4. Establishing goals to guide & Measures to track.

The objective is to consistently raise the bar

1. Establish goals 2. Define measures to track.3. Carry out an organizational assessment

Important steps

I. Establishing goals to guide

In this dynamic & turbulent business environment, the organizations must continuously improve their products and services to stay ahead of competition. This requires organizations to establish clear goals and objectives.

Vision & MissionVision & Mission

Key Result AreasKey Result Areas

Key IndicatorsKey Indicators

Performance targetsPerformance targets

Implement plansmonitor performance& provide feedback

Implement plansmonitor performance& provide feedback

Changing external and internal environment - e.g . Customer needs, competition, special

market priorities,regulations etc.

Changing external and internal environment - e.g . Customer needs, competition, special

market priorities,regulations etc.

Continuous improvementContinuous improvement

Review & realignas and when needed

Review & realignas and when needed

Mechanism for developing goals to guide

II. Measures to track

Key Indicators (KIs)

• Number of customer complaints

• Number of complaints resolved

• Total sales to repeat customers

• Number of compliment letters

• Growth in sales

KRA - Customer satisfaction

KRA -Quality

Key Indicators (KIs)

• Percentage of lots rejected due to errors.

• Percentage of products having defects detected by customers.

• Number of engineering changes that should have been detected in design review.

• Errors in inspection / test reports.

• Cycle time to get corrective actions.

• Percentage of appraisal cost compared to production cost.

KRA - Financial performance

Key Indicators (KIs)

• Gross profit margin

• Return on capital employed

• Return on sales

• Sales per employee

• Average profit per product

• Total revenue/Total costs

• Total revenue

KRA - Market performance

Key Indicators (KIs)

• Market share

• New markets developed

• Total number of customers

• Total number of new customers per month

• Number of countries purchasing the product

KRA - Manufacturing Productivity

Key Indicators (KIs)

• Yield per ton of raw materials.

• Percentage of parts scrapped.

• Percentage of parts reworked.

• Percentage of parts accepted on concession.

• Percentage of final product graded as seconds.

• Production per man / machine.

KRA - Employee growth & development

Key Indicators (KIs)

• Number of hours of training /Total number of employees

• Training cost as a percentage of sales

• Number of promotions from within/Total number of promotions

• Performance appraisal rating scores

KRA - Innovation

Key Indicators (KIs)

• Number of new product & concepts in review• Number of suggestions submitted by the

employees• Number of suggestions implemented• Number of new products marketed in last 1

year

Examples of developing Performance Targets for

KIs

KRA: Manufacturing Key indicators

• Yield per ton of raw materials.

• Percentage of parts scrapped.

• Percentage of parts reworked.

Performance target

To improve from 60 to 65%

To reduce from 10% to 7 %

To reduce from 15% to 10%

Examples of developing Performance Targets for KIs

KRA: Financial performance

Key indicators

• Gross profit margin

• Return on capital employed

• Return on sales

• Sales per employee

Performance target

• Increase from 12% to 15%

• Increase from 25% to 35%

• Increase from 10% to 12%

• Increase from Rs. 5,00000 per employee to Rs. 6,00000 per employee

III. Carry out assessment

It is extremely important for an organization to carry out an overall assessment of the present status to know their strengths and weaknesses. Click on the next link on the main menu for conducting an overall organizational assessment. The results of this assessment will be extremely important in making future improvements.