This text provides informative, short introductions to the core concepts of Operations Management. This text contains more than 50 concept entries and is fully cross-referenced.An outstanding reference for Operations Management students at all levels.
Performance management is the managerial task concerned with identifying performance targets, communicating them, and making sure that these targets are achieved.
Internal versus External Performance
Organisational performance is difficult to manage because managers only partially control those factors by which markets will assess a firm's performance. Figure 6 makes a distinction between internal and external performance. Managers can exert direct control over internal performance measures: by investing, training, staffing, and motivating, they can improve performance along one of the internal dimensions. In contrast, the external performance of a firm is assessed by several different and independent parties through a process of value perception (see Customers).[Page 66]
Figure 6 Internal vs. external performance
The internal performance of an operations system has traditionally been described along five dimensions:
- Cost: Refers to ...