REFLECTIVE ESSAY

[Document subtitle]

[DATE]
MICROSOFT
[Company address]
The module introduced me to performance management. This was an area I had known about
just by an understanding of the words that make it up viz ‘performance’ and ‘management’.
This is having the general idea that it was about coordinating the activities of an organization
for desired results. Going through the module has however taught me a whole lot more about
the concept. I believe I have acquired more skills in line with the analytical processes involved in
by which the management of an organization can realize its set targets in line with a designated
budget. One particular area of interest was the balanced score card which has been noted as a
strategic management metric [ CITATION Mic14 \l 1033 ]. This is a metric that is used in
measuring the performance of the company and how efficient the management framework is;
it takes active cognizance of the company’s history of performance, and it has been noted that
this enables one to be able to make a prognosis of the future based on these findings, however
this may not be all that is needed to make the most accurate future inferences about where the
company may be headed. With the balanced scorecard four main perspectives are employed in
examining the firm, they include the perspectives on financial performance, customer
satisfaction, learning and growth, and Internal business processes. One thing I particularly came
to understand about these measures is that taking account of them as the balanced scorecard
offers allows an alignment between the strategic position taken by a firm and its operational
aspects. This would imply that the entire scope of activities that are embodied in the company’s
objectives and aims are subsequently passed on and imbibed by the company’s workforce.
Performance management can be measured by defining metrics for all the itemized
perspectives that make up the balanced scorecard. This not only allows for strategic
management but also for planning. Kaplan & Norton (2001 ) point out that the balanced
scorecard provides a link by which strategic performance can be connected to budgeting, this
also allows for a reviewing of observed performance with stated plans.

Measures on the financial perspective will take account of the company’s financial health, this
is revealed in its gross profit margin and improved revenue. When there is a high gross profit
margin, it implies that operational procedures are efficient and in line with the company’s
strategic aims
The customer perspective of the balanced score card takes account of the requirements of the
customer. How much of the customers need are understood by the company? This can be very
crucial in achieving financial goals.

Internal processes relate to how the company organizes its processes to attain its set financial
goals and ensure customer satisfaction based on identified customer wants. This has to do with
its operations

Learning and growth perspective considers other incorporeal propellers of performance within
the organization, this may include training investments in staff that fit them better for customer
requirement delivery and so on

Assigned metrics on these perspectives tailored to a particular business unit can give an idea on
performance management within an organization. The outcome of these measurements can
also be used in making crucial financial decisions that border on the objectives or targets set by
the organization within a defined time limit. For instance, a defined financial target would
determine how available budget is allocated for operations in line with defined customer goals
and the required internal processes that will ensure an attainment of the goals. This is akin to
the Contingency theory which implies that the rules regarding financial management and
decisions are not really set in stone, rather they are determined on the go on the basis of an
evaluation of the business and its context. This will ensure that its set targets are being met.
The balanced scorecard can help with this evaluation. Indeed, from my experience with the
module, better financial decision-making can only be carried out if each business recognizes its
uniqueness and analyzes its objectives and processes uniquely within its own context – this will
lead to a more focused financial decision making that will lead to better performance
management.

I hope to hone my skills as a financial manger by ensuring that I build competencies that are
involved with the approaches and application of the scorecard. This would require gating a
good understanding of the external business environment, an eye for internal issues that have
to do with operations; with these competencies I can always guide managers in line with
defining a scorecard that is accurate enough to help keep the company budgeting focused thus
rightfully addressing all that is needed to keep the company achieving its stated targets. Ideally
company goals can be sorted at different planning levels including the strategic – senior
management level planning which examines the performance of the organization in the long
term, the tactical – which is middle management planning which is usually a breakdown of the
overall corporate goal into actionable goals for departments and units within the organization,
and the operational – that follows the day to day activities of the organization [ CITATION
Kap01 \l 1033 ]. A plan to improve my tactical proficiency would involve which is the ability to
compare actual costs and revenue with budgeted costs across departments in an organization
would involve developing capacities in financial statement analysis – these statements are
considered as the most important in financial decision making. There would also be a need to
develop skills in estimating the financial implication of designated projects, this would require
being able to determine the return on investment, or a cost benefit analysis. Another skill to
master would be budgeting, with this skill a financial manager can help give indications on the
level of progress attained by the organization.

The acquisition of these skills would be a gradual process. It is currently a world where
technology has revolutionized everything data analysis and financial analysis can all be learnt
using relevant accounting software and programs that can simulate real life situations. This
would make learning more practical.

References
Kaplan , R. & Norton , D., 2001 . The Strategy Focused Organization. New York : Havard Business School
Press .

Micheli, P. & Mari, L., 2014. The Theory and Practice of Performance Measurement. Management
Accounting Research, 25(2), pp. 147-156.