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A company can use its information system to manage goals and performance and must determine how to manage staff performance.
The objectives of vertical management
Each service has its margin objectives, sometimes in conflict with each other.
- Sales must sell a quantity at a certain price
- Purchasing must buy a certain amount at a reasonable cost
- Production produces at a ‘fixed’ cost
- Maintenance must look after the facility within budget
The goal is to make a profit, pay invoices and invest in development. The company may also have more noble social goals.
All areas of activity require goals and performance measurement. The overriding goal is to improve the system.
The information system to manage objectives.
- It can calculate performance and compare with goals
- It can remove this measurement responsibility from middle managers
- Whoever wishes to can compare actual performance against objectives.
- Management understands its objectives, employees do their job.
The main thing is the evaluation, the determination of actions based on measures. Management sets the objectives and the measured performance results are presented in relation to these objectives:
Managing performance results
- What is management’s attitude towards staff management issues? Is it paternalistic or directive?
- How is the continuous improvement cycle going?
- How is underperformance managed? Is it through understanding and seeking solutions or by demoralising people and using an authoritarian manner.
- Were objectives set SMART?
- Why have the objectives not been achieved?
- Are the reasons for underperformance valid, and are we measuring ourselves against a realistic and achievable goal?
- What are the effects of being under-objective for the company? How can the situation be rectified?
- Can targets be reduced if the initial target is unachievable?
- Determine the financial consequences for the company:
- Must do better next time!
The consequences of underperformance in sales may require lower costs.
Over-performance may allow the company to make financial provisions for potential future underperformance.
Comparing the objectives stored in the information system with actual performance is part of measuring the relevance of a strategy and continuous improvement.
Staff will fear the negative consequences of underperformance if targets are not clearly stated and recorded.