Hannah Claybrooke is undertaking a part-time MSc degree at a local university and one lecture on the course has prompted her to consider the company’s performance measurement system, or rather their lack of any formal system. Though day-to-day financial matters are handled by the computer package, management control is not conducted in any formalised way. Select an appropriate performance measurement system for the company and justify your choice(15 marks)Hannah Claybrooke is undertaking a part-time MSc degree at a local university and she has been prompted to consider the company’s performance system.
The financial matters of GC Furniture are handled by the computer package; however management control is not conducted in any formalized way. Since all the financial and numerical data, relating to the company’s performance is taken care of by a computer program; the only area where emphasis needs to be laid is management control. As mentioned above, the company namely GC Furniture maintains no formal management system so it should adopt a system that would suit its requirements and help flourish the company. An ideal system for a small organization like GC Furniture could be a one, which embodies retrieval of qualitative data with reasonable accuracy.
This system would take into account the data of every individual employee who contributes substantially to the progress of the company and make comparisons with a set standard. In my view, the system should comprise of three inter-related components, which would assist the company in possessing considerable control of the management. Firstly, it needs to develop a computerized HUMAN RESOURCE MANAGEMENT SYSTEM which maybe developed by any notable software house. The HR system would contain qualitative and quantitative data of every employee for instance name, designation, address, salary and job assignments.
Moreover, in order to keep a check on the regularity of workers, every individual working in the company would be given a magnetic card. This card would have to be checked in the system everyday while entering and leaving the office. Doing so, the company would be able to create a correlation between the working hours and the quality of work generated. However, the whole information shall be password protected whereby allowing access to very few individuals of the senior management. The second component would require the company as a whole to embrace the latest means of calculating accreditation of the personnel namely PERIODIC PERFORMANCE APPRAISALS.
These appraisals maybe conducted on a quarterly basis. Applications in the form of questionnaire would be distributed at all management levels of the company. This way they would be able to assess their performance as perceived by others. Appraisals can become one of the major indicators of evaluating the productivity of every individual working in the organization and therefore every individual would be able to enhance his performance significantly. The last component of an effective management control system is MANAGEMENT MEETINGS.
The two constituents mentioned above can be reviewed at monthly management meetings. Hereby, the financial data and statistics could easily be compared with the overall functioning of every person in general. This way it would help the management in calculating the areas of deficiency or improvement. Furthermore, the employees may be given rewards due to high levels of performance and output that would be a temporary expense for the company.
However, it would definitely boost the morale of the employees and they would work even harder which would generate profits for GC Furniture in the long run.