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Topic Discussion #7: Performance Measurement

Rahul Hassani

University of South Carolina

HRTM344-Personnel Organization and Supervision

Kawon (Kathy) Kim, Ph.D.

June 12, 2021

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Topic Discussion #7: Performance Measurement

Organizations have developed a wide variety of methods for measuring performance.

Some methods rank each employee to compare employees' performance. Other methods break

down the evaluation into ratings of individual attributes, behaviors, or results. Many

organizations use a measurement system that includes a variety of the preceding measures, as in

the case of applying total quality management to performance management (Noe, et. al, 2018).

Performance measurement is used to motivate managers to make decisions that benefit

the corporation and themselves (Graybeal, 2019). Therefore, the key to good performance

measurement techniques is to set goals that are realistic and that incorporate decisions over

which the manager has control. Then, the company can evaluate the manager based on

controllable factors, which are the components of the organization for which the manager is

responsible and that the manager can control, such as revenues, costs and procurement of long-

term assets, and other possible factors.

An example of Financial Analyst performance goals: (1) create a weekly company update

report with financial metrics, ratios, charts, graphs, and company performance which is

distributed to the executive team, (2) prepare the annual budget for the board of directors,
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including both operating and capital budgets, (3) measure and evaluate the company’s

performance relative to competitors and create a quarterly benchmarking report, (4) provide

quarterly update presentations to the board of directors, (5) create, maintain, and update all

financial models, Excel files, budgets, forecasts, and ad hoc analysis required for the

company/department, (6) possess an extremely high attention to detail, (7) demonstrate a very

fast turnaround time for high priority projects, (8) work closely with other departments to gather

and update important financial information, (9) keep abreast of relevant industry news and

information, and (10) help lead and grow other analysts on the team (Corporate Finance Institute,

n. d.).

A good performance measurement system is one that utilizes appropriate performance

measures, which are performance metrics used to evaluate a specific attribute of a manager’s

role, to evaluate management in a way that will link the goals of the corporation with those of the

manager. A metric is simply a means to measure something. For example, high school grade

point average is a metric used by colleges when considering admission of prospective students,

as it is considered a measure of prior academic success. In the business environment, individuals

who design the performance measurement system must have extensive knowledge of the

corporate strategic plan and the overall goals set by the organization, and a clear understanding

of the job descriptions, responsibilities of each manager, and trends in rewards and

compensation.
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References

Corporate Finance Institute. (n. d.). Financial Analyst Performance Goals & Reviews. Retrieved

from https://corporatefinanceinstitute.com/resources/questions/analyst/financial-analyst-

performance-goals/

Graybeal, P., Franklin, M., Cooper, D. (2019). The Principles of Accounting, Volume 2:

Managerial Accounting. Retrieved from

https://opentextbc.ca/principlesofaccountingv2openstax/chapter/explain-the-importance-

of-performance-measurement/

Noe, Hollenbeck, Gerhart, &Wright (2018). Fundamentals of Human Resource Management,

Eight Edition.McGraw- Hill Education, New York.

ISBN: 978-1-260-07917-3