What is the process of measuring performance and taking corrective action to assure that the activity is carried out as planned?

Definition: Control is a primary goal-oriented function of management in an organisation. It is a process of comparing the actual performance with the set standards of the company to ensure that activities are performed according to the plans and if not then taking corrective action.

Every manager needs to monitor and evaluate the activities of his subordinates. It helps in taking corrective actions by the manager in the given timeline to avoid contingency or company’s loss.

Controlling is performed at the lower, middle and upper levels of the management.

Features of Controlling

• An effective control system has the following features:
• It helps in achieving organizational goals.
• Facilitates optimum utilization of resources.
• It evaluates the accuracy of the standard.
• It also sets discipline and order.
• Motivates the employees and boosts employee morale.
• Ensures future planning by revising standards.
• Improves overall performance of an organization.
• It also minimises errors.

Controlling and planning are interrelated for controlling gives an important input into the next planning cycle. Controlling is a backwards-looking function which brings the management cycle back to the planning function. Planning is a forward-looking process as it deals with the forecasts about the future conditions.

Control process involves the following steps as shown in the figure:

• Establishing standards: This means setting up of the target which needs to be achieved to meet organisational goals eventually. Standards indicate the criteria of performance.

  Control standards are categorized as quantitative and qualitative standards. Quantitative standards are expressed in terms of money. Qualitative standards, on the other hand, includes intangible items.

• Measurement of actual performance: The actual performance of the employee is measured against the target. With the increasing levels of management, the measurement of performance becomes difficult.
• Comparison of actual performance with the standard: This compares the degree of difference between the actual performance and the standard.
• Taking corrective actions: It is initiated by the manager who corrects any defects in actual performance.

Controlling process thus regulates companies’ activities so that actual performance conforms to the standard plan. An effective control system enables managers to avoid circumstances which cause the company’s loss.

Types of control

There are three types of control viz.,

1. Feedback Control: This process involves collecting information about a finished task, assessing that information and improvising the same type of tasks in the future.
2. Concurrent control: It is also called real-time control. It checks any problem and examines it to take action before any loss is incurred. Example: control chart.
3. Predictive/ feedforward control: This type of control helps to foresee problem ahead of occurrence. Therefore action can be taken before such a circumstance arises.

In an ever-changing and complex environment, controlling forms an integral part of the organization.

Advantages of controlling

• Saves time and energy
• Allows managers to concentrate on important tasks. This allows better utilization of the managerial resource.
• Helps in timely corrective action to be taken by the manager.
• Managers can delegate tasks so routinely chores can be completed by subordinates.

On the contrary, controlling suffers from the constraint that the organization has no control over external factors. It can turn out to be a costly affair, especially for small companies.

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The “Controlling Process” is a method that can be used to make sure standards are being met within an organization. It involves the careful collection of information about a system, process, person, or group of people in order to make necessary decisions about each.  The process typically has between 4 and 5 steps see an example below.

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Definition: “Controlling” assures that the right things are done in the right manner at the right time. By controlling, a Program Manager checks the progress and compares it to what was planned. If the planned events are not the same, then corrective actions can be taken.

Controlling Process Steps

A five (5) step controlling process example is detailed below.

• Step 1: Establish Clear Standards: Standards are the plans or the targets which have to be achieved in the course of business function. They can also be called the criteria for judging performance. Standards generally are classified into two:
  • Measurable or tangible: Those standards which can be measured and expressed are called measurable standards. They can be in form of cost, output, expenditure, time, profit, etc.
  • Non-measurable or intangible: There are standards that cannot be measured monetarily. For example- performance of a manager, deviation of workers, their attitudes towards a concern. These are called intangible standards.
  • Controlling becomes easy through the establishment of these standards because controlling is exercised on the basis of these standards.
• Step 2: Monitor and Record 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 the performance of a manager has to be measured. The performance of a manager cannot be measured in quantities. It can be measured only by:
  • The attitude of the workers,
  • Their morale to work,
  • The development in the attitudes regarding the physical environment, and
  • Their communication with the superiors.
• Step 3: Comparison Results Against Standards: Comparison of actual performance with the planned targets are very important. The deviation can be defined as the gap between actual performance and the planned targets. The manager has to find out two things here- the extent of deviation and cause of deviation. The extent of deviation means that the manager has to find out whether the deviation is positive or negative or whether the actual performance is in conformity with the planned performance. Once the deviation is identified, a manager has to think about various causes which have led to a deviation. The causes can be:
  • Erroneous planning,
  • Co-ordination loosens,
  • Implementation of plans is defective, and
  • Supervision and communication are ineffective, etc.
• Step 4: Communicate Results: Once the results have been determined, all stakeholder needs to be notified and keep up to date.
• Step 5: If needed, Take Corrective Action: Once the causes and extent of deviations are known, the manager has to detect those errors and take remedial measures for them. There are two alternatives here:
  • Taking corrective measures for deviations that have occurred; and
  • After taking the corrective measures, if the actual performance is not in conformity with plans, the manager can revise the targets. It is here the controlling process comes to an end. Follow-up is an important step because it is only through taking corrective measures, a manager can exercise control.

AcqLinks and References:

• [1] Nickels and McHugh, “Understanding Business” McGraw-Hill Irwin 2010

Updated: 6/25/2021

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