Assignment Sample on BUSN11080 Managing Organizational Health
1. Individual Essay: Organizational performance measurement
Introduction
Performance measurement system is an important aspect to monitor the progress of business operations aligned with the goal and gauging the improvement in respect of outcomes to maintain the market competitiveness. In this essay, the details of using performance indicators to analyse the everyday activities and services to generate reliable data of effectiveness and efficiency in organizational performance will be discussed elaborately.
Advantage and disadvantage of measuring organizational performance monitored through performance indicators
Performance measurement is basically an overview of the activity and improvement in strategic, financial and operational procedures to achieve the organizational objective where the use of a performance indicator helps to acknowledge the scope and magnitude of the existing system. It has been argued that the performance indicators assess the data and do a peripheral analysis against the set of commitments to forecast the growth of the organizational mission. Further, it will explain the current performance and help to create a strategic, integrated process to develop an organizational culture aiming for a consistent approach for organizational success with improving individual capabilities. Specifically, Key Performance Indicators (KPI) and metrics is helping with data driven conversations of organizational performance in business unit, project and individual’s activity relative to strategic progress to count the business position with better decision making. Performance measurement systems ensure the identification of best practices, benchmarking the business process with respect to other organizational practices, efficient and optimal use of resources and strategic changes incorporation in business plans. Performance measurement helps to translate the organizational strategy into an operational goal with improved internal communication to evaluate the cause-effect relationships and comprehensively achieve the effectiveness (Lucianetti et al., 2019).
Performance indicators help to collect necessary data to determine the organizational progress according to the business objectives with highlighting clear information of current altitude of organizational outcome with problems and trends to prioritize the process setting, policy formulation and tracking the minutes of the progress. Furthermore, KPI enables the quick access of specific information, understands the complexity and patterns of progress through effective monitoring with increased communication, goal formulation and implementation and devises the effective decision to cope up with the market competition. Performance is measured through management’s accountability and responsibility with an ethical and effective way to focus on positive customer satisfaction, stakeholder’ engagement and optimization of corporate assets. On the contrary, the negative feedback from customer and stakeholder’ unresponsiveness may provide the unethical and ineffective decision making of the management which improperly treated the organizational resources and assets (Openstax.org. 2021). Furthermore, a set of goals with realistic views that incorporate the decisions controlled by management as revenues, cost and procurement of long term assets to design the effective performance measures. On a specific note, responsibility of individual units in an organization is different and the performance measurement is done differently to assess the accountability of daily activities coordinating the business agenda.
It has been suggested that performance measurement appropriately evaluate the specific attribute of managerial role in respect to business growth where strategic business plans contribute to determine the goals and possible actions to achieve success. On a contradictory note, performance measurement accountability might be distorted by the action of managers which may result in ineffective measurement and monitoring with biased nature. The accounting information or data of performance measurement sometimes depends upon the economic factors where procurement value will vary with time, country, exchange rates, tariffs and transportation. The main advantage of using a performance indicator to monitor and measure the organizational performance is to generalize the organization tending in market operation and devise the parameters to follow for achieving the strategic goals in time and prosper revenue generation. However, organizational learning and strategic service alignment mediate the strong relation with the performance measurement system through improvement of performance and creative innovation to succeed (Yuliansyah and Jermias, 2018). More specifically, performance indicator monitoring provides the consistent basis of comparison in internal change efforts to glorify the business mission and vision in market operation. It ensures the equality and fair treatment to employees on performance through the period of employee training, development and efficiency to qualitatively perform within the timeline.
It may be opined that, the performance indicators assess the current state of company outcome through detailed analysis of process, productivity and provide a measurable way to bridge the gap between current and desired state of business goal. Moreover, metric will collect vital information over a period of time which communicates about the process or activity according to facts with simple, logical and realistic structure where individuals may assess the performance gap and requirements to meet the objective timely (Associationforum.org. 2021). Performance indicators may use financial and nonfinancial measures including profitability, sales, market share and active process of increasing productivity according to market demand. It effectively monitors daily process activity and collects crucial data which are strategic to plan accordingly and provides measures to improve the capacity in a progressive and timely manner. It will suggest the integration and frequent engagement with clear communication to transit the project vision to the individual employee and inbuilt the organizational culture cooperative in collaboration with mission. On a particular note, strategic business plans are devised with the collected data of performance indicators which positively strengthen the organizational performance and imply the role of performance measurements to obtain competitive advantage, sustainability and superiority over the market.
Customer satisfaction, growth rate, competitiveness, recognition, innovation, prioritising stakeholder demand, market reputation, advanced technology and uniqueness are the key features of performance indicators which measure the organization’s weight in a specific market. On the other hand, lack of experience, lack of involvement of senior leadership, shortage of resources, improper understanding, and data inaccuracy may lead to insufficient measurement of organizational performance where performance indicators are roughly attributed for the organizational improvement. It is relevant that improper data collection and biased information may ruin the organizational outcome and distanced itself from the organizational goal. The use of key performance indicators as a success metric will underestimate the other features which also have an effective proportion in organizational activity where lack of communication may widen the gap of organizational productivity and commitment. Specifically, the disadvantage of performance measurement is standardization where it focuses on rigid behavioural outcome and losing the creativity to implement innovative solutions (Ipl.org. 2021). It also discourages employees from experimenting new procedures for better results and sticking to a certain method for rewarded outcome and employee’s attitude will be affected by environmental factors. Moreover, every organization follows a different structure and using the same indicators process will eventually dismay the organizational performance.
It may be argued that the use of performance indicators in organizational performance measurement is effective to achieve short term results where it may not consider the long term result significantly. More relatively, sales organizations often set targeted financial amounts of revenue where employees only focus upon achieving the target irrespective of consumer need and may lose the consumer’s confidence. Service quality and customer satisfaction are key points to achieve long term financial goals with increased loyalty of customers and repeated business transactions. On the contrary, KPI needs time and is ineffective for immediate information for measuring the performances as well as expensive enough to carry out where it also increases the internal competition within employees for job status, pay and position. The performance measurement also suffers from favouritism which may discourage the employee to perform according to business objectives with less effort as well as it may provide false positive and negative results easily. Moreover, the use of performance indicators may pressurise the new and untrained employees to reach the metric which is unfair and gradually decrease the output of the organization. Use of metrics may result in avoidance and barred the communication naturally along with negative commitment as internal competition will raise the order of conflicts among the teams and individuals.
More often the performance measurement indicators are not involved with employee personal growth cycle and need adequate motivation to be a successful business unit where goals are achieved accurately. However, sustainable decisions will need to be developed in the era of industrial revolution 4.0 where social, economic and environmental improvement will be balanced through the use of data, information, knowledge and technology in performance indicators (Sénéchal, 2018). On the other hand, efficiency of the performance indicator does not always stick to the indicated features which may also be simplified by external resources such as employee motivation and leadership employee relationship along with environmental factors. It may be stated that the use of performance indicators help the organization to meet the objective and perform according to the commitments where the free and fair policy will help to obtain the ethical atmosphere to mitigate the conflicts affecting organizational outcome. The measurement of performance will clearly project the company overview to the owner and stakeholder and depending on the condition outlook of the organization will authentically improve with optimized resources.
Conclusion
From above all discussions, it has been concluded that the use of performance indicators to monitor and measure the organizational performance will effectively change the employee attitude and organizational culture to achieve the business commitment within time. It is also not error free speculation of the overall organizational performance which affected the employee attitude and motivation with several ill-effective measures.
References
Associationforum.org. 2021. Performance Measurement & Metrics – Association Forum. [online] Available at: <https://www.associationforum.org/mainsite/browse/professional-practice-statements/performance-measurement-metrics> [Accessed 10 November 2021
Ipl.org. 2021. [online] Available at: <https://www.ipl.org/essay/Discuss-The-Advantages-And-Disadvantages-Of-Performance-F34QCP7EAJPR> [Accessed 10 November 2021]
Lucianetti, L., Battista, V. and Koufteros, X., 2019. Comprehensive performance measurement systems design and organizational effectiveness. International Journal of Operations & Production Management.
Openstax.org. 2021. 12.1 Explain the Importance of Performance Measurement – Principles of Accounting, Volume 2: Managerial Accounting | OpenStax. [online] Available at: <https://openstax.org/books/principles-managerial-accounting/pages/12-1-explain-the-importance-of-performance-measurement> [Accessed 10 November 2021].
Sénéchal, O., 2018. Performance indicators nomenclatures for decision making in sustainable conditions based maintenance. IFAC-PapersOnLine, 51(11), pp.1137-1142.
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