Output control
■ Quantitative control measures– the units produced or sold, the
amount of services provided, the sales turnover obtained
and the profits achieved. Key performance measures will
vary between organizations. You need to determine through
analysis which are the crucial indicators of success or failure.
■ Qualitative control measures– the level of service provided by
an organization (eg a public corporation) or by a non-
productive department within an organization (eg HR). It is
more difficult to select valid performance measures in these
areas, but the attempt should be made.
CONTROL SYSTEMS
What you need from a control system
Your basic requirement is reports that clearly identify areas of
good and bad performance so that appropriate action can be
taken.
At higher levels ‘exception reporting’ should be adopted so
that significant deviations, on which action should be taken, can
be highlighted. Overall summaries of performance against plan
and of trends will also be necessary at this level, but these may
disguise significant underlying deviations which would be
pointed out in an exception report.
The reports themselves should:
■ Contain measurements which are accurate, valid and reli-
able. Permit a direct and easy comparison between planned
and actual performance.
■ Analyse trends, comparing one period’s performance with
that of the previous period or of the same period the
previous year and, where appropriate, summarizing the year
to date position.
■ Be given to the person who is responsible for the activity
concerned.
■ Arrive promptly, in time to allow the necessary action to be
taken.
■ Provide succinct explanations of any deviations from plan.
How to Control 43