The control process involves carefully gathering information about a system, process, person, or group of people to make the necessary decisions about each. The control process of management ensures that every activity in a business is pursuing its goals. This process basically helps managers to evaluate the performance of their organization. Using this effectively, they can decide whether to change their plans or continue with them as they are. The managers set up a control system consisting of five major stages:
Establish standards to measure performance: Standards are plans or goals that have to be achieved during business work. They can also be called the criterion for measuring performance. It is very important for managers to communicate the goals, standards, and objectives of their organization as clearly as possible. There should never be ambiguity among employees in this regard. If everyone works towards common goals, then an organization can flourish.
Standards are generally classified into two types-
1. Measurable or Tangible: Standards that can be measured and expressed are called measurable standards. They can be in the form of time, cost, expenditure, output, and profit, etc.
2. Non-measurable or intangible: There are standards that cannot be measured monetarily. For example- a manager’s performance, workers’ distractions, their attitude to a concern. These are called abstract standards.
Measuring Actual Performance: Once managers know what their goals are, the next step is to measure and compare their actual performance. Various measuring techniques are sample testing, performance reports, personal observation, etc. However, to facilitate easy comparison, performance based on standards should be measured on the same basis. For example, if sales growth is a goal, the organization must have a means of collecting and reporting sales data.
Comparison of actual and standard performance: Comparison of actual performance with planned targets is very important. Deviations can be defined as the difference between actual performance and planned targets. The manager has to find two things here-
1. Deviation and
2. Reason for deviation
The degree of deviation implies that the manager has to find out whether the deviation is negative or positive or actual performance is consistent with planned performance. Managers must exercise control by exception. He has to detect deviations that are critical and important for the business. Minor deviations have to be ignored. Major deviations such as replacement of machinery, hiring of workers, quality of raw materials, rate of profit, etc. should be consciously observed.
Taking Corrective Action: When performance deviates from standards, managers need to take corrective action immediately. Timely corrective action can reduce the damage as well as prevent it from recurring in the future. If the deviation is within an acceptable range, no corrective measures are required. However, if deviations exceed the allowable limits, they should be brought to the attention of management to take corrective measures immediately, especially in critical areas.
There are two options for taking corrective action:-
1. Taking corrective measures for deviations that have occurred and
2. After taking corrective measures, the manager can modify the goals, if the actual performance is not in line with the plans. It is here that the control process ends. Follow-up is an important step because it is only through taking corrective measures a manager can control.
Follow Corrective Action: Merely taking corrective measures is not enough; Managers should also lead them to their logical conclusion. Even this step requires thorough evaluation and comparison. Managers should stick to the problem until they solve it. If they refer it to a subordinate, they should stick around and see that it accomplishes the task. They can also refer to him personally so that later he will be able to solve such problems by himself.