Controlling Process
1. Setting Performance Standards: Standards are the criteria against which actual performance would be measured. Thus standards become basis for comparison and the manager insists on following of standards. Standards can be set in both quantitative as well as qualitative terms. Is is important that standards should be flexible enough to be modified
whenever required. Please note that standards should be attainable and time bound.
2. Measurement of Actual Performance: Performance should be measured in an objective and reliable manner which includes personal observation, sample checking. Performance should be measured in same terms in which standards have been established, this will facilitate comparison.
3. Comparing Actual Performance with Standard: This step involves comparison of actual performance with the standard. Such comparison will reveal the deviation between actual and desired performance. If the performance matches the standards it may be assumed that everything is under control.
4. Analysing Deviations: The deviations from the standards are assessed and analysed to identify the causes of deviations. Deviations are analysed in the light of pre-determined deviation tolerance limit and key result areas.
a) Critical point control (CPC): It is neither economical nor easy to have a check on all the activities of an organisation. Hence, the manager should pay more attention on those activities which are important and critical to the success of an organisation. These are known as Key Result Areas- KRA’s.
b) Management by Exception (MBE): A manager should take corrective action when there is exceptional deviation i.e. when they cross the permissible limit or acceptable range. Deviations within acceptable range are ignored.
5. Taking Corrective Action: The final step in the controlling process is taking corrective action. No corrective action is required when the deviations are within the acceptable limits. But where significant deviations occur corrective action is taken.
