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So, now, one concept that you should be introduced to is KPIs, Key
Performance Indicators. Large firms are often complex institutions with
several departments. Each department is likely to have its own set of
aims and objectives and these separate aim and objectives are set by
the head of the company and they are called KPIs. Now, setting the KPIs
is a tricky task because you have to strike a balance between the person's
personal objectives or the manager's ability and the overall aims of
the company which is the owner's utility. So, in many firms numbers
like production, sales, profits, stock prices and so on, these are
used as measurements and managers spend a ridiculous amount of time
trying to adjust these from years to years and sometimes their targets
conflict. Now, think if a department's targets conflict with another
department's, let's say, saving electricity from the admin department
or working overtime and hence turning on the air conditioner for a longer
time in the operations department, whose target goes first? It simply
depends on the political clout of the individual managers and the
bargaining process that goes on from then on.