People Tend To Do What You Inspect Rather Than What You Expect
Expectation sets the height of the bar, but it is regular inspection that resets the height of the bar so as to ensure it is achievable. The common notion is that what gets measured, gets performed. This is why it is useful to have key performance indicators. They serve to inform management which aspects of the business are performing according to its intended objectives or otherwise. They act as a preliminary diagnostic tool that enables management to identify areas for improvement. The roles of the key performance indicators also add meaning to the financial and accounting information as well as to provide a quick overview of the company's performance.
In theory, if you need to inspect, supervise and manage the staff frequently, the chances are you have hired the wrong candidates. In reality, it is difficult to obtain a good fit of the right people and therefore inspection is necessary.
The key performance indicators used by the company may include financial as well as operational parameters. Financial ratios are common yardsticks derived from financial and accounting statements. The operational parameters may include more generalised criteria such as quality goals, reject rates, production targets as well as balanced scorecards, etc.
Most companies use the budgeting process to formulate the key performance indicators. However, the problem is that the key performance indicators in the budget are artificially stretched so that they become 'management' goals. The people who are supposed to deliver those goals on the ground may not be committed to them. This renders the whole budgeting exercise futile and a waste of time. Yet the irony is that companies expended immense resources and months of preparing for the annual budget.
Good companies focus on measurements in many ways. They share the information on the key performance indicators to their staff so that they are aware and can be committed to achieving those targets. These good companies hold their staff accountable to achieve those indicators. Although stretched, they must be achievable. The key performance indicators are regularly tracked and monitored. Strategies are reviewed and changed periodically to ensure alignment with the market dynamics.
Inspection should be followed with carrot and stick programmes to ensure that staff are rewarded or penalised for not achieving certain measurements. If the staff are unable to achieve their goals, one needs to also enquire whether it was a question of lack of proper training or motivation or unrealistic goal. This is why goals need to be inspected as well as measured if possible.
Related Tags: balanced scorecards, turnaround, performance measurement, operational parameters, financial ratios
Dr Mike Teng (DBA, MBA, BEng) is the author of best-selling book, "Corporate Turnaround: Nursing a Sick Company back to Health." He is known as the "Turnaround CEO in Asia" by the media.http://www.corporateturnaroundexpert.comhttp://www.corporateturnaroundcentre.com
Your Article Search Directory : Find in ArticlesRecent articles in this category:
- 5 Reasons That a Restaurant Should Use a Restaurant Recruiter
Have you ever noticed how many restaurants pop-up over time but then disappear just as quickly? Runn - Does Money Motivate?
Some say money can't buy happiness, but data shows that for those who can barely pay the monthly bil - Because Workforce Friendly Policies Payoff
Employer-sponsored wellness programs are becoming more popular as companies strive to maintain a hea - EAP Value
Life would be simpler if we could set aside our personal issues and emotional baggage when the workd - Hiring an Expert SEO Company to Improve Your Online Business
Search Engine Optimization or SEO Services are used to make your website or online business popular - Why Safety Training at Workplace is Important
Safety training at workplace should be one of the top priorities of your business. An effective safe - Team Building: Brain and Sweat to Attain Company's Central Goal
Are you one of those employees branded ineffective and unproductive? Reasons might be the sense of d - Security Alarm System
It is a must that houses and offices install a security alarm when we speak about safety reasons. Se - Workplace Safety Tips
When we speak of safety based on books, its importance is next to food. It is essential to all indiv - The Benefits Of Lease-to-own Properties
One of the hit real estate investments today is to buy properties that will later be put up as "leas
Most viewed articles in this category:
- A Map Mural for Your Business
Yay! That retail store you've been planning has finally opened its doors and you are officially in b - Attracting Customers Through An Improved Shopping Experience
So many new shopping malls and supermarkets are put up every year. Many more are already in business - "To Oz!": Leading a Resilient-High Achievement Organization
One of my favorite movies is "The Wizard of Oz" based on the book by Frank Baum. The story is about - 5 Critical Items Never to be Included in Cost Benefit Analysis
When dealing with decisions using Cost Benefit Analysis techniques it is very important to follow th - Collaboration and Change
I’m an expert on change and leadership, but my most popular speaking topic this past year, and - Workplace Gap
In your workplace, are you a manager with a smart group of people and they aren't responsive to your - Leadership - The Proper Relationship with Subordinates
In the army, "the men" are kept separated from those known as "the officers." This comes from the id - The 10 Most Asked Questions of Cost Benefit Analysis
When dealing with decisions using Cost Benefit techniques it is very important to follow the proven - Cubicle Space Planning
Space planning is an essential element of any project and efficient planning serves the dual purpose - Why Passenger Surveys are a Transport Operators Best Friend
Public transport operators who already use passenger surveys may not fully appreciate the multiple b
