an example.
Waste generated by a caf
15%
5% 35%
Food scraps
Plastic packaging
Cardboard
Spoiled food
45%
Bar charts are useful for displaying frequency or
number of instances of categories. Bars
themselves may be broken down to show relative
composition or percentages.
Product Sales
1800
1600
Product Sales
1400
Renewable or
recyclable products
1200
1000
800
600 Product Sales Non-

renewable or
400 recyclable products
200
As we have seen, line charts are useful for
identifying trends. They are also useful for
correlating peaks in consumption with time and
other activities, and are generally used when
evaluating sustainability over a period of time.
Electricity & Paper Usage
$3,500
$3,000
$2,500
$2,000
Electricity
$1,500 Paper
$1,000
$500
$-
Jan Feb Mar Apr May
question Access and review example
sustainability reports
To communicate data in a way that will promote
understanding among stakeholders, you should
develop skills to present data effectively. There are
many variations on how to present data, and
organisations all have different ways of presenting
data, but your job will be to determine how to
present the data so that it quickly and clearly
conveys relevant trends .
For example, compare the information in the
following two charts. These charts both show
sales data from the same company. Which chart
provides you with more information?
What can you learn from each chart?
Product sales
2500
2000
1500
1000
500
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun
Product Sales
1800
1600
Product Sales
1400
Renewable or
recyclable products
1200
1000
800
600 Product Sales Non-

renewable or
400 recyclable products
200
The first chart shows that total sales are trending
upwards for the year. This information may be helpful
for a manager or finance officer who wants to quickly
determine how well products are selling, including
green products .
The second chart shows that while sales are
increasing generally, consumers are moving towards
buying more sustainable products and sales of non-
recyclable and non-renewable products are
decreasing. This information shows how consumers
are making choices around buying more sustainable
products
It is important to present data in a clear way and in a
way that will help stakeholders understand what the
data shows. You may have to present information
differently depending on who will see it. For example,
you may be able to present complicated information
to management because they are more familiar with
organisational operations. At a team meeting with new
recruits, you might have to break that same
information up into several charts so that you don't
overwhelm them with unfamiliar information.
Progress reports:
facilitate regular
reporting:
to senior managers
provide ongoing
feedback on
performance to
responsible persons
help trigger
remedial action.
Implementation and monitoring strategies for
sustainability policy and initiatives may require
regular reporting to senior management to provide
feedback, keep them informed and to trigger
remedial action should it be necessary to keep
plans on track.
Reports generally
contain four parts:
executive summary
discussion and
presentation of
evaluation data
conclusions
recommendations for
action or change.
In order to satisfy organisational requirements,
you may need to present sustainability
performance data or recommendations in the form
of formal management reports or formal or
informal feedback to responsible persons. To win
support for recommendations, you will need to
understand the purpose of your report,
requirements of your audience. You will also need
to adhere to the organisations formatting
requirements.
Many organisations will require you to present
sustainability performance data or
recommendations in the form of management
reports. Reports may differ from organisation to
organisation, but a formal report will generally
contain four parts:
Executive summary
Discussion and presentation of evaluation data
Conclusions
Recommendations for action or change
Different readers will have different priorities and
areas of interest. An advantage of a report is that it
follows a standardised and structured format that
enables the reader to navigate to the content that
they are most interested in.
Reports are often modelled on the following
structure but can be modified to suit particular
requirements:
1. Title page: The title page should identify the report with
relevant information as is applicable, e.g. title; author's
name and organisational position; version number; date.
1. Title page - The title page should identify the report
with relevant information as is applicable, e.g. title;
author's name and organisational position; version
number; date.
2. Table of contents - The table of contents should show
the section titles and major headings listed in order of
appearance and show page numbers.
3. Executive summary - The executive summary should
briefly:
state the purpose of the report
provide background information to establish the context for
the report
indicate the scope of the report and clarify key or ambiguous
terms
summarise the main ideas and recommendations of the
report
include any limitations encountered and how this affects
your recommendations.
4. Body - The main body of the report should detail the key findings
of your report and analysis. The body of your report should include:
data collection techniques/methods used
findings or results
charts or illustrations as required or appropriate to clarify key
points
analysis, discussion and explanation of your findings.
The body should be presented in a logical sequence. It may be
divided into sections outlined by heading and subheadings.
5. Conclusion - The conclusion should summarise the key points
from the main body of the report. It should clearly relate to the
purpose of the report. No new information should be included here.
6. Recommendations - This section should include your
recommended strategy or course of action based on the
findings of the report. Recommendations must be
supported by the data presented in the body of your
report. Recommendations should:
be given only when asked for
be based on analysis of data and conclusions
contain some indication of how they can be
implemented
be sensible and feasible.
7. References - If information has been gathered from
online or print-published material or documents, the
source should be acknowledged:
in the main text where they are used
at the end of the report in a references list.
Citations and references must be presented in the format
required by your organisation, or another standard
referencing system, such as the author-date system .
8. Appendices - The appendices should include
additional material that has been referred to that is not
essential for the reading of the report. They provide a full
understanding of the report.
To win credibility or support for recommendations, you will
need to understand the purpose of your report and the
requirements of your business audience.
In many cases, particularly in the context of business
meetings, you will need to present management reports or
information and feedback in the form of presentations, for
example using Microsoft PowerPoint or Apple Keynote.
When preparing slides, ensure you best summarise
information and provide dot-points. Include the charts and
graphs which illustrate performance
Organisational requirements
It is important to follow organisational requirements for
preparing reports. Your organisation may have templates or
style guidelines that provide guidance or mandate how
documents are to be produced, regardless of their content or
nature and footers, page-numbering and file-naming
protocols. You should ensure your report
Organisational requirements may include directions for use of
company logos, headers follows all necessary guidelines,
contains all the relevant information and is presented
professionally
question Present sustainability data
To support continuous improvement, the
sustainability policy needs to be reviewed
regularly by internal personnel. It is also useful to
have third party audits to check ones business
performance against standards, Key Performance
Indicators, industry benchmarks and industry best
practice. It is sometimes helpful to look at the
practices of leading sustainable business from
outside ones own industry (such as Banksia
award winners) for inspiration on best practice.
You may need to
undertake:
post-implementation
evaluation and review
benchmarking
modification of
policies and
procedures as
required.
One of the best ways to evaluate and review the
effectiveness of a policy implementation against
organisational and stakeholder requirements is to
identify a set of metrics that can be measured over
time that demonstrates whether the sustainability
policy or related initiatives have had an impact on
organisational success. What the most
appropriate metrics are for your organisation will
depend largely on what the organisation's
strategic directions, mission, vision and values
are.
Types of metrics could include:
Financial - Has the implemented sustainability policy
resulted in financial gains for the organisation, for
example gross profit, annual expenditure, tax liability?
Process or productivity - Has the policy increased
productivity, efficiency or return on investment?
Customer - Is the policy delivering improvements that
are having a positive impact on the customer
experience? Has the policy effectively positioned the
organisation as a strong competitor within the market?
Employee performance - Has the policy improved
individual employee performance to meet market
requirements? Has the policy improved the culture,
industrial relations climate, pride in the environmental
credentials of the organisation or increased desire to stay
and develop green skills within the organisation?
Sustainability - Has the policy helped to achieve goals
that cannot be easily identified using the traditional,
market-focused, key areas of performance? For
example, has the organisation won the support and
endorsement and goodwill of government, NGOs or
community groups; has the organisation made a positive
difference, purely for its own sake?
For this evaluation and review to be most useful,
performance should be measured on a regular basis
over a period of time. This will ensure that you will be
able to see if the policy has delivered sustainable and
long-term benefits to the organisation. Below is an
example of evaluation and review schedule that you
could apply:
Review Timing
1 3 months post-implementation
4 3 years post-implementation
5 5 years post-implementation
To fully evaluate the success of the sustainability policy, you
should expand the scope of your review of performance
beyond the organisation itself. If possible, you should look
at benchmarking data for similar organisations. Compare
your organisation's performance with the performance of
other organisations. Are there areas of relative
underperformance? If there are, you should consider
recommendations to bring your organisation's performance
into line with industry averages for resource use ratios, for
example. If the organisation does not act to keep up, there
is a risk the organisation will fall further behind and develop
a reputation for poor sustainability and corporate
responsibility.
Policies and procedures are the main documents outlining
organisational aims and approaches to sustainability.
Having reviewed workplace sustainability, you will need to
evaluate and continuously improve the policy and
procedures documents themselves - how they are written,
structured, and how effective are they at communicating
and promoting the organisation's strategic approach to
sustainability.
The process of modifying policies and procedures involves
many of the same steps as the process of developing
policies and procedures. It is always important ensure that
modifications:
reflect the overall strategies and plans of the organisation
comply with (up-to-date) requirements of legislation and standards
are made in consultation with stakeholders
are effectively communicated to the workforce
are reviewed for efficacy
are continuously improved.
question Benchmarking

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