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Performance

2006-October-15

Pyramid of RatiosQuantitative  approaches to organizational performance measurement means traditionally accounting measures.
Recent  publicity  surrounding the marketing of economic value  added  as an overall measure of company performance,  means for us optimizing efort   directed  to qualitative approach.
Usual those are well know as financial evaluations or financial aspects of performance. Attention is moving from profit to added value.  Objectives in financial  form are a part of strategy implementation there are more “drivers” to performance.
The three main functions involved are:
1 Financial measures of performance as tools of financial management. Here the focus is on the functional specialism of finance and  financial management. This is concerned with  the e cient  provision  and  use  of financial resources to support the wider aims of the organization, and to manage the effective and efficient operation of the finance function.
2 Financial  performance  as  a  major  objective  of a  business  organization. Here an overarching financial performance measure, such as profit, return on investment, is used to signify the achievement of an important (perhaps the most important) organizational objective.
3 Financial  measures  of performance  as  mechanisms  for  motivation  and  control within the organization. Here the financial information provides a ‘window’ into the organization by which specific operations are managed through the codification of their inputs and outputs in financial terms.
We suggest to use only dimensions less figures!. Read more…

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