3.1 Assess Progress of Operational Plan in Achieving Profit and Productivity Plans and Targets

Lesson Progress

3.1 Assess Progress of Operational Plan in Achieving Profit and Productivity Plans and Targets

Earlier in the process, you established relevant objectives and criteria for acceptable performance. Your operational plan is concerned above achieving these goals and objectives. In assessing if these are met, you must begin a review of the system you have, and from this review determine the system’s effectiveness and whether any improvements need to be made. In doing so, it is essential to have a fundamental understanding of profit, productivity plans and targets. These three would indicate your relative success and progress towards attaining your goals.

Profit is the figure that represents the amount of earnings that exceed your expenses at a given period. In essence, this is equivalent to your net income. To calculate it, you must simply subtract all the expenses you’ve had from your gross income.

On the other hand, productivity plan is a type of plan specifically designed to improve productivity levels. Within an organisation, the strategic plan and the operational plan are recognised as elements that make up this productivity plan.

Finally, targets are feasible, small-scale goals that are aligned with larger-scale and long-term goals and objectives of your organisation. Success in reaching targets is what drives success in your business. Examples of targets would include weekly and/or monthly sales quotas and quarterly budget targets.

All three concepts are related and play a key role in your operational plan. Targets are your starting point; they are the objectives you attempt to work towards. Productivity is process-based; it serves as an indicator of how effectively your resources are being used in order to achieve your set objectives. Lastly, profit is output-based; they represent the financial aspect of your objectives which indicates how much you have earned at any given time period.