7.3 overall performance

Question 1

labour productivity

Answer 1

number of employees/ units produced

Question 2

capacity utilisation (units)

Answer 2

actual level of output/ maximum possible output x 100

Question 3

operations data

Answer 3

-productivity of labour and capital used in production
-measures of quality
-capacity utilisation

Question 4

why would operations data be useful in assessing the performance of the business?

Answer 4

-allows stakeholders to measure the efficiency with which business converts input into outputs.
-the extent to which the business benefits from economies of scale.
-the extent to which the firm has a competitive advantage.
the amount of products a business needs in order to produce one unit.
the minimum of staff needed.

Question 5

quality may be judged by:

Answer 5

-customer loyalty
-customer satisfaction (questionnaires, surveys)
-number of faulty products or response time to customers queries.

Question 6

how could we improve quality?

Answer 6

-quality circles
-inspections
-higher quality materials
-staff training
-quality control
-quality assurance

Question 7

labour cost per unit of output
(financial methods of HR)

Answer 7

labour costs/ units of output
-includes productivity AND wage cost

Question 8

absenteeism

Answer 8

number of staff absent in a period/ number of staff employed in a period x100

-proportion of employees not at work on a given day
-high rates indicate workforce lacks engagement and motivation which can damage competitiveness.

Question 9

labour turnover (%)

Answer 9

number of staff leaving/ number of staff employed x100

-higher= additional costs of recruiting and training employees as well as short-term decline in productivity.
-lower= motivated and engaged staff high productivity.

Question 10

health and saftey

Answer 10

-developing strong employer brand helps businesses recruit the most talented, creative and productive employees.
-important in oil and gas industry.

Question 11

marketing data

Answer 11

-info relating to sales figures, brand recognition + expenditure on marketing activities.
-important in influencing customers buying decisions as well as decision making by other stakeholders.
-customer reviews play big role as provide valuable data on business’s strengths
-effect customers decision on whether to buy product.

Question 12

environmental data

Answer 12

-emission to air.
-emissions to water.
-emissions to land. (fertilisers, landfill etc.)
-use of scarce and non-renewable resources.

Question 13

core competencies

Answer 13

unique abilities that a business possesses to provide a competitive advantage.

Question 14

examples of core competencies

Answer 14

-collective learning within the business
-ability to integrate skills and technology
-superior products and services
-differentiation to competitors

Question 15

why are core competencies useful?

Answer 15

• take advantage of opportunities to enhance performance and compete with market leaders
  -shows the right resources are used in the right areas of operations
  -adds value
  -if matched with market opportunities= basis for creating new business
• unites strengths and gap in market

Question 16

criticisms of core competencies

Answer 16

-larger firms may take it as a sign to outsource non-core business activities which can damage competitiveness.
-very difficult to identify to any particular business.
-sometimes businesses acquire the same abilities
-based on out of date notion

Question 17

long term decisions

Answer 17

-investment into research of new products and processes
-training employees to provide high-level skills
-creating new production facilities which may only break even in long term

Question 18

research and development

Answer 18

-part of innovation process
-using human+financial reasources to develop new products or more efficient methods of production
-can result in selling highly desirable products at premium prices

Question 19

impacts of R+D

Answer 19

-little investment= high short term returns but at expense of long term performance

-high investment= may not always work and acheive better long term performance but it shown intention

Question 20

where is R+D used most?

Answer 20

-ICT producers
- health industries
-automobiles and transport

Question 21

profit quality

Answer 21

• profit that is likely to continue into future as high-quality profit

Question 22

employee engagement

Answer 22

• degree to which employees invest cognitive, emotional and behavioural energies towards organisational outcomes

Question 23

long term employee engagement

Answer 23

-beleive employees are key assets to business
-good relationship with employees
-investment in training, retention rates

Question 24

short term employee engagement

Answer 24

-employees aren’t important, focus on other stakeholders
-poor relationship with employees
-lack of investment in training, high labour turnover and absenteeism

Question 25

sustainability

Answer 25

• as business using its resources, as well as natural resources to avoid damaging or compromising future use and business activity

-focus on long term even at expense of long term costs

Question 26

Kaplan and Norton’s balance scorecard

Answer 26

provides a range of financial and non- financial info that supports business management.

Question 27

benefits of Kaplan and Norton’s balance scorecard.

Answer 27

• broader view of business performance
  -links mission and vision to performance
  -involves everyone in business
  -highly flexible as KPI’s chosen by business

Question 28

drawbacks of Kaplan and Norton’s balance scorecard.

Answer 28

• danger or too many KPI’s
  -need to have balance between the 4
  -perspectives- not easy
  -senior mangers may still be too concerned with financial performance
  -needs to be updated regularly

Question 29

Elkinson’s triple bottom line

Answer 29

encorages assesment of overall business performance based on three areas.
-profit
-people
-planet

Question 30

benefits of Elkinson’s triple bottom line

Answer 30

-encorages business to think beyond profit
-encorages CRS reporting
-supports measurment of environmental impact and extent of sustainability

Question 31

drawbacks of Elkinson’s triple bottom line

Answer 31

• not very usefull as overall mesure of performance
  -hard to reliably and consistently measure people planet and bottom lines
  -no legal requirement to report it so poor take up.