Essay - Performance Indicators and Organizational Management Performance Measurement System Is an...

Performance Indicators and Organizational Management performance measurement system is an important tool in managing an organization. It allows an ***** to define what is important to it and helps an organization ensure that its objectives are met. The more complex an organization becomes, the more important an effective performance measurement ***** becomes.

The first step in developing a performance ***** system is determiing what needs ***** be measured. Th***** involves identifying ***** key performance indicators (KPI's). This is done by defining what is most critical to the success of the business and *****n finding a way to measure these critical success factors.

This process is important because it ***** the ***** to identify exactly ***** ***** contribute most ***** ***** success. This helps ensure the organization has a cle*****r vision of *****s strategy and is able to monitor the *****ness of that strategy.

McNamara says that goals of the ***** need to be aligned with the goals of the employees. Employees need ***** share the aims ***** the organization ***** be motivated to work towards *****m. In this way, the company works efficiently towards its goals. There is a need then, to ensure ***** employees are aware of the organization's goals, are involved with them and ***** inspired ***** work towards them. Kaplan ***** Norton (73) describe how a measurement system affects employees saying, "what you measure ***** what ***** get." Employees look at what is being measured as a sign of what is important to the company and so focus on what is being *****. The performance measurement system ***** a *****ol th*****t gives directi***** to all employees and ensures they are focused on the goals ***** ***** company.

The performance measurement tool known as the balanced scorecard includes these ***** and extends on ***** to give a fuller picture of the organization. Kaplan and Norton describe four perspectives that ***** indicators should cover: financial; customer; internal business; and innovation and learning perspectives. The ***** scorecard is described ***** being "like the dials in an airpl*****e cockpit; it gives managers complex information at a glance" (Kaplan & Norton 73).

There are two reasons that a performance management ***** similar to a balanced scorecard ***** especially important for a more complex organization ***** many units.

***** first reason is that it maintains the focus. In an ***** with m*****y units, it can be easy for the focus to be lost and for organizational objectives ***** be overlooked in favour ***** departmental objectives. The balanced ***** ***** the focus ***** employees and keeps each department ***** on the overall goals of the organization.

The second ***** is ***** it assists ***** in remaining *****ed on achieving the overall goals ***** the *****. With many departments, management ***** lose sight of overall objectives. Having to assess and define ***** measurement system allows the company to clearly ***** what is ***** ***** to its success. An effective management system then ***** the ***** to m*****itor these factors and have a clear picture of