Management accounting- R-11 Assignment Example | Topics and Well Written Essays - 5000 words

Management accounting- R-11 - Assignment Example Private organisations tend to have smoother management control process whereas public organisations experience more turbulence, conflicts and interruptions. Many scholars attribute these differences to the roles and purpose of private and public organisations in the society. Private organisations produce and sell products to consumers in the markets with objective of creating shareholders’ wealth. On the other hand, public organisations, such as state health centers and public schools undertake their operations for public interests. The distinct roles mean that there are diverse kinds of expectations and accountability that may can call for distinctive management control and decision-making processes (Ring & Perry. 1985). The problem of exercising management control in private sector versus public sector The contextual influence in the exercise of management control arises from the role of an organisation in the society. Whereas private organisations are means for creating sha reholders’ wealth, public organisations are instruments of public policy. The functions of each sector dictate the governance and leadership arrangements that are necessary to exercise management control for different diverse types of owners and shareholders. The approach to governance adopted in each sector subject general managers in each sector to different demands and expectations, which have far-reaching impact on exercise of management control. The role of each sector dictate ways of dealing with clients and users of services or goods offered in different ways, and this may also influence how management control is exercised. Public organisations are constrained in ways that limit how they exercise their management control and strategic choices being made. In most cases, discussions of how management control should be pursued in public organisations are subject to public disclosure. The government passes legislative mandates which tend t affect budgets and budgeting proc ess in a public organisation. As cited by Ring and Perry (1985), managers or leaders of public organisations are required to conform to budgets and legislative mandates passed by the state. As such, this is likely to limit the amount of money available for research on how to exercise management effectively. These mandates may even limit managers of public corporations from spending money on data collection and research thus influencing decision making process negatively. Management team of most public corporations must report to oversight committees, whose occupants are often political appointees, who are prone to leaking organisation’s undertakings and progress. This influences planning and management process in a negative way. These influences make management control problematic in public corporations than in for-profit organisations (Nutt, 2005). The external environment influences any organisation. Some of the attributes of external environment include cooperation, compet ition, political influence, cooperation and data availability. Private organisations can assess market situations through consumer buying behavior thereby enabling them to effectively manage their actions. Public organisations lack markets which can be source of revenue. As such, they depend on funds from oversight bodies that have tendency of setting reimbursement rules for the products or services offered by a public organisa

Performance appraisal system and performance management system Essay

Performance appraisal system and performance management system - Essay Example Performance management systems refer to measures that the organization has put in place with the aim of establishing what employees ought to do in a certain period. For example, it can constitute measures on how the employee should perform in the next quarter of a year, the next sixth months, or the next one year. A performance management system outlines what should be met within a certain time frame, as well as the benefits that accrue to employees when they meet these objectives (Grote 1996, p.17). Differences between performance Appraisal System and Performance Management System There are certain differences, which exist between performance appraisal systems and performance management systems. These differences represent the most fundamental components of the two approaches, as well as how the two approaches differ in terms of what they address. The major differences between performance appraisal and performance management systems lies in the scope of what they aim to cover. While performance management systems represent a traditional approach to the management of human resources, performance management can be termed as a contemporary approach to the management of human resources (Rao 2004, p. 213). ... 333). During performance appraisal, the principal activities that the human resource department engages in include evaluating employees, as well as rating their performance. On the contrary, performance management aims at the review, analysis, and planning of the expected performance of employees, and how an employee should make improvements (Deb 2006, p.201). While performance management can be regarded as a continuous process within the organisation, performance appraisal takes place in an annual basis. In performance management, there may be reviews that take place quarterly while, in performance appraisal, the review of the employee takes place once a year. However, there may be periodic ratings of employees in the course of the year (Rao 2004, p.214). Performance appraisal is a function entirely performed by the human resource department of the organisation. This means that the human resource department has the responsibility to design, evaluates, as well as monitor the implemen tation of the performance appraisal system (Roberts 2003, p.89). On the contrary, the performance management system can be designed by the human resource department, but the implementation of the system can be done by the various departments. In performance appraisal systems, there are reviews that may be conducted to ensure that the ratings of employees enhance objectivity. In performance management systems, the reviews serve the purpose of ensuring that the organization improves its performance (Waal & Counet, 2009). In performance appraisal, the need for making development is identified when the year ends. During performance management, the need for development can easily be