7.3 overall performance Flashcards
labour productivity
number of employees/ units produced
capacity utilisation (units)
actual level of output/ maximum possible output x 100
operations data
-productivity of labour and capital used in production
-measures of quality
-capacity utilisation
why would operations data be useful in assessing the performance of the business?
-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.
quality may be judged by:
-customer loyalty
-customer satisfaction (questionnaires, surveys)
-number of faulty products or response time to customers queries.
how could we improve quality?
-quality circles
-inspections
-higher quality materials
-staff training
-quality control
-quality assurance
labour cost per unit of output
(financial methods of HR)
labour costs/ units of output
-includes productivity AND wage cost
absenteeism
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.
labour turnover (%)
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.
health and saftey
-developing strong employer brand helps businesses recruit the most talented, creative and productive employees.
-important in oil and gas industry.
marketing data
-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.
environmental data
-emission to air.
-emissions to water.
-emissions to land. (fertilisers, landfill etc.)
-use of scarce and non-renewable resources.
core competencies
unique abilities that a business possesses to provide a competitive advantage.
examples of core competencies
-collective learning within the business
-ability to integrate skills and technology
-superior products and services
-differentiation to competitors
why are core competencies useful?
- 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
criticisms of core competencies
-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
long term decisions
-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
research and development
-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
impacts of R+D
-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
where is R+D used most?
-ICT producers
- health industries
-automobiles and transport
profit quality
- profit that is likely to continue into future as high-quality profit
employee engagement
- degree to which employees invest cognitive, emotional and behavioural energies towards organisational outcomes
long term employee engagement
-beleive employees are key assets to business
-good relationship with employees
-investment in training, retention rates
short term employee engagement
-employees aren’t important, focus on other stakeholders
-poor relationship with employees
-lack of investment in training, high labour turnover and absenteeism
sustainability
- 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
Kaplan and Norton’s balance scorecard
provides a range of financial and non- financial info that supports business management.
benefits of Kaplan and Norton’s balance scorecard.
- broader view of business performance
-links mission and vision to performance
-involves everyone in business
-highly flexible as KPI’s chosen by business
drawbacks of Kaplan and Norton’s balance scorecard.
- 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
Elkinson’s triple bottom line
encorages assesment of overall business performance based on three areas.
-profit
-people
-planet
benefits of Elkinson’s triple bottom line
-encorages business to think beyond profit
-encorages CRS reporting
-supports measurment of environmental impact and extent of sustainability
drawbacks of Elkinson’s triple bottom line
- 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.
