The effectiveness of performance metrics lies solely on collection and keeping of the correct data and using it to improve the operations and processes of the organization. Performance metrics are a means of quantitatively assessing the performance of a company (Karlson, 2016). In our company, several quality and performance metrics are used to ensure the quality of our processes. We have various metrics for our major operating units that are, the finance unit, marketing, and almost metrics that measure employee performance. The measurement of the performance is done in relation to our goals and the results are used to determine whether we have achieved them within the stipulated time frame.
In the finance department, some of the performance metrics used are; gross profit margin, net profit, and net profit margin. The gross profit margin is the amount of money that the company gets after paying for the cost of goods (Williams, 2017). This helps determine if the pricing of goods is done competitively compared to other organizations. Net profit determines what the company is left with after deducting all its operating expenses such as salaries. This helps the company identify other areas of weakness apart from poor pricing. Net profit margin is used to calculate the profits that the company gets after deduction of expenses from the total revenue. The expenses are inclusive of taxes and this metric is mostly done for the owners and shareholders of the company.
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The marketing performance metrics uses some of the key indicators such as Return on Advertising Spend. This is meant to identify all the advertisement done and whether they are profitable or not. Also, Customer Acquisition Cost is used to determine the cost of sales and marketing, it determines whether the marketing means used are efficient.
Recommendations
Quality work is key to Google’s day to day work and to increase the efficiency, the company should create a meritocratic environment where great performance is identified and rewarded (Mello, 2016). The company should embark on rewarding the employees according to performance. This will make each employee improve their performance to get more rewards. The company should also work on helping the employees to realize their full potential by practicing on-job-training and great people management. Employee performance metrics are used to determine the efficiency of employees, their quality of work and the extent to which they observe work values and ethics (Williams, 2017). By following the value and ethics as outlined by the organization, the employees would be working towards the overall objective and as a result their skills get improving.
Reference
Karlson, K. (2016). 12 Business Metrics That Every Company Should Know. Retrieved from https://www.scoro.com/blog/12-business-metrics/
Mello, F. (2016). Performance Management at Google: How Google does Performance Management. Retrieved from https://static1.squarespace.com/static/55267b52e4b0410f3276af04/t/57619b6886db43eabc909c99/1466015827664/google.pdf
Williams, A. (2017). 11 Key Business Performance Metrics for Better Operations. Retrieved from https://alistemarketing.com/blog/business-performance-metrics/
