Performance Measurement Analysis Essay

Performance Measurement
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Performance Measurement
Business operations should foster economic value creation. In that light, measuring various aspects of performance is significant to understand whether a firm is headed in the right direction or not. Some of the critical performance metrics that need to be measured in business operations are the cost of production, sales growth rate, customer loyalty, and the profit margin. Besides, one of the primary objectives of any business is to increase consumers' perceived value and reduce production costs to maximize profits (Micheli & Mura, 2017). Consequently, tracking various aspects of performance helps firm managers know where they should make changes to align with a firm's mission, vision, and strategic objectives.
The performance measurement rationale would be to measure a specific aspect using a unique strategy. For example, the cost of production can be measured by assessing expenses that a firm undergoes in the production process. Sales growth can be tracked by keeping proper records of the cost of goods sold within a particular period, which can be daily, weekly, monthly, quarterly, or annually (Micheli & Mura, 2017). Customer loyalty can be measured by k...