Chapter 11: Information and Control Processes 393
Having a firm grip on performance measurement helps managers know where to spend money, where to assign more personnel, and which projects to promote or abandon. The more statistics that are available, the more early warnings managers have about problems and opportunities. But performance isn’t just about numbers at eBay. Measuring customer (user) satisfaction requires a mix of methods, such as surveys, monitoring eBay discussion boards, and personal contact with customers at regular live conferences.
By defining standards and effectively using financial and statistical reports, eBay man¬agers can identify trouble spots and move quickly to take corrective action when and where it is needed.14
Managers at companies such as eBay, Oracle, Verizon, General Electric, and Microsoft often track both nonfinancial and financial data by means of an executive dashboard. Forrester Research Inc. estimated that 40 percent of the 2,000 largest companies were using dashboard technology by 2006, and that number has con¬tinued to grow.15 An executive dashboard, sometimes called a business performance dashboard, is a software program that presents key business information in graphi¬cal, easy-to-interpret form and alerts managers to any deviations or unusual pat¬terns in the data. Dashboards pull data from a variety of organizational systems and databases; gauge the data against key performance metrics; and pull out the right nuggets of information to deliver to managers’ laptops or PCs for analysis and action.16 Exhibit 11.5 shows an example of an executive dashboard. Managers can see at a glance key control indicators such as sales in relation to targets, fill rates on orders, number of products on back-order, production status, or percentage of customer service calls resolved, and then drill down for additional details.17
Dashboard systems coordinate, organize, and display the metrics that managers consider most important to monitor on a regular basis, with software automatically updating the figures. Managers at Erickson Retirement Communities use a dash¬board to monitor and control costs in areas such as salaries and resident meals. At Verizon Communications, a dashboard system keeps track of more than 300 different measures of business performance in three broad categories: market pulse (including daily sales numbers and market share); customer service (for example, call center wait times and problems resolved on the first call); and cost drivers (such as number of repair trucks in the field). Managers in the various units choose which metrics their dashboard will display, based on what relates most to their unit.18
Other elements of the overall control system listed in Exhibit 11.4 are reward systems and quality control systems. Reward systems offer incentives for managers and employees to improve performance and meet departmental goals. Managers and employees evaluate how well previous goals were met, set new goals, and estab¬lish rewards for meeting the new targets. Rewards are often tied to the annual per¬formance appraisal process, during which managers assess employee performance and provide feedback to help people improve performance and obtain rewards.
Quality-control systems involve training employees in quality-control methods, setting targets for employee participation, establishing benchmarking guidelines, and assigning and measuring Six Sigma goals. Benchmarking means the process of persis¬tently measuring products, services, and practices against tough competitors or other organizations recognized as industry leaders.16 Six Sigma specifically means a highly ambitious quality standard that specifies a goal of no more than 3.4 defects per mil¬lion parts. However, it has deviated from that precise meaning to refer to a whole set of control procedures that emphasize the relentless pursuit of higher quality and
