Overall Performance Flashcards
What are the 3 measurements for HR effectivness?
- Labour turnover
- Labour productivity
- Absenteeism
What 4 ways can you use to measure operational efficiency?
- Capacity utilisation
- Quality reports
- Waste levels
- Environmental targets
What are the 4 ways you can measure marketing effectivness?
- Customer loyalty
- Recognition levels
- Customer satisfaction levels
- Market share
How do you calculate labour turnover?
Why is high labour turnover a problem?
- Higher costs - recruitment/training
- Increases pressure on remaining staff
- Distruption to productivity and production
- Hard to maintain quality of customer service and product quality
How do you improve staff turnover?
- Effective recruitment and training
- Competitive pay and benefits
- Job enrichment
- Reward staff loyalty
How do you calculate labour productivity?
Why is labour productivity important?
- Labour costs are normally a high % of total costs
- Business efficiency and profitablity is closely linked to productive use of labour
- Competitiveness depends on keeping unit costs down
How can you improve labour productivity?
- Measure performance and set targets
- Streamline production processes
- Invest capital in better equipment
- Invest in employee training
- Improve the layout or organisation of the work place
How do you measure labour absenteeism?
What is a core competence?
Something unique that a business has, or can do, strategically well. Enables a business to compete effectivley by focusing on their strengths.
What are the 4 ways in which businesses can develop core competencies?
- Can arise from the collective learning or expertise of a business
- Can arise from the businesses ability to bring together skills and technologies
- Can arise from the businesses ability to add value to their products meaning they’re more superior to competitors
- Can arise from the business being different to competitors
What are the 3 criteria that has to be met for something to be a core competence?
- Does it provide consumer benefits
- It needs to be hard for competitors to imiatate
- It can be used across many different products and markets
What is the problem with Hamal and Prahalad core competencies theory?
Focus on core competencies and outsource non-core competencies which has led to:
- Over zealous outsourcing
- Damaging business competitvness by losing some of the skills built up
- Increased costs
- Difficulty identifying core competencies that are unique to the business
- Possibility of the business becoming too complacent about its core competencies.
What is Kaplan and Norton’s Balance scorecard used for?
The scorecard is used by directors and managers to keep track of the way that staff within their control are carrying out their activities and to monitor the concequences arising from these actions.
What is the aim of Kaplan and Norton’s balance score card?
Measure business and employee performance against a wider (more balanced) range of measures, with the emphaisis more on long term strategic objectives.
What are the 3 features of Kaplan’s and Nortons balanced scorecard?
- Starts with the mission and value of a business
- Indicates key performance indicators from 4 different perspectives
- Emphasis on non financial measures
What are the 4 perspectives that Kaplan and Norton’s Balance Scorecard uses to identify the Key Performance Indiactors?
- Customer perspective
- Learning and growth perspective
- Internal processes
- Financial perspective
What are the 3 measures used to indicate KPI’s from the financial perspective?
- Operating profit margin
- Return on capital employed
- Dividend yield
What are the 3 measures used to identify KPI’s from the customer perspective?
- Returns i.e. what % of goods sold you sell are returned
- Reviews
- Service rating
What are the 2 measures used to identify KPI’s from the internal processes perspective?
- Lead times - ability to meet orders quickly
- Unit costs - minisming these, achieveing economies of scale
What does the learning and growth perspective focus on?
How you educate your employees, how you gain and capture your knowledge, and how you use it to maintain a competive efge within your markets
What are the 3 measures used to identify the KPI’s from the learning and growth perspective?
- Retention of key employees
- Length of product lifecycle from launch to maturity
- Length of time for product launch to market versus competition
What are the advantages of using Kaplan and Norton’s balance score card?
- It takes a broader view of business performance
- It links performance to long terms aims and vision
- It envolves everyone in the business
- Its flexible - each business can decide their own KPI’s
What are the disadvanatges of using Kaplan and Norton’s balanced score card?
- Danger of too many KPIs which may lead to confusion and lack of clarity
- Difficult to find balance between all 4 perspectives
- Too often senior management will prioritise the financial perspective to achieve the short term gains
- Information and KPIs need to be up to date
What is corporate social responsibility?
A form of self regulation by which companies exceed legal minimum requirements in an attempt to be good citizens
What 3 important areas does the The Tripe Bottom Line encourage the assesment of overall business performance to be based on?
- Profit
- People
- Planet
Why is the Triple Bottom line important?
- Businesses are usually assumed to be profit maximisers
- Profit is the traditional measure of business success
- Profit is closley linked with business value (e.g. share price and market capitalisation)
- Profit is often the basis for financial incentives (e.g. senior management bonuses)
What are the advanatges of using the Triple Bottom Line?
- Encourages business to think beyond narrow measure of performance
- Encourages CSR reporting
- Supports measurement of environmental impact and extent of sustainability
What are the disadvanategs of using the Triple Bottom line?
- Not a very useful measure of overall business performance
- Hard to relaiably and consitently measure people and planet
- No legal requirement
Why take a long term approach?
- Firms that focus on short term are misguided
- Firms will enjoy sustained growth if they favour the interests of long-term shareholders over traders who hold shares for briefer periods
- There are several plans to advanatge those who hold shares in a company for a long time
- Repeated financial-market crises have reinforced a view that short term traders are nothing but trouble
What are the problems with a long term approach?
Can be an excuse for failing to grasp difficult problems
What are the advanatges of using a short term approach?
- Short term demands such as quaterly reporting schedules can force problems out in the open, the quicker to get them fixed
- Better at shifting capital quickly to new opportunties
In which industries may you want to use a long term or short term approach?
In a stable industry you may want to use a long term approach
In industries such as social media, short termism works better because they are constantly forced to abandon their plans an pivot to a new strategy
