Steps in The Control Process
The process of management control involves four steps. The FOUR steps are the following: establish objectives and standards, measure actual performances, compare essential to management, and take corrective action as needed.
STEP ONE: ESTABLISH OBJECTIVES AND STANDARDS:
The control process beings with planning. Performance objectives represent the key results that an individual wants to accomplish. The focus should be describing critical or essential results that will make a substantial difference in the success of the organization. When the key results are identified, the individual also has to specify the standards to measures that will be used to evaluate their quantify the standards and measure that will be used to evaluate their accomplishment.
For example, BMO Financial Group uses a diversity index to quantify performance on diversity issues. By setting strategic direction for quantitative and qualitative diversity goals, BMO measures executive performance against those goals on a quarterly and annual basis.
Output standards measure performance results in terms of outcomes like quantity, quality, cost or time of accomplished work. Input standards, measure effort in terms of the amount of work expended in task performance.
STEP TWO: MEASURE ACTUAL PERFORMANCE
The second step is to measure actual performance. The goal is to accurately measure the performance results and the performance efforts. Measurement must be accurate enough to spot significant differences between what is really taking place what was originally planned.
STEP THREE: COMPARE RESULTS WITH OBJECTIVES AND STANDARDS
To compare objectives with results. This step is expressed as the following control equation:
NEED FOR ACTION= Desired performance- actual performance.
STEP FOUR: TAKE CORRECTIVE ACTION
The final step is to take any action necessary to correct problems or make improvements. Management by exception is the practice of giving attention to situations that show the greatest need for action. Managers should always be aware of two types of exception. The first is a problem situation in which actual performance is below the standard. The second is an opportunity situation in which actual performance is above the standard.
The process of management control involves four steps. The FOUR steps are the following: establish objectives and standards, measure actual performances, compare essential to management, and take corrective action as needed.
STEP ONE: ESTABLISH OBJECTIVES AND STANDARDS:
The control process beings with planning. Performance objectives represent the key results that an individual wants to accomplish. The focus should be describing critical or essential results that will make a substantial difference in the success of the organization. When the key results are identified, the individual also has to specify the standards to measures that will be used to evaluate their quantify the standards and measure that will be used to evaluate their accomplishment.
For example, BMO Financial Group uses a diversity index to quantify performance on diversity issues. By setting strategic direction for quantitative and qualitative diversity goals, BMO measures executive performance against those goals on a quarterly and annual basis.
Output standards measure performance results in terms of outcomes like quantity, quality, cost or time of accomplished work. Input standards, measure effort in terms of the amount of work expended in task performance.
STEP TWO: MEASURE ACTUAL PERFORMANCE
The second step is to measure actual performance. The goal is to accurately measure the performance results and the performance efforts. Measurement must be accurate enough to spot significant differences between what is really taking place what was originally planned.
STEP THREE: COMPARE RESULTS WITH OBJECTIVES AND STANDARDS
To compare objectives with results. This step is expressed as the following control equation:
NEED FOR ACTION= Desired performance- actual performance.
STEP FOUR: TAKE CORRECTIVE ACTION
The final step is to take any action necessary to correct problems or make improvements. Management by exception is the practice of giving attention to situations that show the greatest need for action. Managers should always be aware of two types of exception. The first is a problem situation in which actual performance is below the standard. The second is an opportunity situation in which actual performance is above the standard.