Performance measurement refers to the process of collecting, analyzing and reporting of
information that is related to the execution of task in the company. It indicates whether the
results are being achieved or not. It is a vital tool for managers as it helps them decide how to
allocate resources to various processes in the business (Michael, 2011). On the other, hand
performance management is the process of making sure that the set of various activities and
output are in line with the organization’s goals in a manner that is effective and efficient. Both
processes are vital in the performance of the organization. However, their implementation is not
easy and poses some difficulties as discussed in this context.
To start, the system for performance management must meet the specific needs of the
organization. It must be unique and not a duplicate of another company or an organization that
deals with similar business (Marcus, 2015). Wrong design of the system may arise as a result of
management failing to consult its stakeholders and users of the system. This may result to unfair
system that is not equitable. Performance management should be a continual process and not an
activity that is conducted once or twice per year. It should also entail mechanisms that rewards
performance and handles poor performers. Use of poor metrics is another hindrance in
implementing the system. This is because the metrics used should promote what a business
wants ends up being implemented in a balanced scorecard. The selection of the right targets is
key. Whenever the targets are so easy to reach there will be no improvement in terms of
performance. If they get out of reach the staff in the organization would not try much to getting
them. Transparency issues also bring difficulty of implementation of the system. Most
employees for example believes that their target encourage meaningful achievement in the
organization. However, their individual efforts and the objectives of the company becomes
uncertain as the targets and metrics moves down the organization. As different levels of
management tries to stand out buffers are inserted into the targets. This results to different
metrics that do not have logical links at different levels. Lack of consequences is also another
challenge. Majority of employees never face “win or leave” pressure. This encourages weak
accountability that encourages individuals to just show up (Buckingham&Marcus, 2015).
Performance measurement is most of the time erroneous other than a threatening task.
This results to little business insight of the performance and may lead to decisions that may be of
less benefit businesswise. There are various traps that hinder correct performance measures.
Measuring against yourself is a major trap. The business may be doing better than the plan but it
is not beating its competitors. Benchmarks are therefore vital as they help determine the
competitive priorities. Focusing on the past is another major drawback. Assessing performance
measure is often based on comparing the performance in the previous years. The measure should
tell you whether the decision to be made has an impact on the coming months or not. Thus
making the point of beating previous year’s performance meaningless. Management in most
cases happens to what can be measured. Unfortunately, the systems of assessing do not evolve as
fast as the business does. Comparison therefore falls under sales done in previous week,
previous year or may be previous month. This often results to a business sticking to this numbers
for long. A business may also fall into the trap of putting its faith in its numbers. Generally the
metrics of performance assessment come in numbers. Managers that are number driven may end
up producing reams of data that is of low quality (Arzu, 2010). If the business wants to compare
itself with its competitors it may tend to gravitate towards the measures that other companies are
using. This often results to some measure getting lost.
Employees of Retro retail work from home and connect to the system of work via a
national internet. This poses great challenges in assessing and managing this employees. Keeping
of individual productivity record is hard since there is no monitoring involved. Productivity
analysis is vital as it helps to identify problems before they are considered to be a crisis in the
organization. The measure of the output rate, time spent on the internet doing marketing,
response to customer orders and complains from clients becomes complex due to lack of on site
management. The implementations of performance management and measurements will call for
additional inputs by the business such as bonuses or pay rises on individual employees. Putting
into consideration the small profit margin of the company it becomes difficult to achieve this.
Direct feedback of managers to the employees becomes limited as it have to be channeled
differently to each individual.
Implementation becomes difficult with its partner LAX logistics, due to use of different
reporting processes and systems. Considering the logistic company is on its own, it becomes
difficult to agree on a single unit of measurement. Its measurement maybe biased to conceal the
benefits and it’s inflate costs. The partner do not receive the same scrutiny management level as
other units in Retro retail. This is because it is inside the business and not totally outside. It is
subjected to a different market force and customer relationship. This then makes it difficult to
come up its correct measure. LAX logistics may also receive funding from its other partners.
This partners may be cost sensitive and may fail to disclose detailed cost data. This complicates
the process of measuring the benefits. It becomes difficult also for Retro Retail to know the
competitive position of its partner in terms of order delivery to clients and also the feedback it
obtains from its clients.
Goote’s report helps him get a better understanding of the whereabouts of his team
members and he is able to distribute workloads evenly. This will depend with the individual
employee skills and ability. This is very vital in determining the overall accomplishment of sales
done in that day. Each employee is able to see how much they have contributed to the overall
achievement in the business in that day. They are therefore appreciated with their daily
contribution. This serves also as a motivating factor to the employees. Aside from this inspiration
they are able to come up with ideas that are aimed at achieving better performance of the
business. They are also able to share their experiences in the problem solving hence leading to
the overall improvement in problem solving skills. This report also serves as a way of seeing
whether the employees are being involved in their respective jobs in their day to day activities.
This opens an avenue for mentoring, giving feedback and also coaching of the employees. From
the insights of the report, Goote may be able to identify those employees that are ready to be
promoted or those that require salary increase. Through this reports the employee will also be
able to identify those activities that contributes to the goals of the business and thus dropping the
ones that does not (Bititci&Umit, 2010). An employee will also have a picture of where he
spends his time and how. This is important in planning the structure of the day. It is also easy for
Goote to identify the hours that employees are more active and thus pushing them to tackle major
task and leaving the minor tasks to be covered in the less active hours. The insights of the report
also helps in identifying those employees that are mostly absent without valid reasons. This is
particularly important in deciding which employee is suitably fit for the company. Continued
absence of some employees means that some tasks would not be fulfilled. Complete attendance
improves the productivity which in return raises the profit margin of the business.
Concentration on achieved goals should be key in describing the achievement of each
day. The daily status should show the how each employee contributes to the bigger picture of the
business. Describing the result of each work done by the employee is more important than the
activity itself. Taking note of the problems that employees encounter each day and how they
were able to solve it is equally important. This helps the manager to channel different problems
to different employees who are able to solve them with ease. Employees should also be in the
now of how they will reap the benefits for presenting this daily reports. Key emphasis should be
made on importance of own performance and the importance of identifying those employees that
are ready to be promoted. Proper description of the idea of improving business performance
should be made and not the idea of monitoring. Official communication should be issued on
implementation and clear guidelines laid what to write in the report. Addressing of the issues that
may arise should also be given a priority. The management of the business should ensure that
there is a consistency in implementing policies and rules.
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