UNIT 4 - AOS 4 Flashcards
Define Quantitative Measures
Objective measures based on collected numeric data, such as the number of complaints, money etc
Define Qualitative Measures
Subjective measures based on the opinions of a group.
Define Financial Indicators
Performance indicators based on financial statements and profitability
Define Non-Financial Indicators
Performance indicators that are not necessarily evident in the financial statements of an organisation.
Define Efficiency:
The best use of the resources of an organisation in order to achieve organisational objectives.
Define effectiveness:
The extent to which the organisation chooses the appropriate objectives and achieves said objectives.
Define KPI’s
Are a specific set of criteria that measure the efficiency and effectiveness of a businesses performance. KPI’s can be used to evaluate the performance before and after the implementation of a change to see if a change has been successful in achieving business objectives.
KPI - Number of Sales
Measured as a count.
Sales increase profit if cost is kept level.
A business may sacrifice short term profit to increase sales and rid themselves of stock.
KPI - Percentage of Market share
Is the % of the businesses sales compared to the entire marketplace.
An increase is a sign o a successful business.
KPI - Net Profit Figures
The earning performance of a business.
Therefore indicates its capacity to use its resources to maximise profit; which indicates successful performance.
KPI - Rate of Productivity Growth
Is the change in productivity - productivity is:
Compares the number of outputs produced with the number of inputs going into production.
KPI - Rate of Staff Absenteeism
Is the rate in which employees fail to attend work on a given day. If it is high then it is a reflection of job dissatisfaction or personal issues. - Leads to money and productivity costs.
KPI - Level of Staff Turnover
Number of quitters. If high it means staff are unsatisfied with their workplace which threatens morale and productivity. Costs are associated with turnover.
KPI - Number of Workplace Accidents
An unsafe workplace impacts productivity by; reducing morale, hindering production and costs. This can be reversed through better safety.
KPI - Level of Wastage
All organisational wastage (TIMWOOD). Businesses that reduce waste are more profitable and efficient.
KPI - Customer Complaints
If a customer complains then they are not satisfied with an aspect of the business.
Successful organisations maximise satisfaction therefore reducing complaints. Complaints usually indicate that improvements are needed ‘somewhere’.
Define Change
Refers to a planned or unplanned response to internal or external pressure on the business.
Incremental Change
Small continuous changes that occur regularly in a business.
Concept of Change:
Refers to transitioning individual employees, working teams, functions or the whole business in to a new state of operations.
Once identified, change must be committed to as it is easy to lose focus on change.
A business should also look at how change may affect stakeholders and plan accordingly.
Define Driving Force:
Are forces that initiate/support change - therefore pushing a business towards a desired state.
Managers - Driving Force
Are the decision makers of a business. They will therefore push for changes that benefit the business. Managers will use KPI’s as a basis to initiate change.
Employees - Driving Force
May be innovative and contribute ideas to assist with the change process. Employees may also make demands as a way of initiating change. Employees in a positive and supportive work culture will better support change.
Competitors - Driving Force
Affects in the following ways:
- Creation of competition forces a business to change in order to stay relevant.
- Same for competitors prices
- Same for competitor adopting more efficient practises or technology
This is all in pursuit of a competitive edge.