Controlling is the continuous process of evaluating the actual performance against the standard performance of an individual, group or department. Controlling is a dynamic process and action or people-oriented.
Controlling process involves the following:
1. Setting performance standards: Standard refers to the target upon which the actual performance is measured. Different types of standards are used for measuring the performance of different individuals. Standards may be of two types, qualitative standard and quantitative standard. Performance standards are mainly derived from the objectives, goals, and expectations of the organization.
The standards for control should satisfy the following requirement:
- It should be simple and easily understandable
- It should be flexible, not rigid
- It should be in accordance with the people responsible to achieve them,
- It should be consistent with the overall objective of the firm.
2. Measurement of Actual performance: Once these standards are fixed for desired performance, the next step is to measure the actual performance. Measurement of performance should be clear, simple, rational, relevant, and understandable without complaints and misinterpretation.
3. Comparing the actual performance with standards: It involves two steps.
- Finding out the extent of deviations
- Identifying the causes of such deviations
While comparing the actual performance against the standards, the deviations are revealed. Once the deviations are noticed and causes for the same are determined, corrective measures are adopted.
4. Analyzing the deviations: Deviations mean variations from the standards. Every deviation is analyzed to find out why it has occurred and who is responsible for the same.
Deviations may be Negative, Positive or Zero,
- Negative Deviations: If actual performance is less than the standard, it leads to negative deviations.
- Zero Deviations: If actual performance is equal to the standard that leads to Zero deviations.
- Positive Deviations: If actual performance is more than the standard, it leads to Positive deviations.
5. Taking corrective actions: After finding what has gone wrong, where and why, management will initiate corrective action.
The remedial actions may involve:
- Review and revision of goals or standards,
- Change in the assignment of tasks
- Provisions for additional resources or new facilities
- mprovement in the selection and training of workers or reform in the technique of direction.
