1. Financed bySupported byImplemented in cooperation with Evaluation and Monitoring

2. Financed bySupported byImplemented in cooperation with Controlling - Function of management Performance measurement system Performance Plan Basic Steps in a Performance Appraisal Organizational Performance Management System - Balanced Scorecard Selecting measurements Linking measures to strategy Changing the Plan As Necessary During Implementation Outline

3. Financed bySupported byImplemented in cooperation with Controlling- Function of Management Controlling is an integral part of strategic management It turns planned decisions and objectives into standards of performance Compares what was planned with what was done or achieved Method of directing employees’ activates Control is necessary to keep track of deviations from planned expenditures and performance

4. Financed bySupported byImplemented in cooperation with Frequent changes in the company’s environment, and issues predicting themAttempts to avoid bigger disturbances and problems in the businessEmergence of opportunities and threats that should be addressed It supplies management with important information necessary for corrective actions or new ideas It can serve to motivate employees by connecting rewards and punishments with results and performance The need for adequate allocation and use of company’s limited resources. Reasons for control

5. Financed bySupported byImplemented in cooperation with 1 Determining what we are measuring 2 Defining standards of performance 3 Creating the system for measuring or monitoring 4 Comparing the achieved/ realized with planned 5 Undertaking corrective actions The controlling process consists of:

6. Financed bySupported byImplemented in cooperation with projections and expectations in relation to objectives and effort put into achieving them Determined in terms of expected quantity, quality time In accordance with internal and external circumstances and conditions Standards of Performance

7. Financed bySupported byImplemented in cooperation with Systems of measuring and monitoring must be defined before the implementation of the plan begins The system should include sources of verification: procedures, techniques, and tools to gather and analyze data should be included in the management information system Gathered data should be continuously analyzed to determine if projects are on the right track or have deviated Systems of measuring

8. Financed bySupported byImplemented in cooperation with Determine extent character causes Undertake corrective actions In case of deviation Successfulness of the control system is determined by how measurable are the foreseen activities

9. Financed bySupported byImplemented in cooperation with Validity of dataTimelinessCost-benefit ratio of the systems operationsEase of use and understandingEfficiency of exerting corrective actions Parameters of the quality of control are:

10. Financed bySupported byImplemented in cooperation with Quality management systems build responsibility of staff and managers in performing tasks and reducing the need for traditional product quality methods. In this system is it up to everyone to pay attention to their own deviations or underperformance and react by correcting their own actions Quality Management System

11. Financed bySupported byImplemented in cooperation with Administrative v. Technical Internal v. External Preventative v. Corrective Financial Strategic v. Tactical v. Operational Types of Control

12. Financed bySupported byImplemented in cooperation with Advantages Three Basic Types of Control/Evaluation: Ex-Ante Interim Ex-Post Timing vs. methodologies used Advantages Three Basic Types of Control/Evaluation: Ex-Ante Interim Ex-Post Timing vs. methodologies used Monitoring and Evaluating Monitoring and evaluating are just as important as identifying strategic issues/ goals.

13. Financed bySupported byImplemented in cooperation with The focus is on effectiveness doing the right things the right way to get results. The overall goal is to ensure the organization and all its subsystems are working together in an optimum fashion Performance management brings a focus on overall results, measuring results, focused and ongoing feedback about results, and development plans to improve results Performance Measurement System

14. Financed bySupported byImplemented in cooperation with The organizationDepartmentsProcessesProgramsProducts or servicesProjectsTeams or groups Performance management includes Performance measurement aligns organizational activities and provides the goals of the organization It cultivates a systems-based approach while looking at outcomes and drivers, favoring the long-term views of the organization

15. Financed bySupported byImplemented in cooperation with Organizational Process Individual Levels of performance

16. Financed bySupported byImplemented in cooperation with 1 Identification and prioritization of desired results 2 Establishing means to measure progress towards the results 3 Setting standards for assessing how well results were achieved 4 Tracking and measuring progress 5 Exchanging ongoing feedback among those participants working to achieve results 6 Periodically reviewing progress 7 Reinforcing activities that achieve results and intervening to improve progress where needed Process

17. Financed bySupported byImplemented in cooperation with 1 Review organizational goals 2 Specify desired results 3 Ensure the desired results directly contribute to the organization’s results 4 Weigh and prioritize results 5 Identify first level measures to evaluate if and how well the desired results were achieved 6 Identify more specific measures for each first-level measure if necessary 7 Identify standards for how well the desired results were achieved 8 Document a performance plan 9 Conduct on going observations and measurements 10 Exchange ongoing feedback about performance 11 Conduct a performance review 12 If performance meets standards give rewards, if not plan to address the performance gap. Steps for implementation of the Performance Plan

18. Financed bySupported byImplemented in cooperation with Basic Steps: Conduct ongoing observations and measurements to track performance Exchange ongoing feedback about performance Conduct a performance appraisal/ review If performance does not meet the plan then update it to address the gap, create a performance development plan. A performance development plan clearly conveys : How the conclusion was made that there was adequate performance What actions are being taken and by whom When performance will be reviewed again and how Performance Appraisal

19. Financed bySupported byImplemented in cooperation with Comprehensive approaches to improve organizational performance and include regular reoccurring activities to establish goals and monitor progress towards them. Balanced Scorecard- a framework, methodology, analytical technique, and management system. Organizational Performance Management System

20. Financed bySupported byImplemented in cooperation with The balanced scorecard can be used for management and strategic control Regulation of operational entities or performance processes Favor use of benchmark or comparative data Occasionally simulation or modeling for calibrating measures Support cross operational units comparison Outcomes at this level are clearly defined Management: Monitoring to ensure the strategic choices are the right ones The extent to which the activities planned to achieve them have been undertaken Outcomes at this level are uncertain and difficult to predict Strategic:

21. Financed bySupported byImplemented in cooperation with Questions for selecting measurements: Where do I focus my performance efforts in the organization? How do I identify which organizational results to measure? How do I know what measures to make to evaluate results? What about measures after I’ve made efforts to improve performance? In Balanced Scorecard the areas of measurement (perspective) are : Customer scorecard Financial scorecard Internal business process scorecard Knowledge, education and growth scorecard We define and measure implementation of strategic objectives in each of the 4 perspectives. Selecting Measurements

22. Financed bySupported byImplemented in cooperation with Customer measures identify value propositions companies will have to deliver to targeted customers and market segments. The value propositions are the lead indicators/ performance drivers. Core customer outcome measures are generic and need to be customized to target groups. Market share Customer acquisition Customer retention Customer satisfaction Customer profitability Measurements of value proposition consist of three groups: product/service attributes, customer relationships, and image/reputation Measures of Customers’ Satisfaction and Performance Requirements

23. Financed bySupported byImplemented in cooperation with Financial objectives represent the goal to provide superior returns based on the capital invested in the unit and translates to lower level objectives relating to profitability, asset returns and revenue enhancement. The guiding concept is that the long-term goal is to generate financial returns to investors. All strategies should enable businesses to achieve this goal. Financial Objective Themes Revenue growth and mix Cost reduction/ productivity improvement Asset utilization and investment strategy Risk Management Financial Requirements and Performance

24. Financed bySupported byImplemented in cooperation with Revenue Growth and Mix Sales growth rate Market share for targeted regions, markets, and customers Other measures depend on the objective Cost Reduction and Productivity Improvement Increased revenue productivity Revenue per employee Reduced unit costs Improved channel mix Reduced operating expenses Asset Utilization/ Investment Strategy Objective: Increase revenue and reduce costs. Measure: return-on capital employed and investment Measures of Financial Objectives

25. Financed bySupported byImplemented in cooperation with Internal-process value chain is made up of innovation processes, operations process, and post-sale services. Measures in terms of cost, quality, throughput, and time Innovation Processes: measured from research and product development perspectives Operations Processes: from receipt of order to deliver; efficiency, consistency, timely deliveries. Post-Sale services (warranty and repairs) - focus on time, quality, and cost metrics Measuring Internal Business Processes

26. Financed bySupported byImplemented in cooperation with Measurement categories employee capabilities, information systems capabilities, motivation, empowerment, and alignment Employee capabilities productivity, retention, a satisfaction index Measuring Organizational Learning and Growth

27. Financed bySupported byImplemented in cooperation with Information capabilities strategic information coverage ratio, percentage of processes with real-time quality, cycle time and cost feedback available, access to information about customers Organizational climate for motivation and initiative suggestions made by employees compared with number implemented, rates of improvements made, individual and organizational alignment, team performance

28. Financed bySupported byImplemented in cooperation with Translating strategies into operational terms In order to promote alignment companies must create synergies among various business units and functions by setting a consistent message Basic steps for turning strategic deployment into a continual process Link strategies to budget Call on management to hold regular review of the strategies during their meetings and reviews Develop a process for learning and adapting strategies Three principles that enable measures to be linked to strategy are: The cause-and-effect relationship Outcome and performance drivers Linkages to financials Linking Measures to Strategy