Performance Measurement to Support Business Strategy - Explain why employee involvement is important for an effective performance measurement system
3 important questions on Performance Measurement to Support Business Strategy - Explain why employee involvement is important for an effective performance measurement system
Worker involvement is important for three reasons:
- Many managers believe that when workers take on real decision-making authority, their commitment to the organization and its objectives increase.
- When decision-making responsibility lies with workers closer to the customer, workers are more responsive to customer concerns and make informed decisions.
- Giving decision-making responsibility to workers uses their skills and knowledge and motivates them to further develop those skills and knowledge in an effort to improve the organizations performance.
Effective worker involvememt present three challenges for management:
- Management must create a system that conveys the organizations objectives and critical succes factors to all members.
- Promoting goal congruence.
- Management must ensure that the performance measures are applied consistently and accurately.
Difficulties in implementing nonfinancial performance measurement systems:
- Fixation on financial measures
- Reliability of nonfinancial measures
- Lack of correlation between nonfinancial measures and financials results
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