Performance Measurement Systems

This report analyzes the impact of performance measurement systems on the ethical behavior and culture of a car sales company in Australia. It discusses the different performance measures and their motivational impacts on management behavior. The report also evaluates the financial and non-financial measures on the firm.

Running head: PERFORMANCE MEASUREMENT SYSTEMS
PERFORMANCE MEASUREMENT SYSTEMS
Name of the Student
Name of the University
Author Note

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Executive Summary
As the business environment has become relatively competitive, it has become important for the
employees to come up with various performance measure aspects which will help them to attain
their overall success in the long run and align their organizational goals with the overall goals of
the firm in the long run. The report is based on the performance of a Car Sales company which is
an online classifieds in Australia. The different performance measurement systems having an
impact on the ethical behaviour and culture of the firm will be discussed, which will then be
followed by the engagement in the overall objectives of the measures and how are they
contributing to the overall purpose of the firm.

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Table of Contents
Introduction......................................................................................................................................4
About the company..........................................................................................................................4
Discussion........................................................................................................................................5
Impact of PMS on ethical behaviour and culture of the firm......................................................5
Performance measures having greatest motivational impacts on management behaviour..........9
An evaluation of financial as well as non-financial measures on the firm................................11
Conclusion.....................................................................................................................................13
References......................................................................................................................................15

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Introduction
The business environment has become highly competitive in nature and with respect to
this, it has become considerably important for the different managers to ensure that they are able
to successfully carryout the overall daily operations of the business and in line of this, they are
also able to ensure that they are successfully able to come up with measurement systems which
will assist them in attaining their overall objectives (Atkinson, Waterhouse and Wells 1997). In
addition to this, very often these performance measures tend to maintain the overall ethicality of
the organization and tends to have an impact on the overall motivation level of the employees.
Hence, the primary objective of the given report can be stated to be to analyse the different
performance measures which have a long term impact on the overall behaviour of the employees
and the manner in which these tend to motivate them to perform well. In addition to this, certain
performance measures both financial and non-financial shall also be provided which will assist
in ensuring that the firm can perform well in the long run (Parida et al. 2015). The company
which has been chosen for the purpose of the analysis is the Car sales company in Australia. The
information about the company and its policies shall be backed by relevant financial and
management theories.
About the company
The Carsales.com Ltd is one of the largest online automotive, marine and motorcycle
classifieds businesses as present in Australia. The particular website has been successfully able
to attract Australians in the purchase of or selling of different cars, motorcycles, trucks, boats as
well as the caravans (Carsales.com.au 2019). The subsidiary employs a total of 600 people in the
country with respect to which it ensures that it is able to develop the overall technology and
advertise in a profound manner which will help them to create solutions which would help the

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people in solving their needs. The firm also as its operations in the automotive classified
businesses as present in Brazil, South Korea, Indonesia, Malaysia as well as Mexico. The vision
of the company is to provide a smooth buying as well as selling journey to the different
Australians. In addition to this, the company also engages in the marketing, development as well
as communications of the car products and related services so as to provide the different
customers with greater confidence when it comes to trading cars online (Carsales.com.au 2019).
The company has to offer a wide variety of products and keeps adding certain services and
products in their portfolio. This helps them to provide additional support to the different
customers and provide them with adequate support in all the steps of the car purchasing and
selling journey.
Discussion
Impact of PMS on ethical behaviour and culture of the firm
In order to make the overall procedure of human resource management comparatively
easier in an organization, it becomes comparatively systematic to come up with certain
Performance measurement system measures which will ensure that the overall performance of an
employee can be managed successfully and in addition to this, it will later become easier to
provide motivational factors and remuneration to the different employees (Peoplematters.in
2019). A good performance measurement system measure goes a long way in bringing about an
improvement of the overall performance of an organization and helps in the management of the
teams as well as the different individuals. Moreover, it also goes a long way in ensuring that the
firm is able to achieve its overall goals as well as ambitions (Kearney 2018). A good

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performance measurement system has a strong impact on the overall management of
performance in an organization. This is because, it tends to ensure that an employee understands
the importance of their contributions to the overall organizational goals as well as the objectives.
Moreover, the performance measurement system helps in assisting that every employee gains a
clear idea of what is expected out of them in the long run and additionally, it also helps the
management to understand whether the particular set of employees have the particular skill set
which will then, help to ensure that, they are successfully able to meet such expectations or else
adequate training is provided to them based on the same (Landy, Zedeck and Cleveland 2017).
Thirdly, a good performance measurement system also goes a long way in ensuring that a firm
will be able to align the objectives of the firm easily and facilitate an effective communication
which takes place throughout an organization.
Moreover, it also tends to facilitate a cordial as well as harmonious relationship between
the different employees as well as the line manager which then helps in incorporating trust as
well as empowerment within the firm. It is important to note that, these factors tend to have a
long term impact on the overall culture and ethical behaviour of the employees in the firm due to
a variety reasons. These can be stated to be the reasons that when the manager is providing an
open and transparent feedback to the different employees then they feel more trusted in the
overall objective of the firm. In addition to this, when they feel more trusted and vested into the
overall culture of the firm and take their personal decisions in alignment with the overall
objectives of the firm which thereby encourages ethical behaviour in the organization (Vincent,
Gribonval and Févotte 2006). Moreover, the performance measurement system measures tend to
ensure that a clear linkage between the performance of a affirm and the compensation which
makes the overall objective clear and in addition to this, it also helps them to be more loyal to the

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firm and encourage a culture which is largely motivated by good performance and the culture of
the firm also turns out to be more engaging in nature. Additionally, when the firm is able to
develop satisfactory performance measures for an organization the employees gain an access to
ample learning opportunities which then further develops the overall culture of the organization
and gives a rise to a continuous learning system at the workplace. When the different employees
are largely engaged in a performance leadership program then they tend to contribute well to the
overall purpose of the firm and the overall performance of the different employees tends to
improve consistently.
Another reason why the performance measurement system is understood to have a
positive impact in the culture and the overall ethical behaviour of the work environment in
general can be largely contributed to the fact that when the good performance is recognized and
rewarded in workplace then, in such a case, the different people tend to get motivated and in
addition to this, they are also able to ensure that they are successfully able to meet with the
organizational objectives as these will go a long way in helping them to feel one with the firm
and successfully be able to contribute to the overall objective of the firm and create a culture
which tends to encourage the different employees at large (Simons et al. 2000). Lastly, it also
tends to provide maximum growth opportunities for the employees by providing them with
adequate training and development opportunities. Hence, in line of this, it becomes important to
understand that, as the firm is willing to provide maximum opportunities for the overall career
growth of the employees then, in line of this, they get attached to the overall objective of the firm
and their performance improves considerably which brings about better results for the firm and
the corporate environment at large.

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Hence, while understanding the impact of performance measures on the overall ethicality
of the firms, it needs to be understood that, successful organizations are one which re-invent the
wheel to ensure better momentum for the firm and in addition to this, they are also successfully
able to engage in a long term relationship with the employees (MacLean, Kerr and Qaseem
2018). Moreover, it also becomes considerably crucial to understand that, if a firm wants to build
an ethically strong and culturally active market then in line of this, they will be required to
ensure that, they are being able to engage into an engaging relationship with the employees. This
assists in building a high performance culture. Moreover, the different organizations are required
to ensure that, their overall performance measurement systems are largely aligned with the
overall company culture and helps in building a considerably strong vision as well as long term
growth objectives.
In line of this, after the analysis of the annual report of Car sales, it is required to be
understood that the firm, the firm strongly believes in its People`s culture and in line of this, they
ensure that as they are treating the different employees as the assets of the firm, they are
investing heavily in the particular area (Carsales.com.au 2019). The staff turnover, performance
measurement measures and engagement measures of the firm are at their personal strongest
measure and in order to improve the overall strength of the workplace, the firm has employed
more employees and promotes a strong culture of diversity as well as inclusion which helps them
in making the overall organization a successful one. In addition to this, they tend to ensure that
their performance measures are closely related to the overall growth, sport as well as the
development of the employees which will go a long way in seeing to it that the firm is able to
find adequate success in the long run (Nudurupati, Tebboune and Hardman 2016). It must be
further understood by the Carsales, that the employees these days look out for better growth and

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an engaging environment where their firm is encouraged to perform well and in addition to this,
they are also able to ensure that the employees remain associated with the firm for a long time
frame. Moreover, as the new generation of employees can be understood to be millennials, they
expect an integrated Performance measurement procedure in order to ensure that, they are being
able to come up with strong overall goals for the workplace and attain their overall targets.
Performance measures having greatest motivational impacts on management behaviour
As understood earlier, the performance measures which tend to have the greatest
motivational impacts on the management behaviour can be rightfully understood to be those
performance measures which are comprehensive in nature and in addition to this, those
performance measures which will motivate the different employees to perform considerably
well. The management is present to act as a link between the CEOs of the firm and the lower
level employees (Lebas 1995). Hence, in line of this, it becomes considerably important for them
to ensure that they are successfully able to come up with performance measures which shall have
the capacity to have a positive impact on the different employees and in addition to this, they
shall also comprise of the facility to engage the managers into performing considerably well.
According to Nollet, Beaulieu and Fabbe-Costes (2017), motivate the senior management is a
comparatively difficult task and in line of this, it needs to be understood that in case the firm is
required to engage in long term success, they need to come up with performance measures which
will help in ensuring that they are successfully able to motivate the management and encourage
them to perform in a better manner. Hence, in this section of the report the different performance
measures which tends to motivate the behaviour of the managers can be understood to be as
follows:

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 Number of customers converted: The number of customers the firm has been able to
convert into the last few days serves as a considerably relevant measures which goes a
long way in making the firm understand the overall activities of the different employees
which tend to exist (Kaplan and Norton 2001). The higher number of conversions, the
better it will be for the manager and hence, when the management will be able to observe
their overall contribution, then in such a case, they would be able to ensure that they get
motivated and perform better from the next time.
 Net sales: The net sales can also be understood to be a relative performance measure
which can be largely used to motivate the different employees as present especially the
ones as present in the management position and bring about the best in their overall
performance.
 Number of cases handled: The number of cases handled by the manager also acts as a
relative performance measure which will help the management in understanding their
overall performance clearly and in addition to this, it will also help to understand how
they have performed in the long run (Neely 2007).
Although it can be largely understood that these specific performance measures go a long
way in seeing to it that, the management behaviour is largely positive and that they are being
able to perform considerably well. However, it needs to be understood that, it is important for the
organization to ensure that, the expectations are made clear. The management will be required to
ensure that they possess a strong knowledge about the overall expectations made out of them
which will then assist them in attaining their overall goals. Moreover, the management also
needs to be provide continuous feedback (Hervani, Helms and Sarkis 2005). The continuous

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feedback system is able to motivate them considerably and in line of this, it needs to be
understood that, if the firm wants to positively motivate the overall behaviour of the employees
and the management alike, then in such a case, they would be required to ensure that they are
successfully able to encourage the different employees and let them know about the different
initiatives which can be taken.
In addition to this, maintaining a belief in the employees forms a crucial part of the firm. In
line of this, it can be rightfully understood that if the employee aims to engage into a long term
success with the employees then in such a case, they will be successfully required to ensure that,
they are successfully able to deal with the employees and make them feel at par with the firm. In
addition to this, providing the rewards to the employees can also be considered to be a crucial
part of the firm. In line of this, it can be rightfully understood that, the employees and the
management are also required to be provided with adequate rewards which will then go a long
way in helping them to attain their overall objectives (Hervani, Helms and Sarkis 2005). In line
of this, if the employees feel motivated, they shall perform adequately with respect to the overall
objective of the firm.
Hence, from the particular analysis, it could be rightfully understood how an organization
can easily, use certain techniques and also make use of certain performance measures in order to
ensure that they are successfully able to motivate the different employees and provide them, with
a suitable workplace environment. Even Car sales ensures that it provides the different managers
with adequate remuneration and incentives which will help in motivating them and these
incentives are largely aligned with the overall objectives of the firm which makes them
successful in the long run(Carsales.com.au 2019).

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An evaluation of financial as well as non-financial measures on the firm
The performance measures of the firm need not be always linked to the overall financial
aspects of the firm but can also be related to the non-financial aspects of the firm. Hence, in
order to ensure that Car sales is successfully able to attain all its objectives and ensure that they
are successfully able to, motivate the employees to perform in alignment with the shareholder
goals and objectives, the following measures are taken into consideration (Saunila 2016). These
measures help in ensuring that, the shareholders remain satisfied with the firm and the overall
operations of the firm.
 Company reputation: the company reputation forms an important non-financial measure
which can be largely made use of the different firms which will go a long way in
assisting them to understand the different actions which are largely taken by the firm and
their effectiveness. The different shareholders are largely concerned with the overall
image of the firm and hence, this non-financial measure will serve as a useful tool which
can be used by the firms to ensure success (Bourne et al. 2000). Car sales makes use of
the same non-financial measure which will ensure that the firm is successfully able to
understand the different initiatives which they need to adopt to enhance the image of the
firm.
 Innovation: The innovation and creativity level in a firm can also be understood to be a
non-financial measure in a firm which would go a long way in ensuring the overall
success of the firm and make the shareholders satisfied. The concept of Car sales can be
largely understood to be based on the innovation and creativity and hence, with respect to

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this, the innovation of the firm can be understood to be relatively high (Carsales.com.au
2019).
 Customer experience: The customer experience can be understood to be another non-
financial performance measure which can be largely used by the different organizations
as it will go a long way in seeing to it that the firm is successfully able to engage in
operations which will result in the overall satisfaction of the customers (Baker 1992). Car
sales places utmost importance on maintaining the overall operations of the firm. In
addition to this, it also helps to ensure that the goals of the shareholders are achieved.
 Market share: The market share which is enjoyed by a firm also helps in assessing its
performance. Car sales enjoys a considerably high market share in the Australian market
and hence, in line of this, it can be understood that they make use of this performance
measure to satisfy its employees.
 Net sales and Net returns: The net sales and net returns can be understood as another
financial measure which can largely be used by any firm to determine its overall
operational success rate (Hatry 2006). In addition to this, Car sales ensures that it is
successfully able to make use of relevant measures which will help it to convey its
overall profitability of the firm as the different members of the stakeholder group, care
about higher sales as well as profits which will increase their returns.
Conclusion
Hence, in line of this, it could be rightfully understood that the performance measurement
system measures form an essential part of the workplace and any firm which wants to attain
success in the long run would be required to ensure that it is successfully able to make use of the

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performance measure system in order to be able to attain their objectives. The report outlined the
overall background of the Car sales company which is an online platform based on the sales as
well as purchase of the different cars in Australia. The different performance measures and their
impact on the ethical behaviour and culture of the firm was understood which was then followed
by the understanding of the different measures to motivate the employees and satisfy the
stakeholders. If Car sales wants to ensure long term competitive advantage, it would be required
to engage in the use of these measures which help in seeing to it that, the firm is able to attain its
goals successfully.
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