The Evaluation and Control Process

THE EVALUATION AND CONTROL PROCESS

Ensure that a company is achieving what it set out to accomplish. It compares performance with desired result and provides the feedback necessary for management to evaluate results and take corrective action, as needed.

A Five Step Feedback Model:

Determine what to measure : Top managers and operational managers need to specify what implementation process and results must be capable of being measured in a reasonably objective and consistent manner. The focus should be on the most significant element in a process the ones that account for highest proportion of expense or the greatest number of problems. Measurement must be found for all important areas, regardless of difficulty.

Establish standards of performance: Standards used to performance are detailed expressions of strategic objectives they are measure of acceptable performance results. Each standard usually includes a tolerance range that defines acceptable deviation. Standards can be set not only for final output but also for intermediate stages of production output.

Measure performance : measurement must be made at predetermined times.

Compare actual performance with the standard: if actual performance results are within the desired tolerance range. The measurement process stop here.

Take corrective action: if actual results fall outside the desired tolerance range action must be taken to correct the deviation, the following questions must be answered:

1.     Is the deviation only a chance fluctuation?

2.     Are the process being carried out incorrectly?

3.     Are the process appropriate to the achievement of the desired standard? Action must be taken will not only correct the deviation but also prevent it is happening again.

4.     Who is the best person to take corrective action?

Measuring performance

The end result of activity. Which measures to select assess performance depends on the organizational unit to be appraised and the objective to be achieved. The objectives that were established earlier in the strategy formulation part of strategic management process (dealing with profitability, market share, and cost reduction, among others) should certainly be used to measure corporate performance once the strategies have been implemented.