University of Phoenix
Planning and Measuring Performance Controlling is the process of monitoring, comparing, and correcting work performance. All managers should control even if their units are performing as planned because they can’t really know that unless they’ve evaluated what activities have been done and compared actual performance against the desired standard. Effective controls ensure that activities are completed in ways that lead to the attainment of goals. Whether controls are effective, then, is determined by how well they help employees and managers achieve their goals (Robbins & Coulter, 2010). During this week’s planning and measuring performance assignment, we were asked to complete a balanced scorecard simulation, evaluate the performance of the organization, identify the performance gaps, and recommend actions to reduce the gaps (University of Phoenix, 2015). During this detailed account of my findings, I will do the following:
1. Share the results of the scorecard and post a copy of it.
2. Discuss the results of each area included on the scorecard.
3. Explain the performance gaps and what they indicate.
4. Provide a solution for each gap listed.
Balanced Scorecard The balanced scorecard functions as a feedback control for an organization which typically measures four areas that contribute to a company’s performance. These areas usually are financial, customer, internal processes, and people/innovation/growth assets (Robbins & Coulter, 2010). The scorecard categories are broken down into specific factors to be considered and organizational goals to be measured. In this case, the factors to be considered financially are quarterly profit and return on capital employed. In the customer area customer satisfaction score and recommendation rate are measured. The internal process category measures are process duplicate activities across functions and bottlenecking. Finally, for people/innovation/growth assets, employee turnover and employee satisfaction are measured. The scorecard from our simulation is displayed in the following format (University of Phoenix, 2015):
Aspect of Company Performance
Factors to be Considered
Quarterly Profit Results
Return on Capital Employed
Quarterly profits are higher than expected.
Return on capital employed is lower than expected.
Customer Satisfaction Rate
Customer Recommendation Rate (rate of new business generated by recommendations from existing customers)
Customer satisfaction is equal to goal.
Customer recommendation rate is higher than expected.
Duplicate Activities Across Functions (percent of the activities completed that are duplicated in another function)
Process Bottlenecks (percent of the process that becomes bottlenecked in an average run cycle)
Duplicate activities are lower than expected.
Process bottlenecks are equal to goal.
Employee Job Satisfaction
Turnover was far lower than goal.
Employee job satisfaction was lower than expected.
As previously stated, a balanced scorecard is a feedback control. A feedback control is a control that takes place after the activity is done. The problems have already occurred; leading to waste or damage, so this organization would likely use other controls in conjunction with this (Robbins & Coulter, 2010).
Financial Scorecard Category and Results Financial is the first category measured on the balanced scorecard. In many ways, a feedback control is the only viable type of control for the financial work area (Robbins & Coulter, 2010). The financial category factors to be considered are quarterly profit results and return on capital employed. With profits 20% higher ($6500 actual vs. $5000…