Perfomance Management and control Flashcards
What are the four indicators fro the balanced scorecard approach?
- Customer Satisfaction
- Internal Processes
- Innovation and improvement activities
- Financial Measures
Explain the financial perspective of the balanced scorecard.
How do we look to shareholders?
Typical financial goals have to do with productivity, growth and shareholders values.
Financial success is ultimately required if an organisation is to survive - so finance measures always need to be part of performance management
Explain the customers perspective of the balanced scorecard.
How do customers see us?
Many organisations make taking care of the customer a high priority. The balanced scorecard translates the mission of customer service into specific measures of concerns that really matter to customers.
Explain the internal business perspective
What must we excel at?
What the company must do internally to meet its customers’ expectations. These are business processes such as quality, employee skills and productivity.
Explain the innovation and learning perspective
Can we continue to improve and create value?
Learning and growth of employees is the foundation for innovation and creativity. Thus, the organisation must create a culture that encourages employees to make suggestions and to question the status quo; it must also provide employees with the environment and resources needed to do their jobs.
What are two basic reasons performance management is needed?
1) To ensure that the operation is doing what it is meant to be doing (Control)
2) To ensure that it is improving the efficiency and effectiveness of its activity (Improvement)
What are the five purposes of performance management?
1) Control
2) Improvement
3) Communication
4) Motivation
5) Compliance
Explain the role of control in performance management
Control
Performance measurement provides feedback so that action can be taken to keep process in control.
Explain the role of improvement in performance management
Improvement
Performance measurement can help drive improvement, it implies activities measured are important.
Explain the role of communication in performance management
Communication
By measuring something, an organisation signals that it is important and that it needs to be controlled and/or improved.
Explain the role of motivation in performance management
Motivation
The measures, or set of measures, used influence the behaviour of employees.
Explain compliance in performance management
Compliance
Some performance measures may be required by regulations.
What are five categories of measures that performance management is concerned with and what do they mean?
Quality - means consistently producing services and products to customers expectations
Speed - refers to the time between customers requesting and receiving product or service
Dependability - means doing things in time expected by customers
Flexibility - refers to the capacity of an operation to adapt to change
Cost - Low costs are critical for companies that compete by offering low prices
What is Strategic control?
It is monitoring performance to ensure that strategic plans are being implements and taking corrective action as needed.
What is Tactical control?
It is monitoring performance to ensure that tactical plans are being implemented - This is usually done by middle managers.
