This memo relates to the application of routine metric measurements. The goal of assessing organizational performance related to regular company operations is to enhance decision-making by discovering hidden trends and the underlying causes of new problems (Rasool et al., 2022). Managers can provide employees with clear, concrete feedback about their performance by monitoring progress in a clear, measurable manner, such as financial costs and budgets, adherence to production deadlines, and customer satisfaction measures. This also enables upper management to assess whether operations successfully advance strategic goals across departments (Stocker et al., 2022). The expansion endeavour will benefit from these metrics. Increased employee retention and loyalty, improved communication between the various levels of management, enhanced productivity, and increased efficiency are some benefits of a successful performance management system.
Eliminating activities that are not directly related to strategic objectives, removing or reducing mismatched goals, and other benefits to the success of the person and the firm are some of the insights received from performance evaluation and assessment (Rasool et al., 2022). Keep activities in all areas concentrated on a common target by blatantly disregarding necessary performance measures that align with higher-level goals.
Industrial Inc. can use metrics to support operation measurements by looking at progress from multiple company vantage points. Using the balanced scorecard is one way to gauge effectiveness in each category. Performance is assessed using this method in four crucial areas: finance, customer relations, internal business processes, and learning and growth. These evaluations consider internal and external pressures and cost- and non-cost-related forces (Stocker et al., 2022). By quantifying the efficiency and effectiveness of previous acts, performance metrics will show their value if they help decision-makers make well-informed choices.
By being clear about the goals the firm wants to achieve and keeping an eye out for critical outcomes connected to those goals, managers may use the offered metrics in their day-to-day work to support operations and people (Rasool et al., 2022). The preliminary results must be precise, time-bound, aggressive, reliable, measurable, and verifiable. The objectives must be important, action-oriented, inspiring, and concrete.
KEY ELEMENTS
The following are essential components of a meaningful metric that effectively measures the intended performance (Rasool et al., 2022):
- It answers the root question- what are we trying to accomplish or change.
- It points back to the strategic objective.
- It is measurable-specific, time-bound, and requires data.
- It is simple to understand.
- It is owned by someone who can contribute to success/failure and is responsible for progress.
- It is clear how the metric information or data will be used.
- The data or statistics are repeatable- can be produced again.
Metrics should inform management of the advancement or reversal of progress made in the operations they track toward a strategic goal.
Metrics should be appropriately used to support the operational performance of the organization and should include meaningful data that is persistent and predictive (Rasool et al., 2022). A business metric is a measurement used to assess an organization’s performance; metrics relate the data they collect to the central issue in a way that tells a story about an activity.
Current metrics used by Industrial Inc. include sales, ROI, and manufacturing time. These metrics offer the company’s core operations’ perception from a financial and non-financial perspective. Number- and percentage-based information is being gathered, which will offer proof of whether Industy Inc. is moving closer to its goals (Rasool et al., 2022). Sales measurement provides precise information on the entire amount of money that Industry Inc. makes from selling its products. Measurement of return on investment (ROI), expressed as a percentage, reveals to Industrial Inc. how much money was made for every dollar invested in the business. Industrial Inc. can contrast its investments with other businesses operating in the same sector. Monitoring the manufacturing cycle time reveals how long it takes Industry Inc. to produce a finished good from raw materials. If this cycle is kept short, analysis of the data can result in improvements and strengthen Industrial Inc.’s competitive edge.
Industrial Inc. should use the measures’ findings to inform reporting across various departments, including financial, customer service/sales, and production, to drive organizational growth (Garcia-Perez et al., 2019). When the data is tracked, the conclusions should be examined and used to support changes in priorities.
APPROPRIATE METRICS
I suggest Industrial Inc. use the following metrics for each objective:
- Industrial Inc. should use its sales metrics to assess existing sales by employees to determine each employee’s effectiveness in procuring and fulfilling contract requirements to increase sales by 5% by securing new contracts with one or more automotive manufacturers. Also, Industrial Inc. should consider a market penetration metric to estimate its existing share in the possible sales of the product it manufactures to find prospective new clients (Garcia-Perez et al., 2019). This will make identifying the potential markets that Industrial Inc. might want to explore easier. The production, customer service/sales team, and financial department should all be aware of this metric.
- Using the current manufacturing cycle time metric to track real cycle time and introducing staff performance measures tailored to the manufacturing process to gauge efficiency, speed, and the number of errors would help achieve the target of shortening the manufacturing cycle by 10% (Garcia-Perez et al., 2019). All departments should be aware of these metrics and data because they directly impact them. The data from employee performance metrics can be used by human resources to find new hires with the necessary abilities and assist in putting employees in the right roles.
- Focus should once more be placed on precise tracking of staff measures and incident counts to implement strategic measurements and procedures to review and enhance plant safety and cut the number of injuries by 50%. Employee safety training, adherence to regulations for the safe use of machinery, and tenure in employment should all be considered when developing employee-specific measures (Garcia-Perez et al., 2019). Whether or not there are injuries, keeping track of incidents will assist in identifying problem areas for training or other safety measures. Production, Human Resources, and the Financial Department should all have access to this statistic and data. Once more, the details about an employee’s performance can help HR accomplish hiring, promotion, and reassignment goals.
These proposed metrics help the organization achieve its objective by offering a benchmark for overall performance and actual data that can be utilized to put practices and procedures in place to enhance overall performance. Metrics should be consistent across all departments to prevent work from being done in silos (Stocker et al., 2022). Cross-departmental metrics, which use data to determine progress milestones and the finished product’s overall quality, will help inform organizational performance overall by proving success across departments.
References
Stocker, J., Herda, N., & Jürjens, J. (2022). Life cycle and metrics measure business processes’ resilience by considering resources. Business Process Management Journal, (ahead-of-print). https://doi.org/10.1108/BPMJ-10-2021-0674
Garcia-Perez, A., Gheriss, F., & Bedford, D. (2019). Metrics for Knowledge in the Business Process. In Designing and Tracking Knowledge Management Metrics (pp. 117–128). Emerald Publishing Limited. https://doi.org/10.1108/978-1-78973-723-320191019
Rasool, F., Greco, M., & Grimaldi, M. (2022). Digital supply chain performance metrics: a literature review. Measuring Business Excellence, 26(1), 23-38. https://doi.org/10.1108/MBE-11-2020-0147
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