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PART A: THE ROLE OF PERFORMANCE MANAGEMENT :explode: :fire: - Coggle…
PART A: THE ROLE OF PERFORMANCE MANAGEMENT
:explode: :fire:
WHAT IS ‘PERFORMANCE’ AND ‘PERFORMANCE MANAGEMENT’?
1. Performance
Can be
quantitative
(e.g., profit) or
qualitative
(e.g., service quality).
Varies across different organizational levels and stakeholders.
Example
, a Qantas
customer
may see Qantas’s performance in terms of
on-time departures
or the comfort of the cabin seating. An
investor
may be more interested in
its financial performance
. A member of the
public
living near an airport may be more interested in the
airline’s environmental performance
.
Involves
trade-offs
between
short-term and long-term goals.
2. Performance measurement
Uses
specific scales
(e.g. a metre in length, a tonne of weight, one thousand dollars)
Performance indicators
signal trends
rather than exact values.
PERFORMANCE MANAGEMENT AND ITS LINKS TO STRATEGY
Management Control
: Ensuring that the strategy is achieved through performance management.
Performance Management Process:
Defining necessary performance.
Measuring performance.
Reporting and monitoring performance.
Taking deliberate actions (hành động có chủ đích) to improve performance.
Value Creation
: Performance as a method of creating value, interpreted relative to targets, trends, or benchmarks.
Holistic (toàn diện) View
: Performance should be viewed from
multiple dimensions (khía cạnh )
, not just financial.
Quantitative dimension vs Qualitative dimension
The
financial dimension
is a
subset
of the
quantitative dimension
, focusing solely on monetary metrics, whereas the quantitative dimension includes all types of numerical data.
Qualitative Dimension
: This dimension involves
non-numerical
aspects of performance, such as employee satisfaction, customer feedback, and brand reputation. These measures are often subjective and based on opinions or perceptions.
Dollar sales per full-time employee (FTE) is considered a performance measure in the
Quantitative dimension
because it involves numerical data that can be measured and analyzed. It quantifies the amount of sales generated per employee, providing a clear, countable metric.
While it does have a financial aspect (dollar sales), the key point is that it
measures productivity in numerical terms
,
not just financial health
. The
Financial dimension focuses specifically on monetary metrics like profit, revenue, and expenses
, whereas the
Quantitative dimension includes all types of
numerical data
, whether financial or non-financial.
FINANCIAL PERFORMANCE MANAGEMENT
Encompasses multi-period, life cycle approaches.
Analyzes organizational value chains and business processes.
Assesses the entire supply chain and compares with competitors.
NON-FINANCIAL PERFORMANCE MANAGEMENT
Uses metrics like average room rate, occupancy rate, and revenue per average available room (RevPAR) in the accommodation industry.
Data sources
: Includes accounting by-products, non-accounting systems, external surveys, published data, and stock exchange data.
THE MEASURABILITY AND REPORTING OF PERFORMANCE
"What gets measured, gets done"
emphasizes that measuring performance focuses attention and drives actions = by measuring performance, you encourage people to work towards those goals and make improvements.
Net Promoter Score (NPS):
Measures customer loyalty by asking how likely they are to recommend the company.
Used by many companies, including Qantas, to gauge (đánh giá) customer satisfaction.
Public Sector Performance:
Uses non-financial measures to report success (e.g., community safety, crime statistics).
Performance indicators reflect outcomes influenced by various social factors.