ACCA P5 Advance Performance Management
Performance pyramid consist of four levels and consider four key areas. Four levels are: 1. Corporate Vision, 2. Market and Financial, 3.Customer satisfaction, Flexibility and productivity and 4. Quality, Delivery, Cycle time and Waste.
Four key areas are 1. Organisational structure, 2. External
effectiveness and internal efficiency, 3. Flow of strategy (top-bottom) and
information (bottom-top), 4. Customer and shareholder.
The position of the component "FLEXIBILITY" in
performance pyramid is so unique.
Flexibility lies in middle of six components.
But how does it actually link them.
Say reduce waste will increase productivity and increase profit per unit or better quality enhance customer satisfaction and increase market share volume, combined together (Profit per unit* volume) links to corporate vision profit maximization.
Reduce waste by setting target, Assess productivity with KPI, improve financial objective defining CSF where information flow from ground level and policies flow from top level. Information assessed mixture of financial and non-financial indicators which are both quantitative and qualitative in nature. In an organisation waste exists in myriad forms. Taking HR as an example organisation can set target to reduce excess idle time (limited idle time where employees are multi skilled is beneficial to company to deploy emergency service requirement) which is assessed by KPI visiting different labour variances (because one improved variance may sometime reduce other variance) and this ultimately addresses CSF economically and efficient deployment of human resource.
Flexibility lies in middle of six components.
But how does it actually link them.
Say reduce waste will increase productivity and increase profit per unit or better quality enhance customer satisfaction and increase market share volume, combined together (Profit per unit* volume) links to corporate vision profit maximization.
Reduce waste by setting target, Assess productivity with KPI, improve financial objective defining CSF where information flow from ground level and policies flow from top level. Information assessed mixture of financial and non-financial indicators which are both quantitative and qualitative in nature. In an organisation waste exists in myriad forms. Taking HR as an example organisation can set target to reduce excess idle time (limited idle time where employees are multi skilled is beneficial to company to deploy emergency service requirement) which is assessed by KPI visiting different labour variances (because one improved variance may sometime reduce other variance) and this ultimately addresses CSF economically and efficient deployment of human resource.
As seen above now we can easily deal with “FLEXIBILITY”. Say
operating 24/4 (+) home delivery will address customer need and increases
satisfaction of customer ultimately increasing market share or flexed cycle
times can be improved by employing multiple skilled workforce, job rotation
which enhance performance and productivity leading to financial benefit to
company. Interestingly ACCAlearningcommunity is a good example in understanding
flexibility. It offers a platform where we can study and share our knowledge
24/7 from anywhere in the world. It increase productivity of participants and increase
students’ satisfaction by offering support throughout carrier and personal
development which in turns helps in expansion of its members and students.
ACCA Article: The pyramids and pitfalls of performance measurement
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