Organizational Performance Measurement Assessment 2022

Running head: ORGANIZATIONAL PERFORMANCE MEASUREMENT
ORGANIZATIONAL PERFORMANCE MEASUREMENT
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Author Note

ORGANIZATIONAL PERFORMANCE MEASUREMENT1
ORGANIZATIONAL PERFORMANCE MEASUREMENT
Organizational performance measurement is employed as a prime parameter for the
superior governance and maintainance of organizations. The function of the organizational
performance measurement is to ensure the successful execution of the strategies and
resources that are utilized to attain the objectives of the organization (Micheli and Mari,
2014). It ranges from such diverse areas like human resource management, change
management and marketing to global business schemes and information structures.
Organizational performance is often measured on the basis of productivity of the firm, its
effectiveness and ranking and such others. The monitoring of the organizational performance
is of utmost importance in any corporation since it guarentees enhanced asset management,
improved ability to value customer satisfaction and has a direct impact on the reputation of
the organization.
The asessment of the performance of an organization is done on the basis of certain
key performance indicators. The key performance indicators (KPI) demonstrates the
coherence of an organization in executing its targets (Paul and Elder 2019). Organizations
employ key performance indicators on multiple levels to configure the overall
accomplishments of the various facets of the organization and therefore, in order to be
effective, the key performance indicators needs to be well quantifiable and defined and must
be communicated to the various departments properly. The potent method to accomplish this
is to segregate certain specific indicators that are directly applicable to the financial metrics,
customer metrics, people metrics and process metrics of the concerned line of business.
The financial metrics of an organization is one of the optimal facets in the
determination of the proper functioning of the firm (Kumar et al. 2013). To attain a proper
understanding of this facet, it must be further categorized. Firtsly, the profitability of the firm

ORGANIZATIONAL PERFORMANCE MEASUREMENT2
that states whether the firm is generating the required yield and this can be obtained by
analyzing the net and gross profit margins. Secondly, a comparison must be made among the
projected revenue and the actual gained revenue of the firm for charting out the
discrepancies between these aspects that in turn provides appropriate data on the
performance of the concerned departments. Thirdly, by keeping an account of the daily
outstanding sales and the cost of the sold products, the firm can recognize the appearance of
the product markup as well as determine the actual profit margins. Lastly, a critical analysis
of the expenses and the set budget of the firm helps in understanding the efficiency of the
budget, also, illustrates the requirements for the future budget. The effective tracking of the
financial metrics of a firm is important as it helps the organization to acknowledge its deficits
and thereby improve accordingly.
The customer metrics is concerned with the satisfaction of the customers as well as
the stakeholders, for which varied indicators such as ratings provided by customers, the
percentage of consumers repeating their purchases and so on are implemented (Gengeswari,
Padmashantini and Sharmeela-Banu 2013). Primarily, a good marketing strategy and a
responsive customer care service expands the customer base of the organization. The
customer acquisition cost is also an important metric for evaluating the cost effectiveness of
the marketing campaigns of the organization. In order to maximize the retention of the
customers, specific plans for enhancing the Corporate Social Responsibility can also be
prepared. This particular performance indicator is an essential external facet for determining
the organization’s reception in the market (Eccles, Ioannou and Serafeim 2014).
The process metrics incorporates methods by which the efficiency of the operation of
the various sectors of the organization are calculated. this can be done by keeoing a record of
the hourly production rate of the firm and the total yield within a stipulated time frame. By
reducing the rate of defective products, organizations can save on the poduction costs and