Evaluation+of+Performance

In order to work out if a business is being successful we need to evalute it's performance. When a businesses performance is evaluated they can find out which areas are going well and which areas need to be improved. There are two dimensions to look at a businesses //**efficiency**// and //**effectiveness.**//
 * Efficiency** is the use of business resources (money, time etc) in achieving the objectives of the business. An LSO is efficient when it achieves its objectives at the lowest possble cost and using the least amount of resources
 * Effectiveness** is the measure of whether a business is achieving its stated objectives. For exapmle if Rip Curl had an objective to increase profit by 5% and it did it is being effective.

To help work out the efficiency and effectiveness of a business they must set //**Key Performance Indicators**// (KPI). KPI provide a concise, measurable data to evaluate the businesses performance and improvement. Some examples of KPI's are
 * Hours lost due to Industrial Action
 * Rate of Injuries
 * Profit
 * Number of deliveries in full and on time
 * Sales by product
 * Number of quotes performed
 * Gross Profit Margin
 * Number of creditor days

These can be be measured over a period of time and LSO's can see how any strategies to improve affect the results.

It is very similar to you as students setting goals for yourself and then reviewing your goals over time.

This website has more information on KPI's. [|Click Here]

A McDonalds Report that is choc full of KPI's