Question

explain how and organization goes about assisting past performance to do their best to develop future metrics and measurements so as to support future performance strategies

Answer 1

Each organization / firm should have long term strategic view in order to survive in competitve environment and maintain profitable margins continuously. In order to do so a firm should set performance benchmark for its employees which is supported by important key performance indicators (KPI). KPI refers to metrics set to measure how successfully a firm is able to achieve its short / long term goals (which is in line with its long term strategy). For example KPI of a manufacturing company can be to reduce per unit cost, increase in volume sales, increase in productivity of employees etc.

For a firm to set its KPI, management should conduct an unbias review of past performance of firm. Management should do an honest assessment of where exactly the slippages were, which has held back firm in achieving its set milestones. Based on the impartial assessment of areas of improvement, management should effectively devise KPIs for the entire firm. They should give all the employees required confidence that the KPIs set are indeed effective and necessary to keep firm on track.

Once the KPIs of firm are successfully set they are evaluated quantitatively on yearly basis against the performance achieved by firm in terms of increased profitability, employee satisfaction index, cost per output, customer satisfaction etc. Again based on the evaluation done, management needs to take decision if earlier set KPIs has to be modified or remain same.