12. Big Picture

Question 1

Step 1 - Defining the objective for performance measurement

Answer 1

The objective should be alisgned with the strategic plan of the company with clear reasoning on why that measure was selected.

Question 2

STep 2 - Assigning responsibility

Answer 2

This can be for the department or to the individual - when they’re held accountable for a performance measure, they need to have actual infleunce over it otherwise it would impact their true performance.

Question 3

What ar ethe different types of responsibility centers?

Answer 3

Revenue center, cost center, profit center, and investment centers

Question 4

What are revenue centers?

Answer 4

They have control over revenus only and is responsible for maximizing revenues

Question 5

What are cost centers

Answer 5

They have control over costs only and iss responsibile for providing a level of service at the lowest cost

Question 6

What is a profit center?

Answer 6

They have control over revenues and costs and are responsibile for maximizing profits

Question 7

What is an investment center?

Answer 7

They have control over revenues, costs, and investments and is responsible for maximizing profit relative to investments.

Question 8

What are some performance measures that for-profit organizations can look into to reward?

Answer 8

Finanical measures (revenue, productivity, asset utilization, finanical health)
Customer measures (rentention, new customers, selection, acquisition)
Internal business process measures (suppliers, lower costs, production, distribution)
Learning and growth measures (innovation, human capital, information capital)
Regulatory measures (environmental observance, legal compliance, community observance)

Question 9

What are some performance measures for non-profit organizations?

Answer 9

Stakeholder measures (donors, new and retaining, management, volunteer utilization)
Finanical (admin efficiency and effectiveness, program, fundraising, overall finanical health)
Internal business process (program management, process mangement, efficient administration)
Learning and growth (social innovation, volunteer capital, emplyee capital, information capital)
Social impact (environmental observance, legal compliance, community observance)