Controlling Process: Establishing Controlling System

Controlling process is containing some of the essential steps. These are

1. Setting Performance Standards

2. Measurement of Actual Performance

3. Comparing Actual Performance with Standards

4. Analysing Deviations

5. Taking Corrective Action.

Controlling process

1. Setting Performance Standards

The first step in the process of controlling is concerned with setting performance standards. These standards are the basis for measuring the actual performance.

Thus, standards act as a lighthouse that warns & guides the ships at sea. Standards are the benchmarks towards which efforts of entire organisation are directed. These standards can be expressed both in quantitative and qualitative terms. Thus, four important factors are highlighted below against which the performance is measured are:

  • Quantity.
  • Quality.
  • Required Time.
  • Cost Incurred.

2. Measuring Performance

The second major step in controlling is to measure the performance. Finding out deviations becomes easy through measuring the actual performance. Performance levels are sometimes easy to measure and sometimes difficult. Measurement of tangible standards is easy as it can be expressed in units, cost, money terms, etc. Quantitative measurement becomes difficult when performance of manager has to be measured. Performance of a manager cannot be measured in quantities. It can be measured only by-

  1. Attitude of the workers,
  2. Their morale to work,
  3. The development in the attitudes regarding the physical environment, and
  4. Their communication with the superiors.

It is also sometimes done through various reports like weekly, monthly, quarterly, yearly reports.

3. Comparing Performance with the Standards

The third stage is a comparison of performance against the standard. This process involves assessment of performance by the manager. In some cases, small variations from the benchmark are tolerable while in a few cases, even minor variation can causes disaster. As per the management principle of exception, it is possible to have better control if the exceptions to the standard performance or deviations from the expected performance can be identified and determined. Therefore, it is important for the management to direct their attention towards handling the exceptions.

4. Taking Corrective Actions

The final stage of the controlling process is taking corrective actions when major variations are found in the outcomes. This stage ascertains adjustment of operations for achievement of the desired outcomes or continuing further if possible. If any major variation is found, the manager takes strong and immediate actions to deal with the challenges. The choice of the remedial measures relies on the nature of the issue. The remedial measures can be anything such as changes in the marketing strategy, introducing rules and principles, a new technique to inspect the manufactured items, or altering a process.