Member Tools & Resources

Copyright 2011 IOFM

CASE STUDIES

PERFORMANCE MEASURES IN SECURITY CONTRACTS AND SAMPLE SERVICE LEVEL AGREEMENT Below are important considerations and issues related to the use of metrics when hiring contract security

personnel from a security services firm.

§ Accompanying the contract should be a comprehensive service level agreement (SLA), which sets

out in clear language the customer’s expectations of the services to be provided by the contract

firm.

§ The SLA will identify requirements for the security firm and cover aspects related to delivering

personnel and managing the contract, such as training, pre-employment screening,

communications, and data and report requirements.

§ A comprehensive SLA will also spell out the service the client expects for every area in which

contract officers perform any type of function, including post coverage, patrols, incident

response, device monitoring, deliveries, searches, vehicle control, or any other function contract

security officers are expected to perform. (To see examples, refer to the “Sample Service Level

Agreement” at the end of this item.)

§ For each element of service defined in the SLA, clients and the contract firm should identify a list

of key performance indicators (KPIs). These KPIs (also referred to as performance metrics or

performance measures) will allow the client and the firm to see if performance in the different

service areas is being adequately met. For example, a typical SLA will address client expectations

in the area of invoices and monthly reports and identify all invoicing and report requirements.

Associated with this SLA item should be a list of KPIs that will track performance in this area and

inform both parties about whether the firm is meeting its obligation. An example of a KPI for

monthly reports might be “all specified monthly reports are submitted three days prior to monthly

meetings.” Companies can then grade the contract firm on how frequently it meets or fails to

meet this performance measure, thereby establishing a running scorecard of the security firm’s

performance and promoting continuous improvement.

§ Companies can also apply a weighting system to KPIs. This will ensure that security firms are

judged more closely on the performance areas that the client thinks are most important.

§ Both the client and the security provider must agree to the KPIs in writing before the contract

commences.

§ Which KPIs are appropriate will vary from business to business, and clients should take care to

develop meaningful measures of performance in the areas that are truly important to them.

Examples of performance areas and related KPIs are:

                     Member Tools & Resources

Copyright 2011 IOFM

o Staffing (percentage on-time, rate of officer replacement, days missed by security officers,

and reduction in overtime hours); and

o Productivity (number of security incidents, actual losses, number of patrols completed on

time, tasks accomplished per shift, response time to emergency calls for service, and

percentage of security audits completed competently and on schedule).

§ In developing the performance indicators, organizations should consult branch managers,

department heads, and any other stakeholder to learn which security services they find important.

Companies often fail to ask the “end users” of staffed security services what they want, but how

these stakeholders define quality security service should be used to create the measurable

standards of quality that an organization demands from its supplier. (Security directors often

make the mistake of basing the key criteria of security contracts on what they want, when the

value that is provided by the security officers doesn’t necessarily have a lot to do with the security

department.)

Sample Service Level Agreement

                     Member Tools & Resources

Copyright 2011 IOFM