The effective financial approach to PNA and TNA.
(Do not waste money on the irrelevant subjective opinion survey)
By Arriffin Mansor
(Do not waste money on the irrelevant subjective opinion survey)
By Arriffin Mansor
1.
Performance need analysis of a company is
being conducted to identify a company’s performance problems and issues. With this information, the management could
introduce management and strategic changes so that the company could produce the desired optimum
results.
2.
The main source of data would be the audited
financial statements of the company.
It is objective, verified, available and comparable.
3.
For the purpose of meaningful comparison, these data are converted into relevant
key performance ratios.
4.
The company could also chose and design the appropriate strategies
that could sustain and win the company in the ever challenging business environment.
5.
The focus of the study is to identify the strengths
and weaknesses of the company. The
strengths are the management function that shows consistent positive performance as
compared to an equivalent company in the same industry. On the contrary, the weaknesses are the
negative performance areas.
6.
The comparative performance study between
the company and another which is known as benchmarked company are also known as
gap analysis.
7.
If the gap of an area is found to have a
significant impact on the outcome of the company, that gap is called the critical
performance gaps.
8.
The critical items are identified through Pareto
or sensitivity analysis. ROE and ROA models are being simulated to test its sensitivity.
9.
Further study could be conducted on the critical
gaps to identify the root cause of the performance problems and issues.
10.
This could be obtained by breaking down the performance
ratio into component ratios which should highlight the source problem.
11.
Performance problems may not be caused or
contributed solely by the job holders.
Other factors such as lack of authority, information and technology
could be the main contributory factor.
12.
The analyst could now zoom to the individuals or
team who are now identified as the critical non-performers.
13.
When competency profiling is conducted on the
non-performers, and subsequently compared to best practices as found in the industry, competency gaps are identified for the purpose of
training.
14.
As usual and due to time constraint, management
priority and focus should be given to the critical areas.
15.
Thus, the PNA could be completed in a fast 15
days which should benefit all CEOs and his or her management team for their
respective purposes.
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