Private Sector Organizations operate with an ultimate aim to generate profits. These organizations are responsible for their operations directly to the shareholders and the customer segment they serve. As compared to public sector organizations the priority areas of private sector are quite different. KPIs can be utilized in private sector organizations for prioritizing and effectively managing critical areas. KPIs for Private Sector Organizations can be classified under four major perspectives- financial perspective, customer perspective, internal processes perspective and employee perspective.Financial Perspective takes into account KPIs in the form of % increase in annual profits, % decrease in operational expenses, % increase in sales revenue and % repeat business.Customer Perspective helps in judging the perception of customer through KPIs such as % increase in positive customer feedback, full and on time deliveries, error resolution time and customer focused initiatives taken.Internal Processes Perspective talks about KPIs like % increase in output rates, number of production schedules met, % decrease in lost time from injuries, quality measures and % reduction in lead times.Employee Perspective helps in judging the human resource aspect of a private sector organization. It includes KPIs such as % reduction in absenteeism level, average number of learning days per employee, training sessions and employee training ratio.
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Private sector is that fraction of a nation's economy that is run by owners for earning profits and is not controlled by government. The operators of such businesses are answerable to their shareholders, who in turn provide the funds 'to keep the show running'.
Also, customers have a greater 'say' and 'position' in the operation of companies belonging to the economy's private section. Moving ahead, employees too are seen as 'more involved' in private sector organizations as compared to some other organizations.
Stating it all in one go, the management of companies from Private Sector are supposed to do justice to all these sections of people.
Owing to their responsibility to answer their stakeholders, a 'performance measurement and management tool' is needed to bring transparency in their operations. In this direction, BSC (Balanced Scorecard) takes care of all their demands, in a 'well enough' manner. This device depends on the metrics that are identified carefully after a detailed study of the concerned industry. Also, these indicators called KPIs (Key Performance Indicators) are flanked by suitable values. Future attempts revolve around making sure that the numbers remain within the prescribed intervals.
This is the actual scorecard with Private Sector Performance Indicators and performance indicators. The performance indicators include: financial perspective, % increase in annual profits, % decrease in operational expenses, % increase in sales revenue, % repeat business, customer perspective, % increase in positive customer feedback, full and on time deliveries, error resolution time, customer focused initiatives taken, internal processes perspective, % improvement in output rates, number of production schedules met, % decrease in lost time from injuries, quality measures, % reduction in lead times, employee perspective, % reduction in absenteeism level, average number of learning days per employee, training sessions, employees training ratio.
Download a trial version of Private Sector Estimation Balanced Scorecard or purchase a full version online.
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