...Introduction The topic of contrast and comparison contained within this paper consists of the evaluation of three individual performance measurements that exist in management. The individual performance measurements are broken down in order to better understand the inner workings of such measurements goals. Therefore the end result will be measured by how important performance management actually is. In the world of business there are many cliché’s about how performance measurements are implemented and what they actually do such as “if your company doesn’t measure results then you can’t tell success from failure.” http://www.balancedscorecard.org/Home/tabid/36/Default.aspx The key focus on strategic objectives should always articulate precisely what the organization wants to accomplish which is the key to finding accurate, true, strategic measurements. The strategic performance measures will allow the organization to monitor the implementation and effectiveness of the operational efficiency. The best performance measures will provide a way to monitor and see if that strategy is actually working. Focusing on the importance of the employee’s contribution to the success of the organization is another important measure that can be added along with providing a common language for the communication of everyone. Performance measurement is so vital in the structure of an organization because it is an ongoing and constant reporting and monitoring of accomplishments. Typically...
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...Performance Measurement Robert Campbell MGT/437 March 14, 2011 Sunil Mehta Performance Measurement According to NY Government (n.d.) website, “Strategic, performance measurement-based management systems allow an organization to align its business activities to its strategy, and to monitor performance toward strategic goals over time” (para. 1). Each measurement should be objective, easy to understand, controllable by minimizing outside influences, timely, accurate, cost-effective, useful, motivating, and trackable (NY Government, n.d.). The use of performance measurement is important because the stock market’s volatility has shown that financial measurement is not the only measurement. By using measurement techniques companies can compare themselves to established norms. In this discussion there will be a look at three different types of performance measurement systems, what they do and how they are used. These systems identified are the balanced scorecard, performance dashboards, and the economic value added. The balanced scorecard is a strategic planning and management measurement style widely used throughout the business world to bring its business activities in line with the vision and strategy of the organization (Balanced Scorecard Institute, 1998-2010). According to the Balanced Scorecard Institute (1998-2010) the implementation increases focus on strategy and results, increases organizational performance by measuring what is important, and aligns strategy...
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...Performance Measurement Linda Tate MGT/437 April 21, 2014 Michael Koma Performance Measurement Performance measurement is an essential part of the company; it provides a stage for managers and supervisors, as well as, the performance of its employees. It helps them determine whether or not employees are meeting the company’s expectations. Performance measurement methods differ according to the work surroundings, such as, the company, and the occupation of the employee. It can determine an employee’s employment status, and his or her compensation, as well as, their opportunity for advancement. Because of this performance management should consist of methods that use fair and correct assessments of the employee’s performance. To help employer’s measure employee’s performance, they must establish performance standards, which define what employees need to meet or exceed the company’s expectations (Ruth Mayhew, 2014). This paper will compare and contrast three performance measurements for the working environment of the company, and then the importance of performance measurements within a project. Graphic Rating Scales This is the first performance measurement; it is perfect for production work environments, like fast food restaurants. A list of job duties and performance standards is listed on a scale rating from 1 to 5, which rates the employee’s performance. This method requires preparation and can be completed quickly; this is superb for managers who...
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...Introduction The subject of performance measurement is encountering increasing interest in both the academic and managerial worlds. This, for the most part, is due to the broadening spectrum of performances required by the present-day competitive environment and the new production paradigm known as Lean Production or World Class Manufacturing (Hall et al., 1991). In addition there is the need to support and verify the performance improvement programmes such as Just-in-Time, Total Quality Management, Concurrent Engineering, etc. (Ghalayini and Noble, 1996). These programmes are characterised by their ability to pursue several performances at the same time, for example the increase in the product quality together with the lowering of the production costs and the lead times, following the reduction in discards, waste, reworks, and controls. Performance measurement is how organisations, both public and private, measure the quality of their activities and services. An influential 1982 book, "In Search of Excellence," sparked interest in measuring performance. Since then, business, government and other organisations have sought to measure the extent to which they meet organisational goals. Performance measurement may sound simple, but is often a complicated process that requires deep strategic thinking and assessment. Performance measurement systems (PMS), such as Kaplan and Norton’s (1992, 1996a) Balanced Scorecard, focus on organisational performance and, although the impacts...
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...Business Performance Measurement At the Crossroads of Strategy, Decision-Making, Learning and Information Visualization February 2003 Vince Kellen CIO & Faculty,School of CTI DePaul University Chicago, IL U.S.A. http://www.depaul.edu Abstract Business Performance Measurement (BPM) systems have grown in use and popularity over the past twenty years. Firms adopt BPM systems for a variety of reasons, but chiefly to improve control over the firm in ways that traditional accounting systems have not allowed. Several approaches, or frameworks, for building and managing BPM systems have evolved with the balanced scorecard as the dominant framework in use today. Despite the growing use of BPM systems in organizations of all kinds, significant problems cause firms to experience difficulty in implementing BPM systems. The problems range across a variety of topics: excessive diversity in the field of study, data quality and information system integration problems, lack of linkage to strategy, fundamental differences in how a strategy is formulated and executed in the firm, ill-defined metrics identification processes, high levels of change in BPM systems, analytical skills challenges, knowledge as a social and non-deterministic phenomenon, judgment and decision biases (from prospect theory literature) and organizational defenses that can undermine successful BPM systems use. To help address these problems, a set of critical...
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...Project management performance measurements Karen Mahich MGT/437 May 24, 2011 Mr. Pacheco Project management performance measurements Performance measures help organizations in the decision making process of future improvements by helping the organization understand what practices have been successful in the past and which have been failures. They are quantitative or qualitative ways to define performance and provide a tool for the organization to manage and define key indicators of organizational performance and customer satisfaction. Performance measures should identify the population measured, method, data source and time period, each measure should also be: • Easy to understand • Objective • Timely • Cost-effective • Controllable by minimizing outside influences • Accurate Speed Speed is different than time it represents the pace at which the final product functions and time measures the overall project schedule. It is important to understand that time would refer to the overall schedule, and speed would measure the performance level of the final product. Accuracy This is an important measure of performance, because it represents how well the system that the project put together actually functions. A project team could construct a product on time and on budget that is highly faulty regardless of the fact that the project was successful within two of the constraints, if it is not accurate, it fails to...
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...of the system's performance is presented and perhaps analyzed. A large number of different types of performance measures have been used to characterize systems, particularly production, distribution, and inventory systems. Such a large number of available performance measures makes performance measure selection difficult. Generally, performance measurement research focuses on analyzing performance measurement systems that are already in use, categorizing performance measures and then studying the measures within a category, and building rules of thumb or frameworks by which performance measurement systems can be developed for various types of systems. Beamon (1996) presents a number of characteristics that are found in effective performance measurement systems, and can therefore be used in evaluation of these measurement systems. These characteristics include: inclusiveness (measurement of all pertinent aspects), universality (allow for comparison under various operating conditions), measurability (data required are measurable), and consistency (measures consistent with organization goals). Besides analyzing the measures based on their effectiveness, benchmarking is another important method that is used in performance measure evaluation. Benchmarking can be useful in that it can serve as a means of identifying improvement opportunities. Camp (1989) provides an excellent, comprehensive discussion of benchmarking. In order to study the large number of performance measures available...
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...Performance Measurements Performance Measurements To maintain successful balance during a project and determine if the project met the demands of the shareholders, it is important to implement performance measurements. Many types of measurement may be used but three that stand out above the rest are return on investment, productivity, and customer satisfaction. Each of the measurements takes place at crucial points during the project and helps to identify success or failure of the project. The return on investment is an equation used to determine if the reward for risk is worth taking on a project. Project planning occurs by listing the resources necessary to accomplish a certain goal. The investment should not outweigh the return and thus the equation, net benefits divided by cost, multiplied by 100. Benefits can consist of contribution to profits, savings of costs, or an increase in the quantity of output converted to a dollar value. Costs can include the expense incurred for the design and development of the improvement initiative, cost of resources, travel, or training. If the return on investment is not worth the risk, the project may terminate itself before it ever starts (“Measures of Project Management Performance and Value,” 2005). Upon approval by the shareholders based on the return on investment, the project plan is assembled and the productivity measures are taken. The results are determined as the output produced per unit of input and show whether the money...
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...its industry in US (in 1990). The Kansas City Works within its Midwestern Steel Division was hit by the decline in the business in the US steel industry despite its good performance in the past. Consequently, it downsized and incurred significant losses in most of the 1980s. This entity produces two primary products including grinding media and carbon wire rod, one being recognized in the industry for its durability while the later being non profitable and only covering some of its fixed costs through volume. The Objective of Armco Inc. is maximizing profits and sustaining its position among the leaders in the US manufacturing steel industry. To achieve this objective, Armco has adopted a cost leadership strategy with a broad appeal and has managed to grow bigger through joint ventures and expansion of its product lines in implementing its strategy. However, the strategy adopted by the Kansas City Works is based on differentiation due to its cost disadvantages such as union labor costs and inefficient plant infrastructure. In addition to this inconsistency with the strategies of the company as a whole, the management control system put in place at Kansas City Works is holding the entity back from potential improvements in performance. The management at this entity is introducing a new performance measurement system to replace the old one that was based on production of an operating statistics report. The problem with the old system was that it was too detailed and distracted...
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...In this paper the subject to compare and contrast will be of three performance measurements, which can be used by the project manager during a project. Performance measurement is a numeric description of the work during a project and the results once the project is complete (Office of Financial Management, 2009). The performance measures provide the project manager and the team about progress in meeting the goals and objectives of the project. Measuring performance allows budget decisions, better management, and accountability for the project manager. The three performance measures, which will be addressed, are quality, key milestones, and target costs. Quality Quality is measured by the percentage of what is produced or received, which meets the specification of the project the first time, without any reworking. The measurement of quality entails assessing the effectiveness of the management of quality and determining problem areas, opportunities, savings, and action priorities (Performance management, 2011). Costs indicate the quality of the project. Prevention costs are costs planned and incurred before the project is started. As the project progresses, other costs such as appraisal, failure, internal, and external failure are other types of quality-related costs (Performance management, 2011). These costs are indicators to the project manager alerting him or her of quality suffering because of complaints, waste, rework, and repairs relating to the project. Kerzner...
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...DIVISION TOPIC: EVALUATION OF A NEW EXPANSION PLAN AND DIVISIONAL PERFORMANCE EVALUATION DATE: 12TH NOVEMBER 2012 INTRODUCTION: The purpose of this report is to critically address the expansion plan of Santa division management focused on the anticipated plant replacement. This action is aimed at improvement of the Santa division manufacturing capacity which is required for meeting demands of a new customer offering an attractive five years contract. In spite of the considered plan of expansion is perceived as a low-risk venture, the report will review the impact of accepting the contract using the given information and basing on financial (Return on capital employed (ROCE), Residual Income (RI)) and non financial performance measurement techniques, specifically the balanced scorecard approach. The following data is available for Santa division: Net profit before tax (PBIT) £ 3 mln per annum Net capital employed £ 10 million Required rate of return 20 % before tax The Following data is available on the anticipated contract: Contract duration 5 years Sales provided £ 2 mln per annum Operating costs on the contract £ 1,35 mln per annum, excluding depreciation The following data is available on the plant required: Plant replacement = annual depreciation per year Required capital outlay £ 2 mln (£ 1,5 mln of new fixed assets + £ 0,5 mln) Plant life 5 years FINANCIAL PERFORMANCE MEASURES (ROCE, RI): ROCE (also referred to as return on investment...
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...Introduction The purpose of this report is to analyse the effectiveness of KGNZ Limited’s (“KGNZ”) management team. I have been engaged to analyse the effectiveness management team and present my findings in the form of a report to the board. The purpose of the team is to manage the company’s operations and to maximise capacity and productivity within the organisation. The culture, dynamic and behavior of the team itself in relation to the rest of the organisation will determine to a greater or lesser extent its effectiveness in achieving its intended purpose. The role of the team will be examined in relation to its context both within the organisation and within behavioral theories in terms of its development and operation. The leadership within and outside the team will be examined - including relevant theoretical aspects to leadership that exists within KGNZ. The analysis of the team’s effectiveness will focus on both behavioral aspects of the team and its make-up and also specific company set objectives of the team in promoting the capacity and productivity of the organisation. In order to gauge effectiveness of the team against its current purpose it is necessary to examine specific aspects of the company that are directly within the team’s purview being issues of capacity and productivity within the organisation and how the team currently deals with these as well as make several recommendations that could improve the current status quo. In order to analyse the team’s...
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...Perbedaan PSAK Umum dengan SAK ETAP No | Elemen | PSAK | SAK ETAP | 1 | Penyajian Laporan Keuangan | * Laporan posisi keuangan * Informasi yang disajikan dalam laporan posisi keuangan * Pembedaan asset lancar dan tidak lancar dan laibilitas jangka pendek dan jangka panjang * Aset lancar * Laibilitas jangka pendek * Informasi yang disajikan dalam laporan posisi keuangan atau catatan atas laporan keuangan(Perubahan istilah di ED PSAK 1: Neraca menjadi Laporan Posisi Keuangan, Kewajiban (liability) menjadi laibilitas) | Sama dengan PSAK, kecuali informasi yang disajikan dalam neraca, yang menghilangkan pos: * Aset keuangan * Properti investasi yang diukur pada nilai wajar (ED PSAK 1) * Aset biolojik yang diukur pada biaya perolehan dan nilai wajar (ED PSAK 1) * Kewajiban berbunga jangka panjang * Aset dan kewajiban pajak tangguhan * Kepentingan nonpengendalian | 2 | Laporan Laba Rugi | * Laporan laba rugi komprehensif * Informasi yang disajikan dalam laporan Laba Rugi Komprehensif * Laba rugi selama periode * Pendapatan komprehensif lain selama periode * Informasi yang disajikan dalam laporan laba rugi komprehensif atau catatan atas laporan keuangan | Tidak sama dengan PSAK yang menggunakan istilah laporan laba rugi komprehensif, SAK ETAP menggunakan istilah laporan laba rugi. | 3 | Penyajian Perubahan Ekuitas | | Sama dengan PSAK, kecuali untuk beberapa hal yang terkait pendapatan komprehensif lain. | 4 | Catatan Atas...
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...This page intentionally left blank Business Performance Measurement Drawing together contributions from leading thinkers around the world, this book reviews recent developments in the theory and practice of performance measurement and management. Significantly updated and modified from the first edition, the book includes ten new chapters that provide a comprehensive review of performance measurement from the perspectives of accounting, marketing, operations, public services and supply chain management. In addition to these functional analyses the book explores performance measurement frameworks and methodologies, practicalities and challenges, and enduring questions and issues. Edited by one of the world’s leading experts on performance measurement and management, Business Performance Measurement will be of interest to graduate students, managers and researchers who wish to understand more about the latest developments in this rapidly changing field. Andy Neely is Deputy Director of the ESRC/EPSRC AIM Research initiative, Professor of Operations Strategy and Performance at Cranfield School of Management, and Visiting Professor of Operations Management at London Business School. Business Performance Measurement Unifying theories and integrating practice Second edition Edited by Andy Neely CAMBRIDGE UNIVERSITY PRESS Cambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo Cambridge University Press The Edinburgh Building, Cambridge...
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...Chapter 15 Operational Performance Measurement: Indirect-Cost Variances and Resource- Capacity Management Cases 15-1 Berkshire Toy Company (Source: Dean Crawford and Eleanor G. Henry, “Budgeting and Performance Evaluation at the Berkshire Toy Company,” Issues in Accounting Education, 15 (2) (May 2000), pp. 283-309.) 15-2 The Mesa Corporation (Source: Robert Capettini, C. W. Chow, and J. E. Williamson, “Instructional case: the Proper Use of Feedback Information,” Issues in Accounting Education, 7 (1) (Spring 1992) pp. 48-56.) Readings 15-1: “Using Enhanced Cost Models in Variance Analysis for Better Control and Decision Making,” by Kennard T. Wing, Management Accounting Quarterly (Winter 2000), pp. 1-9. This article points out that oversimplifications of fixed and variable costs can result in the standard costing system not being used or, if used, can lead to bad decisions. That is, misclassifications of cost behavior patterns make variance analyses “paper tigers.” For variance reporting to be useful, financial managers need to develop cost models that reflect how costs actually behave. Discussion Questions: 1. Describe the implications for variance analysis of analyzing a semi-variable cost as either a variable or fixed cost. 2. Describe the implications for variance analysis of analyzing a step-fixed cost as either a variable or fixed cost. 3. Describe the implications on operating decisions of analyzing an operation with mixed costs...
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