For a business to be run successfully, it is not quite an easy job. It is critical for a continued tracking any data to ensure successful business operations. An operations manager has to view various metrics for a successful business operation. Some of the performance metrics that will be viewed in this paper includes the:
The score of customer satisfaction
The score of employee satisfaction
Gross margin
Productivity
Cash Flow
Various metrics can be used to measure customer satisfaction such as the Voice of Customer (VOC), Net Promoter Score (NPS) and the customer satisfaction metrics as well (Gayeski et al., 2016). Measuring customer satisfaction is for every product and service provided is critical and should be done for both the internal and the external clients over some duration. The metrics is also important in that it helps in identifying a function that best serves and satisfies the customers, as well as, a service or product that requires an organization’s attention.
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It is important for most corporations to ensure that it satisfies its workforce to prevent the turnover intentions of workers. Employee motivation and engagement in the decisions made in a company helps in increasing their performances. One way in which employee satisfaction can be attained is boy setting SMART goals that help in the reduction of attrition in workplaces that has a negative effect on the job performances. The employee satisfaction measurement helps in improving job performance especially in these modern times when the increased pressure margins and the increment of the demand for resources exists.
Contrary to that, the gross margin is another significant business metrics that helps in indicating the health of a business. In most cases, when the gross margin is high, the more it indicates that the business is on the right track in every aspect of operation. The constant management, as well as, monitoring of the gross margin helps in reducing surprises that may be unpleasant in a business. Moreover, it helps in the deciding of important initiatives that are beneficial in pricing, sales efforts and investing as well.
The productivity metrics is also relevant in business operations. The term productivity is defined as the numerator and denominator unit for every output per unit. The measurement of productivity in an organization is dependent on the goals set for a particular period of the productivity rates of a business. In the case whereby a business exceeds the sales and marketing expenses, then that is a wonderful indicator of the fact that the business is on the right track and the right path to success as well. Further, cash flow is a critical aspect of performance management in an organization (Kang et al., 2016). Two metrics exist of measuring cash flow in a corporation that is inclusive of Days Sales Outstanding (DSO) and Days Payable Outstanding (DPO). Importantly, the DSO helps in giving a company the accurate days required to collect the accounts that are received in the outstanding payments. On the contrary, DPO is essential in giving the number of days taken by any firm to pay its vendors (Knoppen et al., 2015). In a case whereby the vendors are paid faster than the way cash is collected in a company, then this shows that there is overall performance danger in the firm. Moreover, if the DSO has increased in a firm over the recent period, a gap of processing cash internally exists in a company.
In conclusion, this paper shows the fact that metrics of performance management of an organization is critical in improving the business overall performances. Besides that, it helps the managers to identify areas that need correction for the success of a company. Therefore, it is important to measure various performance managements strategies to help in increasing the productivity of a company.
References
Gayeski, N., Kleindienst, S., Gagne, J., Samouhos, S., Cruz, R., & Werntz, B. (2016). Data and Interfaces for Advanced Building Operations and Maintenance. ASHRAE Transactions , 122 (2), 134-140.
Kang, N., Zhao, C., Li, J., & Horst, J. A. (2016). A Hierarchical structure of key performance indicators for operation management and continuous improvement in production systems. International Journal Of Production Research , 54 (21), 6333-6350. doi:10.1080/00207543.2015.1136082
Knoppen, D., Ateş, M. A., Brandon-Jones, A., Luzzini, D., van Raaij, E., & Wynstra, F. (2015). A comprehensive assessment of measurement equivalence in operations management. International Journal Of Production Research , 53 (1), 166-182. doi:10.1080/00207543.2014.944629
