Employee Retention in Multinational Companies

Document Sample
Employee Retention in Multinational Companies Powered By Docstoc
					Performance Measurement
Performance measures recently introduced
or being considered for introduction
                 Balanced Scorecard Approach

                 Economic Value Added (EVA®)

                 Value Drivers

                 Shareholders Value Analysis (SVA)

                 Economic profit

                 Cashflow return on investment

                 Target cashflow

                 Return on capital employed (ROCE)

                 Target profit


                                                     2
Use of Divisional Performance Measures in UK
companies (source: Francis And Minchington, 2000)

                                     Being       Not being   Not aware
                                   considered   considered       of
                            Used
   Ability to stay within   99        1%           0%           0%
   budget

   Target profit            94%       3%           2%           1%

   Return on capital        71%       6%           18%          5%
   employed (ROCE)
   Target cash flow         70%       7%           17%          6%

   Value Drivers            28%       18%          35%         19%

   Balanced Scorecard       24%       21%          29%         26%
   Approach

   Shareholders Value       15%       13%          53%         19%
   Analysis (SVA)

   Economic Value Added     10%       18%          46%         26%
   (EVA®)
   Residual Income (RI)     6%        2%           56%         36%       3
Financial and non-financial measures
commonly used in assessing performance
WORKING CAPITAL              GENERAL PRODUCTION                   DEMAND
Cashflow                     Capital utilization                  Market share
Creditor days                Inventory                            Orders on hand
Debtor days

CAPITAL MARKET               PROCESS                              PRODUCT
Asset value per share        Manufacturing lead time              Price (both low-price and low-cost
Dividend cover               per cent rework and reject           supplier)
Dividend per share           per cent yield on production         Product quality
Earnings per share           Schedule adherence                    Returns
                                                                   Incidence of defects (PPM)
Price/earnings ratio         Set-up time                           Warranty claims
                                                                   Field service requests
(FINANCIAL) RETURN           LABOUR                               CUSTOMER
Capital turnover             Direct labor productivity            Customer Acquisition
Working capital turnover     Indirect labor productivity          Satisfaction
Profit to turnover           Employee turnover                    Complaints
Return on capital employed   Employee satisfaction                Repeat orders
Profit                        Involvement with decisions          Retention & loyalty
Total shareholder returns     Recognition for doing good job      On-time delivery (OTD)
Profit per employee           Support level from staff fnctions   Account share
                              Encouragement to be creative
Economic value added                                              Profitability
Sales per employee           Employee retention
LENDER SECURITY              SUPPLIERS                            INNOVATIVENESS
Gearing                      Number of suppliers                  New product frequency
Interest cover               Supplier lead time                   New product time to market

                                                                                                  4
Financial control
 Financial control involves the use of
  financial measures to asses organization
  and management performance
 Variance analysis is the oldest and most
  widely used forms of financial control
 Financial indicators used for asses
  performance depend on the type of
  responsibility center


                                             5
Responsibility centers and financial
indicators
 Using segment margin reports
 Transfer pricing
       International transfer pricing
       Domestic transfer pricing
 Return on investment
 Using Residual Income
 Using economic value added (EVA®)




                                         6

				
DOCUMENT INFO
Shared By:
Categories:
Tags:
Stats:
views:80
posted:1/31/2011
language:English
pages:6
Description: Employee Retention in Multinational Companies document sample