Performance Management Report - Doc

Added on - 21 Jul 2020

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PERFORMANCEMANAGEMENT
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................1Critical evaluation of risk and uncertainity on decision making.................................................1Approaches that affect decision making.....................................................................................2CONCLUSION................................................................................................................................3REFERENCES................................................................................................................................4
INTRODUCTIONPerformance management includes those activities that helps in ensuring goals oforganisation are achieved in an efficient and effective manner. This intends to focus upon theoverall performance of business entity, individual departments and employees along with theprocess of making a product and providing of services. Performance of organisation mainlydepends upon its decision making process which is largely affected due to number of risksassociated with business. In the present report aspects of risk that have significant impact ondecision making of has been explained with supporting examples. Further different approacheshas been evaluated in the context of how they can impact on decision making.Critical evaluation of risk and uncertainity on decision makingUncertainty:It is the situation where neither mode of occurrence of outcome of its probability isnot known. For instance, when impact of a decision in future to the operations of company is notknown and neither the probability of its outcomes are known it is referred as uncertain situation.Risk:Risk is the situation when actual value of variable is not known but its probabilitydistribution is known (Drury, 2015). It can be referred as uncertainty of financial loss or non-financial loss due to occurrence or co-occurrence of unfortunate future event.Risk and uncertainty factors regarding future have significant impact on decision makingof managers regarding business functions and operations. Risk arises when there is a lack ofperfect information or whenever asymmetry exists. According toAguinis, (2009), decisionmaker often have incomplete information, however, he does have a good idea about all thealternatives available and the probability of outcome from each alternative.Decision maker need to determine probability associated while making decision understake of risk on the basis of his experience and available information. When risk and uncertaintyare considered while making decision, then somehow risks are incorporated into the decisionmaking process of company. Decision maker can make list of all possible outcomes under theconditions of risk and uncertainty. However, as perFranco-Santos & Doherty, (2017),uncertainty occurs when all the possible outcomes are not known and decision maker cannotassign probabilities to the various outcomes or is unable to list all the possible outcomes.1
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