Performance Measurement Assignment Sample
Introduction
A measure is a method that we do on a regular basis in a number of settings and circumstances, and it is referred to as such in this context. Prior to leaving the home for work, we may use a thermometer to decide whether or not we need to put on our coats. We may also use a thermometer to determine whether or not we need to put on our jackets. As an example, a craftsman must continually examine his work to guarantee that it will fit in with the rest of the group; a sales manager must verify the amount of sales for each product or service on a regular basis in order to compare it to forecasts; and so on.
Critique traditional performance measurement tools used by SBK
The notion of representation must first and foremost be grasped before one can comprehend the concept of measurement. The ability to convert “qualitative” notions such as relations and operations into suitable “quantitative” […] relations and operations with well-defined attributes’ is also necessary. [105]. Consider the difficulties of weighing a variety of various sorts of commodities as an example. As much as possible, we assign numerical values to the weight property of items in such a way that connections between objects, such as “heavier than” and “lighter than,” and mathematic operations such as addition and subtraction, are preserved while the weight attribute of objects is being measured. To generate and assess ideas and hypotheses, observation, generalisation, and measurement are used in many parts of life, including science, to gather information and gather evidence. Measurement and extension are particularly important in research, where concepts and hypotheses are produced and assessed via the use of measurement and extension techniques. The following scenario illustrates what might have occurred to the physical sciences if scientists had not been able to set measuring standards for things like weight and length.
Work or operation performance may be stated as “the degree to which it is effectively performed” [95] when it comes to work or operation performance. Furthermore, it may be measured in relation to the passage of time, which has been increasingly prominent as a topic of research over the last several decades. By analysing its performance, which is referred to as performance evaluation in the industry, it is possible for an organisation to determine whether or not it is on track to fulfil its goals. It may also have an impact on the decision on whether or not additional measures should be adopted to help in the fulfilment of those objectives. Early on in the performance review process, financial measurements were the major emphasis of the assessment process, and this continued throughout the process.
The 1980s saw a significant increase in the number of writers who expressed their dissatisfaction with this one-dimensional approach to writing and literary criticism, and the tendency has persisted to the present day.
New techniques to performance assessment were created as a consequence of changes in global marketplaces, as well as increased competition that firms were facing in the 1990s. Strategic planning and goals, as well as a more “balanced” and multi-dimensional approach to issue resolution in general, are essential in order to achieve success. In terms of assessing the performance of your employees, the performance indicator is by far and away the most important tool that you have at your disposal.
Critically discuss how SBK could use the BSC to align its strategic, managerial and operational requirements.
Today, there is universal agreement that performance must be assessed on a regular basis and only when there is a legitimate reason to do so (surveys can be found in [Sahade,2018). In addition to traditional financial indicators such as profit and return on investment, organisations frequently consider non-financial measurements in areas such as operations, customer satisfaction, and employee morale, among other things, to determine their overall performance, in addition to traditional financial indicators. When measures are implemented across many organisational levels, they are often utilised to support the operations of particular departments in order to improve the overall effectiveness and efficiency of the whole organisation. Despite the fact that performance assessments are required for profit-driven organisations, they are becoming more relevant for non-profit and public organisations as well.. Performance assessment approaches are used in a wide range of diverse disciplines, including public administration [59, 85], healthcare [67, 82, 86], and education [53, 113], among others [59, 85]. Because they are not only concerned with profit maximisation, non-profit and public organisations vary from their commercial counterparts in that they make money in a different manner than their commercial counterparts. Performance evaluation in such organisations is being driven by a number of factors, some of which are as follows: a more market-oriented vision of government, a lack of resources, the quest of efficiency, and the expectation of accountability, to mention a few.
Performance goals
Interest in process variables has increased significantly over the last few years, and this has led to a rise in the number of companies offering process variable measurement.
During the recent decade, a substantial amount of work has been devoted to the reengineering of business processes, in part because the quality of an organization’s processes has a major influence on its success (or failure). This enables them to analyse their existing condition and ensure that the required level of performance is attained in the short term. This helps them to examine their present condition and ensure that the target level of performance is attained when all parties participating in the process are monitoring their own performances. Additionally, it is possible to discover process difficulties as well as prospective areas for process improvement throughout the course of the process review. This is not unexpected given the importance of measurements in modern standards and models for process maturity and improvement, such as the Capability Maturity Model Integration (CMMI) [109] as well as the ISO/IEC 15504 and ISO 9000 standards.
Performance objectives
Identifying and understanding the correlations between indicators is important in the area of statistics since it allows for more in-depth study into the dynamics of a specific region, as well as the prevention and management of potential conflicts in the future.
Although more than a dozen techniques to the modelling and evaluation of links between performance indicators have been offered in the literature [8, 100, and 111], a relationship-based method [8, 100, and 111] is the most current of these approaches. In contrast, only a few number of systems are really capable of carrying out such obligations in an effective and efficient manner. A performance measurement system that is capable of monitoring and regulating the relationships that arise between performance measures as a result of these variables should be used to monitor and manage these relationships.
Measures that may be repeated again and over again are those that are considered to be flexible. The kinds of measurements in measurement theory are divided into two categories: basic measurements and derived measurements [105, 111]. The most fundamental measurements are those that are collected straight from the measuring device. No additional source was used to get these data, which were acquired straight from the environment. A fundamental measurement method is a technique by which fundamental measurements are defined, and a fundamental measurement process is a process by which fundamental measurements are defined. A numerical system is created by changing an observable or empirical system into a numerical system. This is the method through which basic measurements are established. A fundamental measurement may be characterised as a process through which fundamental measurements are defined, as well as an actual measurement. Instead of referring to the measurements themselves, the phrase “measurement created from existing measures” refers to the process by which new measurements are defined in terms of present measurements. It has already been noted that the measures themselves should be seen as fundamental information resources that may be joined with one another using arithmetic and/or logical operators to allow for the computation of new, derived measures to be calculated.
Performance measures
The ability for measurements to be parametrized is another demand, since it will improve the reusability of present data sets, which is also an extra requirement.
The fact is, although many systems claim to be capable of recycling measurements, only a few really do so, either because the equations are hardcoded in or because the system does nothing more than re-produce data from an external information source, which is an issue for many systems. It is preferable to think of measures as parametrizable data sources that may be merged to create whole new measures when the circumstance calls for it, rather than as static data sources (Mangestika,2021).
Standardisation It is difficult to keep track of all of the projects that are presently ongoing in most organisations since there are so many of them spread across so many different departments and organisational levels. Although it is possible to present a full picture by merging several data and performance indicators, this may be a time-consuming and challenging task. It is incorrect to believe that all of them are defined the same manner, and that they may even be recorded in unclear ways, making it hard to identify them from one another (Helmold,2019).
Performance targets
According to the results of a case study done by Lohman et al. [76], integrated performance measurement in supply chain management necessitates the use of a common set of standardised performance indicators, referred to as the metric dictionary, in order for the process to work effectively. This dictionary provides definitions for every current and projected performance indicator, and it is based on the same continually consistent basis as the rest of the lexicon. It is available in both English and Spanish. In order for metrics and performance indicators to be readily integrated into an organization’s operational processes and procedures, it is vital, as Eckerson [30] points out, that they be based on widely accepted definitions.
While several types of metrics and performance indicators have been presented in the literature, only a small number of them have been used in real practise. Several others fail to take into account all of the aspects that are significant in the issue of performance evaluation, while others just provide a cursory summary of the most important topics involved.
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In order to increase profitability, APL models, according to Epstein and Westbrook (2001), may assist firms in discovering, measuring, and analysing the causal relationships that exist between company activities and profits. A range of stakeholder behaviour models of various types are included in this framework in order to draw attention to the potential chain of consequences that may arise as a result of changes in stakeholder behaviour. This framework includes a variety of stakeholder behaviour models of varying sorts and sizes. The four important components of the model are as follows: the supplied product/service; customer actions; and financial implications. Once you have completed your company activities, you may advance to the model’s four major components. Customers’ actions, given product/service, company actions, and financial effect are the four primary components of APL. The following are examples of business actions: Following the definition of business strategy, the APL model proceeds to the other three key components of the model. These include the product or service that was supplied, consumer behaviours, and financial effect. It is necessary to analyse the behavioural characteristics (as well as their perceived and held attitudes) of the participants during each of the components. (Mio, 2021)
Data analysis
A few examples of the duties that fall within the purview of the business action component include the assessment of learning, workload, reward and recognition, and the development of organisational culture, just to mention a few. It is possible to examine employee behaviour and management actions associated with the business action component, such as management and employee motivation, as part of the overall firm action component evaluation. The use of data mining methods and tools allows for the tracking and analysis of a wide range of product/service indicators, including pricing and quality, as well as the views of both workers and consumers, among other things. Along with client purchasing behaviours and the percentage of criteria met by customers, other factors such as repeat purchases, cross-sell rates, and fresh referrals may be taken into account. Examples include: Through the use of technology, it is possible to monitor and measure client attitudes in real time, such as customer satisfaction and buy intent, among other things. Also possible are evaluations of the economic effect based on parameters such as customer revenues and profitability, the number of new customers recruited, and the percentage of market share attained, among other things.
Methods
In the opinion of Epstein and Tundys, (2018), organisations can achieve significant improvements in performance by providing managers with a better understanding of the behavioural linkages that exist between strategy, corporate operations, product/service upgrades, customer behaviour, and economic consequences. They have certain conceptual similarities with business service companies (BSCs), and well-known standard metrics of financial performance have previously been created for them so that they and BSCs may be compared with one another. Non-financial indicators, in contrast to financial indicators, have a tendency to trend in the opposite direction of financial indicators over time. In order to establish standard techniques for non-financial indicators, a number of different standards organisations are now working on the issue, with the ultimate objective of providing standard processes. Various quality management methodologies and management systems such as Total Quality Management, Six Sigma, and the European Federation of Quality Management (EFQM) Excellence Model, among others, may be used in combination with one another to accomplish long-term financial forecasting. In a project that was established in collaboration with top public accounting firms, the International Organization for Standardization (ISO) is attempting to standardise non-financial data. As a consequence of a collaboration between the Supply Chain Council and the Product Development and Management Association, reference models for business processes are currently being developed. These reference models will comprise, among other things, particular performance measures as well as specific performance indicators for each process that will be included in the process (Abubakar,, 2018).
Recent years have seen a reduction in the number of BPM reference models that are publicly available for download, from a large number to a handful. As a result, the balanced scorecard has been widely used as a strategic measuring tool, and quality programmes have proliferated, evolving into integrated business performance assessment systems that are more closely connected with the company’s strategic goals. Additionally, the business process management (BPM) systems that underpin them must be exceedingly different and exclusive, including specialised sequences of key performance indicators (KPIs) that are specific to the plans themselves (KPIs). When compared to other frameworks, the existence of particular measures and the arrangement of metrics are less likely to occur in these strategically connected frameworks than they are in other frameworks. New product development and supply chain management are examples of processes that are more likely to be covered by a reference model because they are not fundamental processes, or because they are extremely consistent and span across many organisations, rather than because they are not core processes. New product development and supply chain management are examples of processes that are more likely to be covered by a reference model because they are not fundamental processes, or because they are extremely consistent and span across many organisations. For example, new product development and supply chain management are two processes that are more likely to be covered by a reference model because they are not essential processes, or because they are very consistent and can be used across a wide range of organisations. To provide an example, new product development and supply chain management are two processes that are more likely to be covered by a reference model than others because they are not critical processes or because they are very consistent and can be used across a broad variety of organisations. Reference models may be useful in assisting practitioners with the early design and implementation of a business process management system, but these models do not address how to develop a BPM system that is strongly related to a particular company strategy (Azwari,2019).
Analysis tools
Because of the difficulties in analysing intangible assets (human and information capital), as well as the importance of innovation, performance evaluation of intangible assets may be especially challenging to carry out successfully.. According to a research done by the International Management Association, more than half of those who responded said that their business process management system was insufficient or less than competent in this area. Respondents from all around the world were asked if they considered intangible asset performance metrics were very good or exceptional in the survey’s questions about intangible asset performance measures. In response to the survey, less than ten percent of individuals who participated said they were very excellent or extraordinary (Emawan,, 2021).
As part of their research for the Balance Scorecard Collaborative, which was conducted in conjunction with the American Institute of Certified Public Accountants, they discovered that they had a problem. The study examined current attitudes and practises in the field of performance evaluation systems. The findings of the investigation suggested that they were experiencing difficulties. A decision was made to conduct on-site interviews with a smaller selection of organisations after the conclusion of the survey, which received responses from over 2000 people. According to the poll’s findings, just 35% of respondents believed their business process management systems were successful, and an overwhelming majority (80%) said the information provided by their BPM systems was only “sufficient” if not “bad.” A number of new problems were discovered over the course of the study, which was completed in December.
Despite the fact that the significant majority of respondents acknowledged that their BSC system did not fulfil the requirements defined by the BSC designers, the vast majority of respondents said that they continued to use their BSC systems (Kaplan and Norton). To successfully execute performance reviews, it is important to have employee involvement, education, and leadership on board. It is also vital to have a change management plan in place in order to conduct a performance evaluation. Increased organisational growth and leadership, as well as greater financial performance, better operational performance, better decision-making, and enhanced strategy and alignment, are just a few of the advantages that may be realised. People have voiced unhappiness with the review process, arguing that it is difficult to get buy-in from all parties involved in the process. Ineffective leadership, inadequate education, and even the assessment method itself have all been criticised by others. It is necessary to solve a number of concerns such as improving information quality as well as improving information delivery technologies, among others, in the near future. When financial experts compare project management solutions to accounting solutions used by their counterparts, they believe that project management solutions have a greater success rate (Elgazzar,, 2019)
According to a recent KPMG poll of company and government leaders in the United States and Europe, one of the most often expressed complaints was the system’s failure to produce valuable information that could be utilised to assist decision-making. Among other things, the research discovered that business process management systems are not linked to strategic business metrics, rely on lagging indicators rather than leading indicators, are insufficiently connected to internal and external information, and place an excessive emphasis on financial measurements. Business process management systems are ineffective for a variety of reasons, according to the findings. These include the measurement of things that are easily measured rather than things that should be monitored, data inaccuracy, measurements that are too complicated, and users who are unfamiliar with the system and its metrics.
Overall, performance evaluation should be comprised of three major components: performance should be clearly defined; performance should be constantly monitored; and incentives should be based on the performance measured. A clear description of performance, as well as dependable monitoring of that performance, are other necessary needs (Austin & Gittell, 2002).
Recommendation
Nonetheless, it is probable that the universal acceptance of these three conceptions is erroneous in its present form, contrary to what has been suggested in the literature. However, as the authors point out, there have been instances in which organisations have purposefully disregarded one or more of these three criteria while still maintaining high levels of performance as compared to their rivals. According to the generally recognised performance model, the two most significant sources of reward for workers are compliance and extrinsic motivation. They contend that these approaches are more likely to produce undesirable outcomes such as information quality distortion, the diversion of employee effort away from genuine organisational objectives and toward objectives that are more easily pre-specified and measured, and the degradation of organisational performance. Rather of using a traditional performance assessment technique, the organisations used an ambiguity- and intrinsic-incentive-based performance evaluation approach created by the researchers to assess their performance in uncommon settings. These strategies often provide high-quality information; but, in order to decide the most effective course of action in a given scenario or situational environment, they need collaboration across organisational levels, which is not always available. A further advantage of the approach is that, since people are seldom recognised in particular performance situations, the “information-reducing” impact of anxiety is kept to an absolute minimum, which is a positive outcome of the technique.
Conclusion
In addition to this, internal motives provide further advantages. When it comes to the transmission of tacit knowledge, intrinsic motivation is often essential in order for the process to be effective.
The ability to encourage students on their own terms allows them to learn more effectively and is essential for the development of creative thinking abilities in the classroom. In situations where it is difficult to identify all of the important employee activities and outcomes that must be performed in order to achieve the intended goals, relying on intrinsic motivation can help to overcome the difficulty of identifying all of the important employee activities and outcomes that must be performed in order to achieve the intended goals.
Internal motivation, on the other hand, has its own set of challenges, as we shall see in the next section. However, changing a person’s intrinsic drive is a time-consuming and uncertain process with unknown outcomes. Having high intrinsic drive may occasionally have a negative influence on one’s decisions or behaviours, especially if one’s intrinsic motivation is strong. Aside from feelings of jealousy and revenge, extrinsic motives might include a desire to rule, which can serve as a secondary source of drive in certain situations. In order to facilitate the deployment of more adaptive organisational behaviour, it may also be necessary to modify the extrinsic motives of employees.
References
Abubakar, A., Hilman, H. and Kaliappen, N., 2018. New tools for measuring global academic performance. Sage Open, 8(3), p.2158244018790787.
Anning, F., 2018. An Empirical Assessment of Performance Measurement & Management of the Public Sector by Way of the NPM Tools: A Review of the Public Sector of Czech Republic. Available at SSRN 3290055.
Azwari, P.C., Rijal, K., Safitri, N. and Saputra, R., 2019, November. The Financial Performance Measurement Model Modification Using Tools of Ritchi Kolodinsky and International Zakat Standard of Management (ISZM). In International Conference of Zakat (pp. 137-159).
Elgazzar, S., Tipi, N. and Jones, G., 2019. Key characteristics for designing a supply chain performance measurement system. International Journal of Productivity and Performance Management.
Elmgasbi, A., 2019. Revision of Performance Measurement Tools and Methods. e-Finanse, 15(2), p.20.
Emawan, D., Pratama, A.T. and Nasution, H., 2021. PERFORMANCE MEASUREMENT TOOLS (PMT) FOR GAS ENGINE GENERATOR (GEG) POWER PLANTS: A CASE STUDY AT LEADING MEDIUM ENERGY COMPANY IN INDONESIA. International Journal of Industrial Management, 11, pp.235-249.
GROSSU, D. and KAĻĶIS, H., 2019. PERFORMANCE MEASUREMENT TOOLS FOR TOTAL QUALITY MANAGEMENT IN APPLICATION TO HEALTHCARE ENVIRONMENT: A QUALITATIVE SYSTEMATIC REVIEW. Journal of Economics and Management Research, p.82.
Helmold, M. and Samara, W., 2019. Progress in performance management: Industry insights and case studies on principles, application tools, and practice. Springer.
Khalaf, K.A. and Al-Ross, S.A.A., 2018. The Impact of the Contribution of Performance Measurement Tools; HR Balanced Scorecard and Metrics, in Enhancing Employees Performance” Empirical Study on the Investor Relations Departments in the Palestinian Public Shareholding Companies.
Mangestika, G., Wulandari, S., Aurachman, R. and Alam, P.F., 2021, September. Designing A Performance Measurement Tools at SMASH. ID Digital Startup with Balanced Scorecard Method. In 5th Global Conference on Business, Management and Entrepreneurship (GCBME 2020) (pp. 758-762). Atlantis Press.
Mio, C., Costantini, A. and Panfilo, S., 2021. Performance measurement tools for sustainable business: A systematic literature review on the sustainability balanced scorecard use. Corporate Social Responsibility and Environmental Management.
Sahade, S., Ngampo, M.Y.A. and Abd Rijal, H., Analysis of the Application of the Balanced Scoredcard as an Alternative to Performance Measurement Tools at Lembaga Penjaminan Mutu Pendidikan (LPMP) in South Sulawesi. In Seminar Nasional LP2M UNM.
Trincă, V.T., 2020. Lean and Quality Management Tools Used in Performance Measurement. Revista de Management Comparat International, 21(5), pp.719-729.
Tundys, B. and Wiśniewski, T., 2018. The selected method and tools for performance measurement in the green supply chain—survey analysis in Poland. Sustainability, 10(2), p.549.
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