Identifying the range of performance measures


For management in both manufacturing and non-manufacturing


Industries


 


Introduction


 


            In any company, the goal for progress and rapid acquisition of income and profit is the central task of any management, especially those who are assigned in the senior management level. The constant research and further study about the organizational development of any company is imperative in order to stay competitive and live longer in the business world. In this case, versatility of managerial skills and savvy attitude towards critical analysis on management strategies and approaches are needed. Significant to the growth of any corporation is the advancement of adopting new means of giving effective customer service assistance in order to remain competitive and at the same time help robust the company’s profit and income, the use of new technology as the means of generating highly effective and proficient services to costumers imperatively employed.


            All companies strive to have this attitude and behavior. The utility of human power and knowledge manufacture great results in any organizational structures. The presence of highly competitive managers, researchers, economic analysts, experts in human resource management are formed collectively as archetypes of companies serving as troubleshooters, innovators, constructivist managers and organizational experts.


            With all of these high caliber human capabilities, companies lived longer and advertently progressed and developed competitively.


The historical antecedents as well as the precedents allow us to conjure our strengths to follow the significant footsteps of our forefathers in their struggle of instituting a civilization which represent their investment for labor and work. The transmission of knowledge and historical facts lead us to recognize the value of our ancestors’ struggle to establish a world that is conducive for living. The unending struggle to fight for the right and against oppression, abuse, and slavery are embossed in the map of history, chronologically designed and evaluated rigorously. In this line of thought, we are brought, with enough historical evidences that the omnipresence of labor and work is indeed born along the creation of life.


Management in organization


            In the realm of human resource management with other influential districts within an organization emphasized the vital role of individuals as the center of all the processes. One great consideration in defining and formulating effective organizational structure and management strategies is the role of individuals within its sphere. We cannot deny the fact that technology brought magnificent output in any organizational production but while technology can be an aid, the centrality of individuals or people has to be fully recognized and reinforced continuously. Such centrality of individuals merit incentives of being agent of knowledge transfer and knowledge source.


            Moreover, our identification of individuals as to its role in the growth and success of an organization is considered essential, more so in various domains of worldly interactions.


Organizational behavior


            In the current findings based on scholarly research, organizational behavior constantly changing due to various factors and variables involve. According to Denise Rousseau (1997), “the central problems in organizational behavior are influenced by changes in organization themselves”. Since, organization is changing it logically follows the changes in organizational behavior. This concept may cover a wide range of subjects, methods, approaches and perspectives. This may ranges from the use of management theories, organizational culture, individuality, decision-making, politics, power, leadership, conflict, and management change. This wide array of subject matters capsulated in a single term “organizational behavior” is but essential to the growth of an established and global corporation. The stability and status of organizational behavior within an organization underlines the process on how to meet the expected goal and vision of the organization.


            The conceptual analysis of organizational behavior is significant in understanding the scope of performance measurement employed within an organization to assess and evaluate the efficacy and efficiency of work. It is within this area wherein management employs proper and effective strategy to create conducive workplace.


            Furthermore, management processes is infertile without the existence of any structured organization. Only when an established organization ventures itself to financial or non-financial scheme can management processes fertilized its purpose. The fact is that management exists there are organizations present.


Identifying the range of Performance Measures for Management


            In every organization the need of various tools and strategic methods are important in assessing and determining its status whether it still maintains a competitive ambiance, financial value, profit operations and quality production. Hence, one important management strategy employed to assess and evaluate the efficacy and efficiency of various districts of the organization is known as performance measurement. Organization sees the relevance and value of such strategy. In order to identify problems, issues, and concerns of all members, the use of metrics are important.


            We defined performance measurement as a management tool used to maximize program success of an organization. The continuous updating and evaluating of organization’s performance is significant in the process of growth and development.


 Performance metrics are crucial to “understand the complex relationships of cause and effect, delay, feedback and so on (Issue Explorer, retrieved July 9, 2008, orsoc.org.uk)” within an organization. The role of managers and higher authorities are key performance drivers in which responsible to devised strategy in which performance measurement can be successfully launched.


            However, performance drivers are not only to responsible in devising strategy and instruments to measure the performance level of various entities and members of an organization, but to be critical considering that it might be detrimental to the organization’s objectives and goals. Hence, proper formulation and implementation of such metric is imperative. Drivers should identify particular subjects to be evaluated and measured in order to avoid futility of the strategic process. Performance measures are considered as part and parcel of organization’s strategy design. Moreover, Frigo (2002) emphasized the importance of performance measures which must be “driven by a process encompassing the ongoing reevaluation and redesign of business strategy.”


            Since the inevitability of changes occurred within organization due to outside forces like technological and scientific innovations, the entire value chain of an organization as well as its interrelationships of activities within that value of chain are affected by such forces of change. Thus, this also affects performance measures which are to be employed.


            Frigo (2002), moreover, underlined the need of synchronization and alignment of such performance measurement with that of defined organization’s strategic activities, more so, the usefulness of performance measures in helping synchronize strategic activities. He argued: “all strategic activities must be highly aligned and synchronized to create the right kind of offerings.” Hence, he urged that organization’s management to be “vigilant in aligning performance measures with the strategy of the organization.”


            In such case, the articulated ideas raised by Frigo give us notable insights that in planning to employ performance measurement in frequent basis, needs a considerable system. In order that such performance measures will not be futile and not being detrimental in other operations, organization should determine the functions that need to be measured and identify the indicators that best reflect performance. With this kind of consideration, organization may be able to articulate and achieve its desired objectives and goals.


            Moreover, performance drivers must inculcate in their minds against the rococo of performance measurement that what should be the primal thought they must hold is that performance measurement should be a means to the end of effective management.


            The overview just being presented would lead us to conceptualize and locate the end point of performance measures’ range. Undoubtedly, such process and strategic tool covers the whole of organizational management process. The interconnectedness of various organizational districts assumes the range of performance measures. Such large-scale coverage of the process clearly manifests in its many approaches, analysis, and methods which can be employed as part of measuring organization’s performance. There are generic approaches which organizations can invoke like Systems Thinking approaches which seek to capture the conceptual models of managers in order to understand the underlying cause and effect relationships between factors. Multiple Criteria Decision Analysis which provides an outline for unequivocal thought of multiple factors compelling people to consider exchange or trade-off. Data Envelopment Analysis is a technique for taking numerous metrics performance into a single outline for identifying best practice, developing a chart of under performance and helping to set achievable stretch targets.


            Hence, these evidences suffice our attempt to identify and locate the range of performance measures.


Performance Metrics in Manufacturing Industries


            In the recent landscape on economic and business status of India it configures a systematic, effective, and organized strategic planning which eventually boosted an economic and business success specifically on IT, hardware and software industries and other major technological businesses.


            Recently, researchers dubbed India as business process outsourcing hub in Asia. Added to such phenomenon is the seemingly “farfetched” but not really is, Information Technology industry, in which constructs a magnetic field which attracts investments from foreign investors and countries abroad. The IT industry in India brought bonds of profit and income to the government and business units. However, such phenomenon and rapidity of economic boom must be indebted on its own way of carrying strategic and positive developing of manpower force.


            The example was set to concretize our perception and understanding of manufacturing industries in which human labor and manpower management are vital elements. Like in India, most of its industries are inclined towards manufacturing. Most probably, the boom of its business industry is not only a credit to proper management, good regulations and government programs but also of each organization’s awareness and critical behavior towards measuring performances of its members.


            In Alastair Shaw’s article A Guide to Performance Measurement and Non-Financial Indicators, identified performance indicators in which financial and non-financial organizations can utilize for performance measurement. He identified six performance indicators wherein performance drivers can dwell into, first, competitive advantage which can be measured through market sales growth, share and position. Second is financial performance which is through profitability, capital structure, and liquidity. Third, quality of service refers to both employees’ and customers’ reliability, responsiveness, appearance, communication, comfort, competence, access, availability and security. Fourth, flexibility pertains to volume of flexibility, specification and speed of delivery. Fifth, resource utilization can be measured through productivity and efficiency of workers and lastly, innovation which refers to performance of the innovation process and of individual innovations.


            Moreover there is another model in which manufacturing networks or industries can use as a framework for performance measurement. This model is called the Balanced Scorecard in which it helps to determine and particularly identified factors to measure. The particularities in which can be used in performance metrics are deduced in the following categories: customers’ satisfaction and dissatisfaction, retention and behavior, these can be indicators in which can be measured, stakeholders’ satisfaction, marketing strategies the potential and growth rate, operations, organizational capabilities and stakeholders’ contributions.


            Furthermore, Hougas and Bartelstein (2003) provide five important issues in which can be considered in planning for measurement namely: involve key personnel, monitor measurements closely, examine key manufacturing areas, analyze measurement data with employees, and review goals and follow through with changes.


            Hence, clearly, manufacturing industries like India obviously use these strategies in further develop its manufacturing industries.


Performance Metrics in Non-Manufacturing Industries


            Performance metrics generally applied to any organization regardless of its kind, whether it is a manufacturing or non-manufacturing industries, performance measures can be applied. However, there are cases in which the general application of measures can be deduced and modified depending on the need and the structure of the organizations. Most often, this process happens in two different business entities like manufacturing and non-manufacturing entities.


            In non-manufacturing industries one example is the government agency. Performance measurements in government agencies are developed as part of the strategic planning process and should flow from the agency’s mission and objectives, strategies, and goals with an emphasis on serving the agency’s customers. Again, performance metrics in government agencies serve as a basis for planning future agency actions. Moreover, metrics inform decision-makers of internal process and help establish cause and effect relationships between performance, agency actions, and funding.


            Moreover, performance metrics are used to operate strategic plan through action plan, operational plans, implementation plans and business plans. It helps to frequently assess agency progress in achieving strategic and operational goals and objectives through review of actual performance and expenditures. It strengthens and develops agency rules policies and procedures.


Conclusion


            The study pertains to identifying the range of performance measures for management in both manufacturing and non-manufacturing industries. In the previous discussions I outlined basic assumptions about performance measurement in order to strike a clear argumentation. Moreover, the analysis of the subject matter is located in my attempt to identify and locate the range of performance measurement used by any organization. Such strategic practice provides any organization frameworks to identify factors which need to be enhances and to further develop especially on the level of efficacy and efficiency of different districts comprises an organization.


            Furthermore, performance measurements or metrics are important not only to enhance the level of efficacy and efficiency of workers but to further develop the competency level of the organization. Only when an organization which successfully formulate and apply proper performance measurements can achieves its desire goals and objectives. As authors of business management would put it, management vigilance is needed because careful implementation and application of any procedure on measuring performance can be on one way or the other detrimental to the business strategy of the organization. Thus, any metrics used should compliment to the business strategy, more so, enhance and further strengthen such organizational strategy.


 


References


‘Performance Measurement’, Business Knowledge Source.com


‘Performance Measurement’, Issue Explorer. www.orsoc.org.uk


Frigo, M 2002. ‘Strategy-focused Performance Measures (strategic management).’ www.allbusiness.com


Hougas, J & Bartelstein, B 2003. ‘Implementing Manufacturing Performance Measurements’, Tooling and Manufacturing Association


ICF International n.d. ‘Performance Measurement and Management: Achieving Mission-Relevant Results Through Performance Measurement’


Keel, J, O’Brian J & Morrisey, M 2006, ‘Guide to Performance Measure Management,’ 2006 edition


Rousseau, D 1997,’Organizational Behavior in the New Organizational Era’, Annual Review of Psychology Vol. 48 p 515


Shaw, A n.d. ‘A Guide to Performance Measurement and Non-Financial Indicators,’ Public Relations. www.fpm.com


 


 


 


 


 


 


 


 


 



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