Page 2 - Microsoft Word - Home assignment 19 Directing Meaning Importance

instance, for improving customer satisfaction in a fast food chain having self-

service standards can be set in terms of time taken by a customer to wait for a
table, time taken by him to place the order and time taken to collect the order.

It is important that standards should be flexible enough to be modified whenever
required. Due to changes taking place in the internal and external business

environment, standards may need some modification to be realistic in the
changed business environment.

Step 2: Measurement of Actual: Performance: Once performance standards are
set, the next step is measurement of actual performance. Performance should be

measured in an objective and reliable manner.

There are several techniques for measurement of performance. These include

personal observation, sample checking, performance reports, etc. As far as
possible, performance should be measured in the same units in which standards

are set as this would make their comparison easier. It is generally believed that
measurement should be done after the task is completed. However, wherever

possible, measurement of work should be done during the performance. For
instance, in case of assembling task, each part produced should be checked

before assembling. Similarly, in a manufacturing plant, levels of gas particles in
the air could be continuously monitored for safety.

Measurement of performance of an employee may require preparation of

performance report by his superior. Measurement of a company’s performance
may involve calculation of certain ratios like gross profit ratio, net profit ratio,
return on investment, etc., at periodic intervals. Progress of work in certain

operating areas like marketing may be measured by considering the number of
units sold, increase in market share etc., whereas, efficiency of production may be

measured by counting the number of pieces produced and number of defective
pieces in a batch. In small organizations, each piece produced may be checked to

ensure that it conforms to quality specifications laid down for the product.
However, this might not be possible in a large organization. Thus, in large