Measuring performance is a step which every organization used to measure aspects of performance that are important for achieving competitive advantage’s (DE Cieri, Krama, 2005, pg 325). More specifically, it enables company to perform better asset management, increase ability to capture customer value, impact on organizational reputation, and improved measures of organizational knowledge (Robbins, 2006, pg 552). Asset management is the basic procedure which allow manager to acquire company’s data such as financial data, and company’s resources and that allows them to manage, renew and disposing of unwanted resources.
Measuring performance also allows employees to know how to provide better customer value because they can improve their management service by looking at current company’s situation in the market. Hence, this will leads to an impact on organizational reputation which able to provide manager the overview of how their service standard is. Besides that, organizational knowledge is created by means of collaborative information sharing and social interaction that leads to organizational members taking appropriate action (Robbins, 2006, pg 553). These steps is traditionally done through performance appraisal which is a process that allows for assessing progress towards the achievement of the desired goals or other performance standards (Cieri, Krama, 2005, pg 325).
“To manage the current business, executives require four sets of diagnostic tools: foundation information; productivity information; competence information; and resource-allocation information. (Vadim Kotelnikov).”
Vadim stated that measurements must be quantitative, systematic, and proactive. It enables managers to capture the needed information to improve the organization as well as administrative purposes such as linking employees’ activities, furnish valid and useful information, and provide development feedback....