It is known that, for a company to achieve success and good performance, it must follow an efficient strategy. The question is how to devise such a strategy? It is at this point that corporate performance management methods present themselves as a solution.
By putting these into practice, managers apply a series of indicators that allow them to observe the efficiency of the company’s procedures and verify how to improve them, thus increasing its productivity, which raises the business’s profitability.
Would you like to increase the efficiency of your company’s processes and make it more productive? Corporate performance management is the way. Keep reading and find out how to apply it!
The first step to be taken by the manager and their employees before implementing performance management is to confirm what the company’s goals are in the short, medium and long term. This is because the purpose of corporate performance management is precisely to provide the tools needed to achieve these goals more easily.
Therefore, any measure to be taken must be aligned with these goals and contribute to achieve them quickly and efficiently.
This analysis should be done frequently, especially when new projects are about to be put into practice. If such care is not taken, there is a possibility that activities that lead to outcomes that are different from those to which the company is targeting are carried out, which would be a waste of time and resources.
Once the manager and their employees are properly informed about the company’s goals, they must prepare and put into practice a plan of studies on their production processes and procedures, in order to check if they actually meet the company’s intended outcomes.
The task of conducting this study requires attention, so it is recommended that the management team begins its implementation only by the most important sectors of the company. As data are cataloged, new sectors can be included.
The selected production processes and procedures must be mapped and thoroughly checked until their operation is fully known and easily visualized by the manager.
The preparation of an accurate flow chart on the execution of the processes, conversations with the employees responsible for them, and a close observation of their practice are fundamental at this moment.
Definition of Indicators
After both the management team and its employees acquire full knowledge of the procedures selected for the study and its execution, it is time to set a series of indicators to evaluate their performance and the importance to the company.
This task is vital for the corporate performance management strategy; therefore, the preparation of indicators must follow certain requirements. Among them, we can mention:
- importance: the indicator selected should have a relevant impact on the analyzed procedure and its final result;
- understanding: the indicator needs to be easily visualized and understood by the employees who must deal with it, or it will be left out in the company’s daily routine;
- evaluation: the indicator must be a variable that can be measured in order to be used in the decision-making process. It should preferably have the prerogative to be evaluated numerically, so that comparisons between indicators can be made more easily.
By applying measures for the automation of processes, all the data related to their execution will be registered, and the manager and his/her employees will be able to have access to them in real time, which allows them to follow their performance more efficiently.
The use of corporate software makes this follow-up possible. Another advantage it offers is increased data security. This is because once the data are generated and collected automatically; the risk arising from human error is eliminated.
Automation also allows for the number of employees who are in charge of data analysis and collection to be reduced, so that they can be allocated in other areas of the company, which at the same time increases productivity and reduces personnel costs.
Once the management team gets a clear view of the processes that have been studied, it can see a series of flaws that must be eliminated and points that can become more efficient.
It is common to find, for example, problems with delays, waste of materials and inputs, production bottlenecks, rework, errors and inconsistencies in collecting and transmitting information between members of different teams.
It is up to the team of managers and their employees to develop, based on the data and information collected in the previous study, measures to eliminate these failures, thus improving the efficiency of processes and increasing their productivity.
This procedure of study and follow-up must be done constantly, in an endless cycle, so that the efficiency and productivity of the production processes continue and increase over time.
With corporate performance management, both the manager and their employees are able to evaluate the performance of several company sectors that they manage and, thus, take measures to eliminate failures and increase their productivity.
Taking these benefits into consideration, it is possible to realize its importance and influence on the performance of companies and institutions. That is, this procedure should not be underestimated or overlooked.
The financial sector is one of the most relevant sectors for a company, as it has a direct impact on its results and longevity in the market is. Keeping all the capital inflows and outflows well-documented is critical to ensuring its financial health. But it is important to take into account that some expenses are difficult to evaluate, and they may represent a much higher percentage than it appears.
To solve this problem, several costing methods were developed to assist the management team and its employees in this task. Among them, we can mention the ABC costing method, which focuses on the various processes and activities of the company, with the purpose of mapping all of its costs.
Now that you understand how to apply corporate performance management, how about learning more about costing methods and finding out how they can benefit your company? Read our other article and learn about its operation and main modalities!