A controlling process is a management function that comprises different steps in order to measure performance.
Steps of the Controlling Process
- Establishing standards and methods for measuring performance.
- the first stage means creating standards which are the starting point of the process;
- the better these standards are worded and translated into measurable objectives, the easier it will be for them to act as ‘red flags’ and signal drastic changes during the process;
- in an industrial business, they can comprise production and sales targets, work goals, safety records etc.
- in services, standards may include other benchmarks such as the number of times clients used a product recommended by the company or took advantage of a marketing strategy.
- Measuring the performance.
- The deviation in measuring performance should be minor if standards are well put in place and appropriate means of assessment exist or are set up.
- If these conditions are met, then it should be fairly easy to predict and measure the performance at least for short and medium term.
- However, in some activities, even if appropriate standards are found, there is an error given by the human element which cannot be totally anticipated (e.g. the productivity of a new office manager in an existing team).
- When the standards had in mind are also subjective, it gives rise to incorrect assessments and the performance measurement cannot be counted upon.
- Determining whether the performance matches the standard.
- As a consequence of the previous stage, it draws a comparative analysis between the standards set up in the beginning as performance indicators and the results.
- If the manager concludes that there is a match, then the results are positive and the process may continue. However, if the indicators have failed, then re-assessment is needed and one arrives at the fourth stage.
- Taking corrective action.
- Once there is reason to believe standards have failed, corrective action is taken which may result in different changes to the activities of the business.
- This exercise of control may conclude that the original indicators are inappropriate in which case the corrective action will consist of changing the standards rather than a change in performance.
Unless a manager supervises the process to its conclusion, they are not considered to be exercising control, but simply monitoring performance. In order to distinguish between the two, the focus should be on the design of strategies to overcome low performance rates rather than just identifying the failing standards.