measurement of the performance of the business against the set standard
Control is the measurement of the performance of the business against the set standard. It mainly involves the use of five steps: (1) set objectives, (2) measure performance, (3) compare performance to standards, (4) determine the reasons for deviations and then (5) take corrective action as needed (Learning, 2013). The objectives set can either be in monetary terms profits and cost or in other units of production terms such as training time. Performance is then
measured through different ways depending on what is being measured. For example, employee
Performance is measured through periodic performance appraisal . Once the performance has been compared, deviations are noted, if they surpass the acceptable range of variation, then action needs to be taken. Taking corrective action can involve: doing nothing, correcting the actual performance, or choosing to revise the set standards. Application of effective control measures bear a cost to the organization such as: Financial , Poorly implemented controls and
Responsiveness costs. Financial costs emerge when the organization sets aside a team to conduct the internal audit. Poorly implemented controls is a cost that emerges as a result failure to fully implement new controls. Responsiveness costs are due to the time taken between making decisions and the corrective actions needed to be applied. The benefits of control outweigh the cost it takes. The main benefit being that it ensures an organization maintains the standard of quality while reducing inefficiencies in the system.