ACCA P3 考試：PERFORMANCE INDICATORS 1

Both P3, Business Analysis, and P5, Advanced Performance Management, require candidates to be able to establish key performance indicators and critical success factors. For example, Question 1 of December 2011 P3 and Question 1 of December 2013 P5.

A surprising number of students do not feel comfortable with these terms, and this article is aimed at explaining and illustrating these concepts. In particular it will explain what is meant by：

·Performance

·Objectives

·Critical success factors

·Performance indicators

·Key performance indicators

PERFORMANCE

This can be defined as：

'A task or operation seen in terms of how successfully it is performed' （www.Oxforddictionaries.com）。

Organisations differ greatly in which aspects of their behaviour and results constitute good performance. For example their aim could be to make profits, to increase the share price, to cure patients in a hospital, or to clear household rubbish. The concept of 'performance' is very relevant to both P3 and P5. P3 looks at how organisations can make decisions that improve their strategic performance and, of course, P5 is called 'Advanced Performance Management' and is focused on how organisations evaluate their performance.

The primary required tasks are often found in the organisation's mission statement as it is there that the organisation's purpose should be defined. These are called 'primary required tasks' because although the primary task of a profit-seeking business is to make profits, this rests on other subsidiary tasks such as good design, low cost per unit, quality, flexibility, successful marketing and so on. Many of these are non-financial achievements.

Some aspects of performance are 'nice to have' but others will be critical success factors. For example, the standard of an airline's meals and entertainment systems will rank after punctuality, reliability and safety, all of which are likely to be critical to the airline's success.

OBJECTIVES

Objectives are simply targets that an organisation sets out to achieve. They are elements of the mission that have been quantified and are the basis for deciding appropriate performance measures and indicators. There is little point measuring something if you do not know whether the result is satisfactory and cannot decide if performance needs to change. Organisations will create a hierarchy of objectives which will include corporate objectives which affect the organisation as a whole and unit objectives which will affect individual business units within the organisation. Even here objectives will be categorised as primary and secondary, for example an organisation might set itself a primary objective of growth in profits but will then need to develop strategies to ensure this primary objective is achieved. This is where secondary objectives are needed, for example to improve product quality or to make more efficient use of resources.