Performance Measures



Businesses use performance measurements to make strategic decisions about how the company should conduct business and to develop plans and budgets to help the company achieve its goals. Most businesses have a plan at the beginning of their year regarding how much they expect to spend on materials and labor. This expectation is guided by how much product they expect to produce and sell, which will generate an expected level of revenue and—ultimately—profit. An organization has to have a method and process for evaluation, throughout the year and at the end of the year, to see whether it met its targets in each area—and if not, why not.

At A Glance