To evaluate the performance of any company is most essential thing to find out for company users like board of directors, owners and even employees. A big company has number of stake holders as many people are associated with the performance of the company.
If company performs good then everyone will happy but unfortunately if something is going wrong with the performance of the company then many complications may arise. For example if company performance graph is going down continuously then its very likely that the suppliers will think about the future contracts with the company.
Similarly company having bad performance will also lost its most useful asset, yes its man power. Many experienced employees will contact with your competitors to get secured jobs.
There is many myths regarding measuring company performance. Still many owners think that only profit figure shows the level of success. Its not more applicable in this modern world. Now different parameters have to be followed while measuring company performance.
We need a balanced scorecard to evaluate the performance of company. There are four basic factors that will be focused to get the proper performance report.
The importance of financial consideration is paramount in most situations but not in all situations. No one can deny the importance of financial facts and figures but these figures are not the only parameters. We would have to look on other aspects of success.
2. Customer perspective:
Its the most important factor by which anyone can estimate the performance of the company. Like if company is making huge profits but their customers are not properly entertained then its likely in the reduction of customer retention rate. Other factors include in customer perspective are on time delivery, percentage sale of new product and customer complaints.
3. Internal process perspective:
In this component we will focus on the internal procedure of the company in order to meet the customer requirements.
4. Learning and growth perspective:
Finally we have this perspective; in this we focus on how an organization is improving its innovative skills. Is company is working in some innovative way or still using the old and out dated procedures for manufacturing.
Now at last I would like to say that no one can evaluate the performance by using only one perspective, managers would have to use this balanced score card to get the actual and more realistic results. If company is making handsome profits then we cannot declare that organization is making progress, as financial success is only matters in short run. If manager is neglecting any component of this score card then it will be very bad in long run.