What are some non-financial measures used to measure performance?

Outcome-based measures such as customer satisfaction, market share, category ownership, and new product adoption rate fall into the non-financial metrics.

What are examples of non-financial measures?

Examples Of Non-Financial KPIs

• Customer satisfaction.
• On-time delivery.
• Customer retention.
• New customer development.
• Internal process productivity.
• Product or service quality.
• Company and brand reputation.
• Employee training and development.

What are examples of non-financial performance controls?

Examples of Nonfinancial Performance Controls

• Human Resources. Employee satisfaction. Average tenure.
• Marketing. New products launched. Customer satisfaction.
• Production. Number of defects.
• Purchasing. New products introduced by suppliers.
• Research and Development. New patents.
• Customer Service. Average complaint response time.

What are the financial and non-financial measures of performance?

The primary focus of these measures are the revenues, profits and cash flows of the company. Whereas, non-financial performance measurement indicates deficiencies in those areas of business that can affect the long-term strategic success of an organization.

What are non-financial key performance indicators?

Non-financial KPIs, also referred to as the intellectual capital of an organisation, include the knowledge, skills, brands, corporate reputation, relationships, information and data, as well as patents, processes, trust or an innovative organisational culture.

What is non-financial performance in company?

In the simplest form, the non-financial performance measures give you the information on a company’s performance in non-monetary or non-money terms. Though one can’t express non-financial measures in money terms, these measures can be qualitative and quantitative.

What advantages do nonfinancial performance measures have?

The advantages of non-financial measures include alignment of strategy and identification of strategy improvements, visibility of efficiency and effectiveness, drivers behind financial measures, identification of cheating and thus improved focus on long term rather than short term goals.

What is meant by non-financial performance measure?

Why are non-financial performance measures important?

Because many non-financial measures are less susceptible to external noise than accounting measures, their use may improve managers’ performance by providing more precise evaluation of their actions. This also lowers the risk imposed on managers when determining pay.

Why should companies track non-financial performance measures?

Companies need to track non-financial performance measures because they: Help capture strengths and weaknesses. If you excel at customer service but have long wait times before a customer reaches a representative, that will show up in a non-financial KPI such as a feedback survey.

Why are both financial and non-financial measures necessary to manage a company’s strategy?

Financial performance measures indicate whether the​ company’s strategy and its implementation are increasing shareholder value. Firms monitor nonfinancial measures to understand whether they are building or destroying their capabilities for future growth and profitability.

What are non-financial performance measures?

What are non-financial performance measures? The easiest way to define non-financial performance measures is to explain what they aren’t. Non-financial KPIs are not expressed as monetary values—in other words, they aren’t directly associated with dollar signs.

What is the measurement gap in non-financial performance?

Similar disparities exist for non-financial measures related to employee performance, operational results, quality, alliances, supplier relations, innovation, community and the environment. More important, stock market and long-term accounting performance are both higher when these measurement gaps are smaller. Integrate Measures

How does management use non-financial measures to get an idea?

Thus, management uses non-financial measures to get an idea of future financial performance. Management also needs non-financial measures because it is easy to link them to the company’s strategy. Companies don’t have their vision or mission statement in money terms.

How many non-financial measures should a company track?

Most companies track hundreds, if not thousands, of non-financial measures in their day-to-day operations. To avoid “reinventing the wheel”, an inventory of current measures should be made.