Which function of the management process involves setting standards such as sales quotas and production levels?

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Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.

Control is the last function of management. The controlling function will be unnecessary to the management if other functions of management are performed properly.

If there is any imperfection in the planning and actual performance, control will be needed.

Controlling assures that the right things are done in the right manner at the right time. Control may be seen as a process by which the management assures that the actual activities conform to the planned activities.

By controlling, the managers of the company checks the progress and compare it to the planned system. If the planned and actual processes are not running on the same lines, then the required corrective action can be taken.

The steps involved in the control process are:-

1. Establishment of Standards 2. Measurement of Performance 3. Comparison of Actual and Standard Performance 4. Analysis of Deviations 5. Taking Remedial Actions.


Steps Involved in the Control Process: 5 Steps

Steps Involved in Control Process

1. Determination of Smart Standards:

A standard means a benchmark. It means a specific set of factors relating to any organization, indi­viduals, or groups of individuals working in departments or divisions of an organization. A standard should be SMART, meaning Specific, Measurable, Achievable, Realistic and Time-based.

2. Standards may be for Organization as also for its Departments/Divisions:

The overall objectives of an organization represent the standards in respect of organizational perfor­mance as a whole. These objectives are further divided into specific objectives for individual depart­ments/divisions of the organization which become standards of performance for respective depart­ments/divisions.

The departmental goals are further split into standards as regards quality of goods and services, production cost, time standards, sales quotas, schedules, budgets, etc. These standards serve as benchmarks to exercise control, i.e., to measure and appraise performance and to correct deviations, if any.

3. Evaluation of Performance:

i. Measurement and Assessment of Performance:

Having set the standards, the next step in the control process is to ensure that actual performance at all levels is as per those standards. This involves the laying down of methods of evaluating performance, e.g., observation, inspection and reporting.

Of course, an ideal situation would be where measurement of performance can be done ahead of its time so that deviations are anticipated and necessary corrective measures planned in advance. But this may not be possible in all cases. So, the next best thing is to measure the actual performance.

ii. Determination of Standards for Work of a Technical Nature:

If the standards are properly set, and it is possible to obtain necessary feedback on what exactly is happening at different work centers, measurement of actual performance may become relatively easy.

If, for example, there is a definite standard of measurement and if feedback on actual performance is regularly received, then it will become easy to measure and evaluate the actual performance against the pre-determined standards. In fact, if the work involved is of a technical nature, detection of devia­tions can be easily done.

iii. Determination of Standards for Work of a Non-Technical Nature:

It is difficult to set any objective and measurable standards in case of work of a non-technical nature where the performers are experts in their respective fields. For example, performance of Labour Rela­tions Officer will be measured by the record of overtime work, worker absenteeism, worker turnover, number and nature of employer-worker disputes, but they do not tell the whole story.

Performance of Legal Advisor or Financial Advisor is similarly difficult to measure. What, for example, can be a fool-proof test to measure consumer satisfaction? Does current sales revenue show consumers are happy with the goods or services produced by the organization? But will they continue to be so if any competitors) introduces new goods and services at a lower price?

4. Correction of Deviations from Performance Standards:

Continuous monitoring and evaluation of actual performance is done to detect deviations from pre­determined standards. But more important is to take necessary corrective action, not only to correct the existing deviations but also to prevent their recurrence. This calls for proper analysis of the causes of deviations. Reports and explanations received from the subordinates will be valuable in correct diagnosis of the deviation.

Having known what has gone wrong, where, and why, the manager will need to decide on correc­tive action. Perhaps, there is need to acquire modern cutting edge technology, or to re-train workers in work methods. Or, perhaps there are bottlenecks in acquiring material? Or, there are ego problems between workers of different groups engaged in inter-dependent work processes?

Or, perhaps the work targets need scaling down. Whatever the reasons for deviations from standard performance, the manager should take swift corrective action to bring performance back on the rails. Therein lies the success of the entire control function.

Management is an integrated process and system. The last step in the control process, namely, swift correction of deviations discovered during monitoring of work performance, highlights interrelationship between management functions—planning, organiz­ing, directing, staffing, controlling, and coordinating. In any action to correct a deviation from standard performance, the manager will necessarily have to take recourse to any one or more of these functions.

Control function cannot be viewed in isolation. It only spotlights one or the other deficiency in performance of one or another management functions. Setting of performance standards is essentially a planning function. And correction of deviations is nothing but performance of a number of other management functions. So, it may be argued, why these two functions should be bracketed with the process of control? Control, according to this argument, should rest content with detection of devia­tions. But the argument is not valid.

Management is an integrated process and system. A manager’s different functions (planning, organising, etc.) cannot be put in watertight Compartments with one function having nothing to do with the other. One function easily and naturally combines and integrates with the other.


Steps Involved in Control Process – Five Important Steps in the Process of Control

There are five important steps in the process of control.

They are described below:

1. Establishment of Standards:

The first step in the process of control is the establishment of control standards. Standards indicate the criteria against which actual performance is measured. They reflect the desired results or acceptable level of performance.

Control standards may be of two types:

a) Quantitative Standards – These standards are set in physical or monetary terms. Such standards are set up in production, sales, finance and other areas where results can be measured in quantitative terms.

b) Qualitative Standards – It is not possible to set standards in quantitative terms in certain areas, ex. goodwill, employee morale, motivation, industrial relations, etc. In these areas standards are laid down in intangible terms.

2. Measurement of Performance:

This step involves measuring the performance in respect of a work in terms of control standards. Measurement becomes easy when the concern has clearly laid down its objectives and established standards.

If measurement detects deviations at the earliest, then it will enable appropriate action in time. If that is not possible, then deviations should be detected as early as possible.

3. Comparison of Actual and Standard Performance:

The third step in the process of control involves the comparison of actual performance with standard performance. This comparison will reveal the deviation between actual and desired results.

Comparison is very easy when standards are expressed in quantitative terms. If results are intangible or qualitative, personal observation will be used to find out the extent of deviation.

4. Analysis of Deviations:

All deviations need not be brought to the notice of top management. When the deviation is beyond the prescribed limit, an analysis of deviations is made to identify the causes of deviations. The causes of deviation are reported to the managers. The managers take necessary corrective actions.

5. Taking Remedial Actions:

This is the last step in the process of control. Variations are reported to the management for action. The manager takes necessary corrective actions so that deviations may not occur again.

Corrective actions may be:

a) Revision of standards

b) Change in the assignment of task

c) Training of employees

d) Improvement in the technique of direction.


Steps Involved in Control Process – 4 Fundamental Steps to be Followed

Controlling is the measurement and correction of performance in order to make sure that enterprise objectives and the plans devised to attain them are being accomplished.

Control is the last function of management. The controlling function will be unnecessary to the management if other functions of management are performed properly. If there is any imperfection in the planning and actual performance, control will be needed.

The deviations are set right by the controlling function. This function ensures desired results. Planning identifies the activities and controlling regulates the activities. Success or failure of planning depends upon the result of success or failure of controlling.

Controlling assures that the right things are done in the right manner at the right time. Control may be seen as a process by which the management assures that the actual activities conform to the planned activities. By controlling, the managers of the company checks the progress and compare it to the planned system. If the planned and actual processes are not running on the same lines, then the required corrective action can be taken.

Control helps to join the short and the long range plans into a state of greater consistency. This makes sure that over a longer period of time that the original plans are still being followed. Control also helps to bring consistency to the activities throughout the company by setting the processes in such a way that the output of the previous process becomes the input for the next process.

Whatever the type of control that has to be established, there are four fundamental steps to be followed:

1. Establishing Standards:

In any control process the first step is to establish the performance standard to be controlled. A standard is a target against which the performance or the operations can be compared to. Standard costs, Standard times for the operations to be carried out on a component etc., are examples of such standards. Standards can also be set for manufacturing lead time, turnover rate, maintenance and repair turnaround times, inventory levels and quality.

2. Measuring Performance:

Performance is defined as the activity or event that is being controlled. Measuring the performance is the second step of establishing control. The performance needs to be monitored continuously and feedback for the process must be immediately provided. Production volume, production capacity, number of rejects per hour, quality of products, cost per unit etc. are examples of performance measures. While marketing, performance measures might be sales, margins and cost of sales.

3. Compare the Measured Performance against Standards:

Once the performance has been measured, it is then compared with a standard. The standard which the performance has to conform to is found in the first step. The performance does not have to be exactly equal to the standard. It may be either higher or lower, so the standards are usually specified with a tolerance. E.g., the diameter of a steel bar is given by 2 ± 0.1 cm.

4. Evaluate Performance and Take Action:

The last step in the control process is to evaluate the performance as a result of the above comparison. Action is taken based on the information obtained here.

Three types of action can be taken by the management in this step:

i. When the performance of the process falls within the acceptable tolerance limits e.g., the diameter of the wire is 2.05 cm, then the management will decide not to take any action.

ii. When the performance fails to meet the required standards, the management must take an action to correct the deviation depending on the error in the process. Such action may be using better raw materials, adjusting the equipment, paying closer attention to the work procedures or giving more training to the employees.

iii. In some cases the standards are set too high to be met using the present tools and time. In such cases, the management must change the standards to a level within the organisation’s capability to better suit the process.


Steps Involved in Control Process – Establishment of Standards, Measuring Performance, Performance Appraisal, Causes of Deviation and Taking Corrective Action

The process of control consists of following steps:

(i) Establishment of Standards:

The first step of process of control is to establish the standards of performance against which the actual performance are to be evaluated. Standards represent criteria for measurement of performance of different departments or units. Standards may be tangible or intangible, vague or specific.

Generally the standards are set in quantitative terms both as physical nature such as – number of units. Man hours etc., and as of monetary standards such as – sales revenue, cost and other expenses. It should be accurate precise, acceptable workable and flexible.

On the basis of above discussion the standards for control should the following:

(a) It should be simple, easy and understandable.

(b) It should establish relationship between planning and control.

(c) It should be capable of achievement with reasonable amount of cost, time and effort.

(d) It should be flexible and realistic in nature.

(e) It should consistent with the overall objectives of the organisation.

(f) It should be set in consultation with people who are to active them and also on scientific analysis, and.

(g) It should be determined keeping in view capability and competence of the employee concerned.

(ii) Measuring Performance:

The second step of process of control is to measure the actual performance in the same terms in which standards have been established. Accurate and timely measurement of results requires effective system of reporting. The quantitative measurement should be done in cases where standards have been set in numerical terms.

This will make measurement easy and simple. In other cases, the performance should be measured in terms of qualitative factors for example attitude and morale of workers. The controlling is more concerned with control methods rather than control over results.

(iii) Performance Appraisal:

After measuring performance the actual performance is compared with standard. Such comparison will reveal the deviations from the standards. The comparison is easy where standards have been set quantitatively, for example, in case of production and marketing, on the hand. Where results are intangible the appraisal will be based on subjectivity.

According to Dale the control reports should meet there criteria:

(a) It must produce figures that are truly comparable from one period to another and from one section of the business to another

(b) They must be coordinated so that they not only portray the results in different sections of the business, but also make plain the reasons why the business is or is not doing so well as could be expected.

(c) They must be presented in such form that the manager can get the bird’s eye view.

(iv) Causes of Deviations:

After identification of deviations based on comparison of standards and actuals, it is the responsibility of manager to analyse for causes for deviations. He identifies and investigates these deviations as to get into the possible causes responsible for such situation. It is necessary to separate out appropriate exact cause or causes of deviation.

(v) Taking Corrective Action:

When causes of deviations from standards are detected, it is necessary to take corrective actions immediately. It involves revision of standards, reassignment of duties, training of workers, changes in the style of direction etc.

If the standards are found to be defective they will be modified or set up in the light of observations. Joseph Massie pointed out that a manager may commit two types of mistakes at this stage – (i) taking action when no action is needed, and (ii) failing to take action when some corrective action is needed. A good control system should provide some basis for helping the manager.

Franklin E. Folts suggested that, “After a fixed interval, the whole process and procedure of control should be reviewed. They must be modified according to plans and goals to fit realities as conditions change.”


Steps Involved in Control Process – Four Steps in Controlling as a Process

There are four steps in controlling as a process, namely:

1. Establishment of standards,

2. Measurement of performance,

3. Measure, and

4. Remedial measures to correct the deviations, if any.

1. Establishment of Standards of Performance:

Standards or plans are the basic criteria which are used by the managers to measure the performance. Standards maybe expressed in terms of quality (say not more than 4 defects for a million of operations), quantity (how many units are to be produced per hour or how much should be the return on investment), time (to be completed on or before the year 2020) or cost (total cost not more than per unit of production).

These standards also serve as guidelines against which the actual performance is measured.

Formulation of guidelines is no simple task. There could be certain areas where standards cannot be established accurately. The mission of the organisation is to be expressed in terms of yearly or quarterly plans or standards. For instance, an IT company expresses its plans/standards in terms of number of new clients to be added every quarter.

An R&D department expresses its targets in terms of number of patents expected to be filed every quarter. In less technical kinds of work, formulation of standards is very complex task.

Particularly in the today’s context where technology has been changing very fast, automation is involved in the manufacturing operations, standards of performance need to be revised from time-to-time.

2. Measurement of Actual Performance:

After setting the standards of performance, the actual performance has to be measured through performance reviews, actual quantifiable data and so on. There are many activities that are difficult to be measured. In case of mass production, number of standard labour hours can be worked out but if some customised or unique product is to be produced, it may involve more time and the number of standard labour hours concept may not work.

Similarly, for the activities performed by top management such as – strategy formulation, establishing the standard for number of hours for discussion is not tenable. Issues such as – financial health, attitude of workforce, loyalty of the senior managers, brand equity, etc., cannot be exactly measured.

3. Compare:

Once the actual performance is measured, then compare the actual performance with the standards of performance and verify if there are any deviations. There could be certain problem areas or negative or even positive patterns which managers have to focus on. If there is positive deviation, examine in detail how the employee could save so much time. Does it mean that the standard of performance has been determined long time ago and it is not revised in the recent past?

4. Take Remedial Measures:

Where there is negative pattern, take remedial measure immediately to ensure that the actual performance fits into the standard of performance. Analyse the problem deeply and find ways to boost the performance. Identify how the corrective measures can be applied in the individual or group duties.

There could be a case where actual performance is much higher than the standard and such case implies that there is need for revising the standard. At times, plans may have to be redrawn or goals have to be modified. It may require a change in the assignment or clarification of duties or additional staff or even it may call for firing of an employee or executive coaching or mentoring for effective performance.


Steps Involved in Control Process

(i) Establishment of Standard:

Setting standard is the first requirement of control. Standards arise out of plans and provide the basis of comparison. There can be different types of standards e.g., number of units to be produced per hour, cost of production per unit, permissible quantity of scrap. As far as possible, the standards should be laid down in quantitative terms. A quantitative standard provides a concrete measure and helps in comparison. It is equally important that the standards fixed are realistic and attainable, neither too high nor very low.

(ii) Measurement of Performance:

When standards are established, the next step is to measure the performance at regular intervals. Measurement is not difficult in case of physical operations, e.g., units produced, cost incurred, time spent etc., as these can be easily measured. Performance can be measured by observations, inspection and reporting.

(iii) Comparison of Performance with Standards:

The next step in the control process is comparison of actual performance against the standards. In case the standards set are well defined and can be measured objectively, comparison becomes very simple.

Comparison of actual and standard performance may lead to three possible outcomes – actual performance may be – (a) equal to, (b) more than, (c) less than the standard. If actual performance is equal to the standard managers need not take any action but where deviations are noticed, corrective action becomes necessary.

(iv) Detecting the Reason for Deviation:

Before taking any corrective action, managers should try to ascertain the reasons for the occurrence of deviations. The fault may be those standards fixed were unattainable rather than the subordinate’s inefficiency. Again, the deviations might have been caused by the nature of instructions issued by the manager rather than due to the subordinate’s mistake. Hence, it is essential that the reasons, which caused the deviation, be ascertained to determine the appropriate corrective action.

(v) Taking Corrective Action:

Once the causes for deviations become known, the next step is to go in for a corrective action which may involve revision of standards, changing the methods of selection and training of worker or providing better motivation. Managers should concentrate only on major deviations.


Steps Involved in Control Process – Establishing Standards, Measuring Performance, Performance Appraisal and Correcting the Deviations

Basically the process of control involves three steps i.e.- (i) setting up standards (ii) performance appraisal and (iii) corrective measures. Management thinkers have also confirmed these steps. But some feel that step of performance appraisal should be separated. They recommend the step of “measuring of performance” before appraising it, though measuring of performance is, conceptually, part of performance appraisal, bringing number of steps to four.

1. Establishing Standards:

The first and basic step in control is establishment of standards of performance for ensuring that the performance is in accordance with the plans. Standards are expressions of goals of the enterprise or the department. They may be tangible or intangible, vague or specific. The manager should select some of such standards which may best reflect the goals of department and which will best show him whether or not these goals are being met. A manager has to answer some questions while establishing standards.

What type of standards are required? How to set the standards? Which strategic points be selected? etc. Whatever standards are established. They should be feasible, accurate, precise, acceptable, workable and flexible. They have to concentrate on results, and should be expressed in quantitative terms. They should be consistent with the organisational objectives. Production, sales and finance are some important areas where control is a must.

2. Measuring Performance:

The next important step in the control process is the evaluation of performance. Under this step actual performance is compared with the standard performance. The standards are varied and their measurements too are different. There are some tangible standards in terms of weight, colour, time, money etc. There is no difficulty in using these measurements. But there are some intangible standards, direct measurement of which is quite difficult.

For example measuring company’s good will, reputation, company’s status, creditability, name and fame company’s standing in market, employees’ morale, and attitude etc.

3. Performance Appraisal:

After comparing actual performance with standard performance, the evaluator should point out the deficiencies or deviations or difference in performance and find out the reasons responsible for these. Important deviations should be brought to the notice of the top management and must be communicated to the concerned employee too.

4. Correcting the Deviations (Suggesting Measures):

The last step in control process, after detecting the deviations, is a corrective action. A rightful corrective action can be taken only when the cause of deviations is clearly established. Minor deviations can be removed by supervisors and the major deviations can be corrected by the executives. Corrective actions are necessary to avoid the recurrence of unfavourable deviations in future. Effective control is possible through corrective actions.


Steps Involved in Control Process – Four Steps Involved in Building an Effective Control System

Like the four management functions, there are four steps involved in building an effective control system in any activity or department of an organization.

These steps are taken to set the required standards of performance, measure actual performance against set standards, compare the performance with set standards to identify deviations if any, and to initiate corrective measures to ensure that predetermined standards are achieved in future.

Step # i. Set Standards of Performance:

The core of control lies in setting up of standards against which the actual performance is to be measured; preferably in quantitative terms but could even be qualitative. The standards need to be simple, specific, practical, and achievable with allocated resources—time, money, and effort.

It is important to communicate to the concerned people about the importance of achieving the set standards in their work performance. These need to be stated in clear and unambiguous terms, so that people in the organization understand that their performance will be measured. Therefore, to the extent possible, standards should be measurable.

Step # ii. System and Processes to Measure Performance:

After setting standards, an organization needs to set the system and process to measure the actual performance. It is important to have accurate facts and figures to measure the deviations from set standards instead of having presumption and deductive reasoning of predetermined standards for achievements.

Evaluation becomes relatively simple when standards are set in quantitative terms, which are measurable, as against standards, which are of a qualitative nature.

Step # iii. Identifying Variations in Performance and Corrective Measures:

It is important to get timely reports in well-defined formats that can highlight budgets as compared to the actuals and also reflect the deviations. These reports should be communicated to the concerned people in writing, verbally, or through enterprise resource planning (ERP) systems.

Communication of these deviations, which are pertinent and adversely affect in achieving the organizational goals, is important. This step ought to help in identifying important corrective measures that can assist the organization in achieving its well set standards.

A team of personnel could help in identifying the critical factors that have led to variations which, if corrected, would go a long way towards achievement of standards. It is important that the variations are corrected by taking the most effective and efficient measures.

Step # iv. Taking Corrective Action:

Managers need to take corrective measures by duly implementing them and monitoring whether standards are being achieved or not. In case there are huge variations in the actual achieved status as compared to the set standards, management may need to reset the goals and standards, reassign roles and duties, and reallocate required resources.

It may even call for developing new skills, by inducting new people or through training and development of the existing set of people. If the standards are inaccurate, they should be changed.


Steps Involved in Control Process – Establishment of Standards, Checking and Reporting on Performance and Corrective Actions

1. Establishment of Standards:

Standards are fixed against which results can be measured. The actual performance of the business enterprise is judged against the target and objectives set. Such standards must be clear and meaningful and should be understood by the person concerned. It can be seen for many intangible items like the results to be expected from a training programme.

2. Checking and Reporting on Performance:

In this step, arrangements are made for the measurement of performance for the purposes of comparison with standards. As long as operations go on according to plans, there is no need to submit any report. Only when unexpected results occur, there is a need for reports and corrective action. In the absence of such reports, the managers would assume that all activities are proceeding as planned.

3. Corrective Actions:

The data collected through observations have to be analysed and reviewed. Immediate steps are taken for the corrections of deviations from standards.

Thus, a system of business control is used to isolate those faults which relate to the area in which a decision has to be made. The facts are processed, and presented to management. On the basis thus provided, one can then set objectives, shape plans and exercise control, in its simplest form by comparing performance with plans.

The general objectives are translated into departmental objectives with defined standards of output, quality and cost. At the appropriate times, action is taken to bring performance into line with the plan, perhaps also to modify the latter. The targets set have to be attainable and they have to be the right ones. Individuals must be made unambiguously responsible for stated activities.

Data must be collected and processed quickly enough for action to be taken. Thus with the help of control information it establishes data for future plans. The manager can study the past, note the pitfalls and avoid them in future with a view to preventing their recurrence.


Which basic function of management includes setting standards such as a sales quota and quality standards?

Setting standards such as sales quotas, quality standards, or production levels is part of the leading function of human resource management.

Which basic function of management includes setting standards?

Controlling involves ensuring that performance does not deviate from standards. Controlling consists of three steps, which include (1) establishing performance standards, (2) comparing actual performance against standards, and (3) taking corrective action when necessary.

Which function of the management process includes selecting employees setting performance standards and compensating employees?

planning C) motivating D) staffing Answer: D Explanation: D) The staffing function of the management process determines what type of people you should hire, recruiting prospective employees, selecting employees, training and developing employees, setting performance standards, evaluating performance, counseling ...

Which section of a job description usually includes the major functions or activities of the job?

Essential Functions This section (duties and responsibilities) should use action statements of key work activities to achieve the position objective.