Organizational performance can be measured in terms of financial, output metrics, or market share performance. An organization is considered to achieve high performance if it is able to demonstrate growth in its all aspects of organizational performance metrics. The three key criteria to measure organizational performances in all industries are as follows:
Financial performance (profits, return on assets)
Product and market performances (sales, market share)
Shareholder returns (total shareholder return, economic value added)
An organization is generally able to claim a healthy financial performance if its annual net profits continuously increase or if the company reaches its own internal financial targets. Product and market performances are measured when organizations can claim a significant share of the total volume of sales in the market. It is generally thought that with the production of high quality goods or services, organizations will be able to achieve their desired market performances (Richard 2009). For example, Apple Inc. has become an industry leader by producing high quality products for its target market. As a result of their products quality, Apple has been able to increase its net profits and market performances. Between the fiscal years of 2009 and 2010, Apple increased its net sales by 52% and increases its net income from $8,235 million to $14,013 million which has in turn resulted in cumulative increases to shareholders earnings (See Fig 1) (Thomas, 2008).
Fig 1: Apple Cumulative Total Returns from 2006 to 2010
Source: Apple Annual Report, 2010
3.1: Identification of Problems and Opportunities for Quality Improvement
There are three criteria that can be used to identify problems as well as opportunities for quality improvement. First of all, organizations can consider the internal failure costs associated with quality standards which can help them discover quality issues before the goods actual reach the market. In many cases defective products can be identified and corrected internally. An organization can also utilize this method to ensure quality improvement processes are effective.
Another criterion, which is somewhat similar to internal failure cost, is the appraisal costs which organizations can incur in order...
Performance Appraisals Within most organizations, performance measurement is the process in which an organization establishes certain parameters regarding the level of expectations and output with internal staff, external vendors, systems, product quality, and overall ROI. The fundamental purpose of such measurements should be directly related to both improving business and be able to directly evaluate how resources (human or otherwise) are performing. To do so, and to provide outcome that is
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