Assessing Business Performance
Assessing business performance involves evaluating the effectiveness and efficiency of a company's operations, finances, and overall strategic direction. This process often includes analyzing key performance indicators, financial statements, market trends, and customer feedback to gauge the success and areas for improvement within the organization. The goal is to make informed decisions and take actions that drive sustainable growth and profitability.
6 Key excerpts on "Assessing Business Performance"
eBook - ePub- Rodney Turner(Author)
- 2016(Publication Date)
- Routledge(Publisher)
...7 Measuring Performance Lynn Crawford DOI: 10.4324/9781315585741-7 Performance measurement is the selection and use of quantitative or qualitative data to provide information about the quality and performance of activities, systems, individuals, groups and organizations and to determine progress towards and achievement of objectives. It is a widely accepted concept in business where it is primarily associated with financial criteria such as return on investment (ROI). Since the 1980s, financial measures of performance have been criticized as historical in nature, offering little guidance for future performance or improvement. They are seen to encourage a short term view that lacks strategic focus, does not take into account the specific needs or expectations of clients or customers and is insensitive to the external context. Such concerns were addressed in the balanced scorecard approach (Kaplan and Norton, 1992), which proposed the use of customer perception, internal business process and learning and growth measures in addition to financial criteria. Another extension of the criteria traditionally used to measure organizational success is proposed in the triple bottom line (Elkington, 1994), which includes social and environmental criteria as well as economic performance measures. For projects, financial measures and other hard or objective criteria, such as time and cost, remain central to the measurement of performance but the need for a wider and more contextually sensitive set of assessment criteria has been increasingly recognized. Before deciding on the specific criteria or measures for assessment of performance in the project context we need to consider the purpose of the assessment, the units to be measured and how measurements will be made. There are many dimensions to consider...
eBook - ePub- Jessica Keyes(Author)
- 2016(Publication Date)
- Auerbach Publications(Publisher)
...These strategic discussions improve buy-in from key leaders within the organization and encourage reflection from multiple perspectives. After an organization discusses what is important to measure, the next step is to choose specific performance measures. Performance measures serve as indicators for the effectiveness of systems and processes. Measure what is important based on the evaluation of an organization’s internal priorities as well as what is required to meet external expectations. It is important to include staff in the measure selection process since staff will be involved in the actual implementation of measurement and improvement activities. Buy-in from staff significantly facilitates these steps. It is also a good idea to use existing measures, if possible. Criteria for measures include Relevance : Does the performance measure relate to a frequently occurring condition or does it have a great impact on stakeholders at an organization’s facility? Measurability : Can the performance measure realistically and efficiently be quantified given the facility’s finite resources? Accuracy : Is the performance measure based on accepted guidelines or developed through formal group decision-making methods? Feasibility : Can the performance rate associated with the performance measure realistically be improved given the limitations of the organization? Table 2.1 Performance Management Activities IDENTIFYING AND PRIORITIZING DESIRED RESULTS Establishing means to measure progress toward those results Setting standards for assessing how well results are achieved Tracking and measuring progress toward results Exchanging ongoing feedback among those individuals working to achieve results Periodically reviewing progress Reinforcing activities that achieve results Intervening to improve progress where needed Once performance measures are chosen, an organization collects the baseline data for each measure...
eBook - ePubService Science
Analysis and Improvement of Business Processes
- John Maleyeff(Author)
- 2020(Publication Date)
- Routledge(Publisher)
...10 Measuring Business Process Performance Determining Performance Metrics Practitioners are well aware of better, cheaper, faster (BCF) as three important high-level goals in any business. These three dimensions are certainly important – all customers want high quality (i.e., better), and they want it as quickly as possible (i.e., faster) and at the lowest cost (i.e., cheaper). However, the definition of “better” can itself be multi-dimensional, especially when it pertains to customers of a service. In Chapter 3, the definition of value as defined by customers formed the basis of a business process analysis. These dimensions informed development of process maps and the identification of value-added and wasteful activities. Once wasteful practices are removed and effective capacity levels are determined, the process should be able to deliver an effective service. Performance of the business process needs to be measured on an ongoing basis. Many firms employ a quality (or performance) management system that collects and analyses performance data. These systems evaluate performance relative to the goals set by the firm. They also show when performance degrades so a root cause investigation can be initiated. Performance management for a business process offers unique challenges due to the multi-dimensionality of customer desires. In addition, many firms do not devote suitable attention to creating and maintaining a performance management system, especially for processes that serve internal customers. The appreciation of performance dimensions is integral to delivering value that is measured by customers’ needs rather than by cost-effectiveness and other service providers’ desires. For services, performance dimensions vary based on the nature of the service. In a bank, for example, the performance dimensions are typically accuracy, transaction timeliness, convenience, courtesy, and information security...
eBook - ePubThe Story of Industrial Engineering
The Rise from Shop-Floor Management to Modern Digital Engineering
- Adedeji B. Badiru(Author)
- 2018(Publication Date)
- CRC Press(Publisher)
...As Drucker (1998) has pointed out, some of the most important information managers need comes from outside their organizations and even outside their industries. A challenge for performance measurement is to provide not only internal but also external performance information that provides competitive intelligence for making strategic decisions. Most strategic management or strategic planning processes include a last or next to last step that serves to measure, evaluate, and take corrective action. Often, this step is expected to be occurring throughout the process, with the formal execution of the explicit step occurring after goals have been set, action plans have been deployed, and strategy implementation is underway. That is, periodic review of progress toward meeting goals is a regular part of a strategic management effort, and performance indicators can provide evidence of that progress. When the goal-setting process includes the identification of key performance indicators and future performance targets for each indicator, the decision of which indicators to review has largely been made. In cases where goals are perhaps more qualitative or include simple quantitative targets without an operationally defined performance indicator, the planning team must choose or develop a set of progress indicators for these periodic (e.g., monthly or quarterly) reviews. A rule of thumb for these cases, based on the work of Sink and Tuttle (1989), is to develop indicators that provide evidence of the effectiveness, efficiency, quality, and impact of progress on each goal. Each of these terms is defined earlier...
eBook - ePub- Mohamed Zairi(Author)
- 2010(Publication Date)
- Routledge(Publisher)
...The emphasis in a modern business context is delivering quality rather than producing quantity. 2 Direct physical measures are an effective means to decision making; unlike traditional measures, the new measures such as cost, quality and time can lead to action on the spot and decisions taken at the right time to make necessary adjustments and bring about any corrections. Hence, what is delivered to the customer can remain of high quality. 3 Measuring through the voice of the process: measuring the capability of the process (i.e. control measures such as SPC) and the consistency of the process (i.e. feedback measures such as time, quality, cost) determine the overall capability of the organization and as such, enable senior managers to define parameters of competitiveness. 4 New measures can support strategic direction and make goal setting a more achievable task. The lack of performance measurement with strategy is recognized by most authors. Vollmann [ 10 ] for instance argued that one of the fundamental attributes of an effective performance measurement system is that it should ‘encourage actions congruent with the company's business strategy’. As will be argued in later chapters, the effectiveness of the implementation of TQ-based performance measurement systems is heavily dependent on strategy formulation and implementation. There is total interdependence, and effective strategic planning has to rely on continuous feed-back resulting from continuous measurement. As Sink [ 11 ] argues: Improving strategic planning is critical to developing measurement systems for world class competition. 5 Performance measurement (PM) has to fit the culture of the organization...
eBook - ePub- Institute of Leadership & Management(Author)
- 2013(Publication Date)
- Routledge(Publisher)
...Your task is to produce a numerical comparison of the performance of the two factories, and comment on what you find. Quarter 1 Quarter 2 Quarter 3 Quarter 4 Factory A 31,200 31,000 34,300 29,800 Factory B 18,500 19,300 16,200 31,700 2 What measures could you devise to assess staff morale amongst your work team? Try to think of three. Remember that quantitative measures are more useful than qualitative measures. 3 Fill in the missing words in the following sentences. Benchmarking is a good way of avoiding _______________ and it may give rise to _______________ _______________. The main interest of shareholders is to get a _______________ on their _______________, so _______________ is usually thought of as a commercial organization's prime objective. The balanced scorecard looks at an organization from four different points of view. a b c d Answers to these questions can be found on pages 116 – 17. 9 Summary Performance measurement looks at how well something performs compared with how it performed in the past, or how it is required to perform in the future, or how something else performs. Quantitative information is most useful because it gives you a clear target to beat. It is important to make sure that you are comparing like with like. An organization's performance is judged on profitability, productivity and activity. Financial performance indicators compare performance against budget, the trend over time, other organizations, the economy in general and future potential. Non-financial measures look at specific aspects, such as the number of people served or the time taken to do something. External comparisons can be made against the general economy and competitors, and by benchmarking against competitors, other processes or other internal. departments. Stakeholders are internal (employees), connected (owners, customers, financiers, suppliers), and external (community, government, pressure groups, professional bodies)...
