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Performance Measurements

PerformanceMeasurements

PerformanceMeasurements

Performancemeasurementshould be ableto quantitatively telltheuser crucialthingsabout a companysgood,servicesandtheproccesesundergoneto producethem. Oftentheycan be toolsthat helpusers understandthebusiness,manageandimprovebusinessprocesses.Performancemeasurescan be financialandnon-financial in naturebothservingthevarioususers of businessinformation.Finncial performancemeasuresincludeanalysisof theaccounting recordsof thebusiness.Goingthrough thefinancialstatements(Balance sheetandthestatementof financialperformance)allowsusers to gaugeandmeasureperformance.There can alsobe otherfinancialstatementslike thecashflow statementwhich showstheratioof moneythat comesinto thebusinesswith thatgoingout of thebusiness.Otherfinancialmeasuresincludelookingat theequitysectionoff thebalancesheet,analyzingtheaccountsreceivables andpayables andusingtheaccounting ratios.Non-financial measuresincludehavingemployeediscussions,customersatisfactionfocusgroupsamong others (Knight &amp Satchell, 2002).

Strategicmeasurementscorecard

Strategicmeasurementscorecard can be definedas a setof givenmeasuresthatcompaniesuseto evaluatetheperformanceandmotivate employees.Itallowscompaniesto bridgethegapexistingbetween strategyandactions.Italsotriesto involvea widerrangeof users in organizational planningactivitiesandsoreflectsomeof thecrucialfeaturesof thebusiness.Thesemeasurescan be dividedinto four perspectivesoutlinedas followsFinancial which measurescreditors,shareholders,andotherstakeholders to assesstheperformance.Second,Internal businessprocesswhich primarilyexaminestheefficiencyof existingbusinessprocesses.Third,Learning andgrowthwhich essentiallymeasurestheeffectiveness of employeetraining.Lastly,customerthat fundamentallyevaluateswhethercustomerexpectations getmet.

(Neely,2001).

Non-financialmeasures

Nonfinancialmeasurescan be describedas thosefactorsthat donot havebusinessfeaturesin them. Theycan be of greatassistanceto anorganization`sperformancesince theyholda keypartamong otherconsumerexpectation.Someof themajorimportanceof non-financial measurescan be thatitprovidesgroundsfordecisionmaking.Italsoreflectsthecustomerneedsandthereforevital.(Tonchia &amp Quagini, 2010).

Conclusion In businessperformancemeasurementcan be crucialas itallowsmanagementgaugeitself andfindotherefficientwaysof maximizing profits.Abalancedscorecardcan be a goodsystemto measureperformanceand,therefore,can be usedin variousorganizations.

References

Knight,J. L., &amp Satchell, S. (2002). Performancemeasurement in finance: Firms, funds and managers.Oxford: Butterworth-Heinemann.

Neely,A. (2001). Businessperformance measurement: Theory and practice.Cambridge: Cambridge University Press.

Tonchia,S., &amp Quagini, L. (2010). Performancemeasurement: Linking balanced scorecard to business intelligence.Berlin: Springer-Verlag.