This process is explained more fully in the article Understanding why Information Creates Productivity Losses . The expectation is the the productivity cost will be more than compensated by an increase in productivity over time. The additional payback increment will be used to offset the productivity loss. Using this method, it is possible to establish a conservative productivity benchmark for an organization. Effective knowledge management techniques maximize the benefits that flow from the IKR Process.
Share prices increase when a company grows.
One of the fastest ways to build growth into a business is to measure, control and manage the firm's relative performance . A firm's relative performance is simply the firm's revenue divided by the number of employees. The notion of managing relative performance is not new, in fact most senior executives have been managing short-term relative performance by simply making staff redundant through downsizing, restructuring and reengineering. Over time, this practice is decreasing in popularity as executives understand that they are actually creating a shortage of skill and capacity within their business. To understand how importance of relative performance consider the farmer example.