ByOnlinecourses55
Measure performance in each area - productivity work
Even in the smallest companies, there are different sectors and specialized areas that drive the development of products, services or the business structure as a whole. An effective strategy to minimize risks and losses associated with growth is to accurately measure the performance of each of these areas or sectors.
Overall company results are useful for assessing whether we are profitable in general terms, but they do not reflect the specific performance of each area, where one particular sector may be excelling while others are generating losses.
Below, we will explore the fundamental aspects you should know about this strategy.
Measuring performance by area involves evaluating each sector independently, without focusing on the company's overall results. This means that, even if your company is in a good overall position, each area will be evaluated according to its own results.
For example, if you produce handcrafted clothing and your sales are going well, it is possible that the production and communication areas are performing well. However, when analyzing your physical stores, you might notice that they do not generate enough sales to cover rental costs.
In this case, although your online sales are a success, your physical stores could be representing a loss.
What actions should you take with this information in hand?
Some areas may be corrected or eliminated, while others will need adjustments to improve. Following the example of physical stores, you could choose to close them and concentrate on online sales, or try to correct them to make them profitable.
On the other hand, if the losses come from the production cycle because it is not efficient in relation to the price of the product, you will have to correct this area, since without a production process you would have no product to offer to your customers.
Another key aspect is to measure the performance of the workers, since, as individuals, each one has his or her own performance. Evaluating the whole team as a whole could give a wrong view, so it is important to analyze individual performance. This process can be more complex depending on the size of the company and the relationship you have with your team, but you can rely on the managers of each area to get a better understanding.
You can also focus on identifying the factors that influence the exceptional performance, both positive and negative, of certain employees. In the case of positive aspects, you could extend them to the rest of the team, for negative aspects, it is important to correct them before they affect other employees.
Employees are the most valuable resource in any company, as they are responsible for the success or failure of operations and are behind the results you achieve.
