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MANAGEMENT CONTROL & PERFORMANCE MANAGEMENT SYSTEM - Coggle Diagram
MANAGEMENT CONTROL & PERFORMANCE MANAGEMENT SYSTEM
CHARACTERISTICS
Management Control
Concerned with the effective use of resources to achieve target
Operational Control
Concerned with day-to-day implementation
Strategic Planning
Concerned with setting a future
Take place at the top of organization
PERFORMANCE MEASUREMENT & COMPENSATION SYSTEM
Performance Management
Process of assessing progress toward achieving predetermined goals
Use the info. to effect +ve change in organizational culture, system & processes
Compensation Management
Process of managing, analyzing & determining the salary, incentives & benefits each employee receives.
Establish & implement of sound policies, programmes & pratices
BUSINESS PERFORMANCE
Non-Financial Measures
Benefits
Able to view firms as having many dimensions
Able to assess potentials
Example
Customer Satisfaction
On-time Delivery
Quality
Key Performance Indicators
Performance measure used to assess an organization's performance on its critical success factors
Financial Measures
Problems
Rely on short term views
Qualitative info. cannot be obtained
Reliance on traditional financial indicators
Example
ROI
RI
EVA
NPV
Sales
Profit
Balanced Scorecard & Strategy Map
Management system that allow an organization to focus on big picture strategic goals
Advantages
Balanced View
Modifiable
Encourage continual improvement
BEHAVIORAL ISSUES
Top management can manage risk by choosing the mix of salary & bonus in total compensation
Executive pay too high compared to that lower level employee
Recruiting, motivating, rewarding & retaining talents is critical to the success of all firm