Performance Measures and Responsibility

Kevin Baker
CTU Online

Performance measures are steps a company can take to make sure their objectives are
being met. These measures are important because it allows people in a position of authority to
measure the efficiency and effectiveness of process and performance. Performance measures
include assets used, business activities, ratios and end results. Performance measurement
accomplishments can also produce information on project results. Performance measurement can
greatly improve a business’s accounting methods that conventional methods did not allow
(Kellen, 2003).
Leaders within the company must be assigned responsibility of performance measures for
a couple of reasons. First there has to be a level of responsibility and accountability.
Supervisors and managers have to be held responsible for the employees under them. Second is
due to the area of expertise. There are many divisions in a company that operate in different
ways. It would not make sense to have a human resources manager responsible for performance
measures in logistics. They would be more suited for performance measures in employee
benefits or retention.
The manufacturing department can have many performance measures in place. The
amount of defective products is one of the measures needed. By not measuring the metrics of
this, resources can be wasted and customers will be unhappy. The effectiveness of equipment,
scheduled deliveries and space utilization are also important measures in manufacturing.
Productivity of personnel is probably the most important because the number of hours needed to
create a product directly relates to profit (Business Link, n.d.). In the purchasing department
some good performance measures would be orders fulfilled on a monthly basis, quality of
supplies needed to perform jobs, new suppliers that could reduce costs and a supply inventory
reduction plan (HCS Consulting, 2007).
Sometimes a business department does not perform in an efficient manner requiring
management to make changes to performance measures. As discussed in paragraph one,
performance measures are steps taken to improve a process or meet desired objectives. In a case
where a department’s metrics are unfavorable, management would need to revisit the
performance measures and make changes to the process. The severity of the deficiency, would
dictate the measures that would have to be taken. Sometimes a small change can make a huge
impact in the process.

Business Link. (n.d.). Measure Performance and Set Targets. Retrieved October 10, 2010 using
Google search engine from http://www.businesslink.gov.uk/bdotg/ action/detail?
type=RESOURCES&itemId=1079681498

HCS Consulting. (2007). Performance Measurements in Purchasing and Inventory

Management. Retrieved October 10, 2010 using Yahoo search engine from
http://www.hshieldsconsulting.com/newsletter-07-03.html

Kellen, V. (2003). Business Performance Measurement. Retrieved October 10, 2010 using
Yahoo search engine from http://www.kellen.net/bpm.htm