Designing a leaf based performance metric model for organizational effectiveness pmmoe with special reference to small and medium enterprises smes

Abstract

Organizations are always in the move to improve their performance to stay in business for a longer period. Measuring performance has been one of the prominent activities in all type of business. Hence, organizations predominantly engage in tracking the performance against goals and also in identifying areas where improvement is needed. It is seen in the literature that systematic performance measurement models (Hudson, Lean, Smart, 2001) were implemented only in large companies. And later those measurements were tried in small and medium enterprises also. During early 90 s, SMEs mainly implemented financial performance measures used in large companies such as ROI, ROE, ROCE and their derivatives. But the operations carried out in large industries and SMEs are not the same. So this forms a major problem to those SMEs, as there is no specific performance measurement model available for them. Therefore, an effort has been made in this study to design a performance metric model specifically for SMEs. The model which, if designed is specific to their nature of operations will help them to monitor the performance of various factors leading to achieving organizational effectiveness and to meet out the competition in the global market. SMEs form the largest employment generator sector in India, which is next to agriculture sector. It earns the significant share in exports revenue of 40% of the total exports of the country. Extensive workforce i.e. about 106 million (40%) of India s total workforce is involved in these SMEs for production and operational activities. An effective performance measurement model if available would be very much useful for this segment to keep track of their activities and move towards organizational effectiveness. Pump Industry was selected for the study because of its high importance and benefits to the growth of the country. Indian Pump industry is mounting at a compound annual growth rate of about 10 percentage and shares more than 20 percent of the largest net assets of the mechanical industry. In addition, the Indian Pumps domestic market is rising at a healthy annual rate of 16 to 18 percentages. newline