Professional Documents
Culture Documents
Management Program
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Measurement Slide 1 of 2
• What is Measurement?
• Measurement is recording the quantitative attributes of any activity, event,
output, equipment, person, organization or anything – which has any
quantitative recordable attributes
• Measurement is a process of obtaining the magnitude of quantity in any unit.
• Measurements can be accurate or may be judgmental
• Accurate
– Length, distance, time, weight, money, profit earned, patient treated, units manufactured,
houses constructed etc.
• Judgmental
– Comfort, Feeling, Satisfaction, Taste, Smell – He is not very happy even he got first position –
here we are talking about feeling of someone, the taste of the food is not good of any
particular restaurant – may be someone likes that taste – Chocolate and Cheese many
persons like the taste many dislike – however we can scale these 0 - 10
• We do lot of measurement in all our life almost on daily basis – watching our
weights, time taken for some process, efforts required to perform any job,
etc.
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Measurement Slide 2 of 2
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For this presentation
purpose, we will discuss the
Performance Management
of Organizations, where
achievement of their
Objectives is the main
measurement.
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Organization’s Objectives
• Commercial Organizations
– Profitability
– Expansion
• Social Organizations
– Providing social services
– Collecting Donations
– Helping others
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Strategy towards Performance Management
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Why Performance Management
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Critical Factors for High Performance
1. Strategic Direction
2. Business Plan
3. Core Activities for Business Plan – Departmental Profile
4. Organizational Culture – Attitude, Values and Discipline
5. Setting Targets and Key Performance Indicators – For Departments, Employees
and Machinery
6. Resource Management – Commonly 4Ms
1. Man Power (Human Resource)
2. Material (Stocks)
3. Machinery (Fixed Assets)
4. Money (Funds)
5. Energy
6. Knowledge
7. Time
7. Costing, Contribution Margin and Breakeven Analysis
8. Budgeting
9. Systems, SOPs, Controls and Policies
10. Knowledge Management
11. Role of IT
12. Role of Accounts Department
13. Risk Management
14. Performance Measurement
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Strategic Directions & Management
• Strategic Management is defined as the set of decisions and actions that result
in formation and implementation of plans to achieve a Company’s objectives.
It comprises nine critical tasks.
1. Formulate the company’s mission, purpose, philosophy and goals
2. Conduct an analysis that reflects the Company’s internal conditions and capabilities.
3. Assess the Company’s external environment.
4. Analyze the Company’s options by matching its resources with the external environment
5. Identify the most desirable option by evaluating the each option in the light of Company’s
mission
6. Select a set of long-term objectives and grand strategies that will achieve the most desirable
options
7. Develop annual objectives and short-term strategies that are compatible with the long term
objectives and grand strategies
8. Implement the strategies choices by means of budgeted resources allocations in which the
matching the tasks, people, structures, technologies and reward system
9. Evaluate the success of the strategic process as a input for future decision making
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Strategic Directions
• Any mid term and short terms planning are based on the Strategic Directions
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Business Plan
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Core Activities - Departments
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Departmental Profile
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KRAs, KPAs and KPIs
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Organizational Culture for Performance
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Resource Management
– Human Resource
– Fixed Assets
– Stocks
– Funds
– Energy
– Time
– Knowledge
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Fixed Assets
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Funds
• Funds are always considered as blood of the Organization
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Energy
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Time
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Knowledge
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Human Resource
• Most Important Resource – The employees should be capable to perform, having required
capabilities and willingness to take responsibility.
• Human Resource is the most important Resource for any Organization as this is the
resource, which controls and utilize all other resources of the Organization.
• Have Job Analysis and Job Descriptions in writing and accepted by the Employees
• This will change the mindset and attitude of the employees towards his/her responsibilities
• Reward properly
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Costing, Contribution Margin and Breakeven
• Costing
– The process of identifying and evaluating the Production Cost. Costing is
accumulation of total expenditure for producing a product
• Contribution Margin
– Contribution is the difference between Sales Price and its direct variable cost
of the unit – the Contribution Margin helps in determining the minimum sales
targets and guidance as how profits can be increased
• Breakeven Analysis
– Based on the working of Contribution Margin, we can compute breakeven
analysis. Breakeven is the stage of the Business – where organization is in
balanced state – not earning any profit neither having any loss
– Breakeven Analysis can be prepared of multiple types – Cash Breakeven –
whether any particular equipment or product is generating enough cash,
which is required to pay liabilities relating to that equipment or product
– Simple Breakeven – simple calculation of operational profit
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Budgeting Slide 1 of 2
– Production Budgets
– Expense Budgets
– Marketing Budgets
– Sales Budgets
– Purchase Budgets
– CAPEX – Capital Expenditure Budgets
– Human Resource Budget
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Budgeting Slide 2 of 2
• The budgets purely based on any past period results may lead to lower
performance
• Keep budgets flexible for changes – however make changes only when
justified
• Learn from the past budgets – if any past budget was a failure or a success
story – try to learn its reasons
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Process
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Systems, SOPs, Controls and Policies
• Systems
– A pre-defined way of doing some activity is called system. In system, all
possible activities are worked and a procedure is prepared as how the
activities will be performed by anyone in event of happening of any
transaction.
– Step wise explanation as how activities will be performed
– We also mention certain documents, forms and register or record keeping
tools to maintain the data processed in that particular transaction or activity.
• System Example:
– For Inventory Receipt:
• On receipt of materials from suppliers, the Gate keeper will check the
supporting Documents
• If documents are correct, the Gate Keeper will enter the Document
number in the register and also make entry in the computer system and
prepares “Gate Inward Pass”
• After the making entry in the relevant record, the material will be placed
for inspection
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Systems, SOPs, Controls and Policies
• Controls
– We normally place controls in order to avoid any risk being present in the
transaction /activity either by nature of the transaction or otherwise
– Controls means that matters being handled according to one’s desire without
his/her presence there.
– Controls can be established through:
• Authorization – Documents – Reconciliations – Physical Monitoring – Budgets
– Access Control
– Example:
• In case of Inventory receipt procedure, we need to have control that no
un-authorized material enter in the premises – so a control has been
placed with the Gate Keeper that he will ensure that material is
accompanied with the Authorized Document.
• Policies
– A deliberate plan of action to guide decisions in different situations
– Example:
• In case of Inventory Receipt, we need a policy statement that in the event of
excess receipt of material what action gate keeper should take
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Knowledge Management
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Role of IT
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Role of Accounts Department
• The role of Accounts Department is one of the most important and critical
as almost every transaction has the financial impact and passed through
the Accounts Department
• The Accounts Department plays the role of COCKPIT for the Business –
The Cockpit provides the pilots all the control and information, similarly
the Accounts Department is in position to provide all the controls and
information to the Top Management.
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Role of Accounts Department
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Risk Management
• The Organization should make sure that all possible risks and threats have
been properly addressed and someone must be responsible to take care of
these risks.
• Examples:
– Risk from Competition – continuous improvement is answer
– Theft of critical data and information – IT should take special care
– Sudden change in foreign currency rates – limited and controlled exposure
– Micro Soft – new companies, new products
– Boeing – Airbus
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Performance Measurement
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Most Important Factors
• Human Resource
• Attitude, Culture and Discipline of the Organization
• Accounts Department
• Strategic Planning and Directions
• Fund Management
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Thank You
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