To successfully manage organizational performance, you must understand that organizational improvement outcomes are focused on three main areas:
- Financial Performance: This area focuses on a company’s operations and policies regarding monetary terms. In other words, in terms of value in dollars, euros, pounds, and other currencies.
In order to see how good a company’s financial performance is, you need to check its return on assets and return on investment, but you can also evaluate financial performance by measuring value-added.
- Product Market Performance: Market performance measures how good a product or service does within the marketplace. It focuses on whether a product’s market share rises or if an upgrade helped boost sales, etc.
When referring specifically to a product instead of a whole organization, it’s referred to as ‘product-market performance’.
- Shareholder Value: This area looks at how much a company enriches its shareholders. Many say this is the ultimate organizational performance measure. Shareholder value may also refer to a company’s market capitalization.