Performance metrics of an organisation is related to several factors. Hence it has certain challenges that put major impact on the organisational performance. According to Sharawi  (2014), organisations often face certain challenges while applying performance metrics.

Reduction in output level

A major challenge of implementation of performance metrics is related to the employee motivation. Performance metrics determine the standards of the employee performance. While the experienced employee could find it unfair to judge their contribution and loyalty through the scale of performance, new employees could find it tough to achieve the standard of the performance with their limited skill and experience, hence both levels of employees are de-motivated by it and as a result the production rate and quality reduce.

Difficulty in communication:

While natural attributes suggests the employees to communicate while facing a challenge in the workplace, performance metrics determine that they should proceed on their comprehension of responsibilities. Hence, the job could strike in certain case of challenge.

Lack of commitment:

Performance metrics determines that the employees should perform according to the determined standard of the performance. Employee valuation depends on their performance. Hence, they could feel it monotonous. This raises the possibility of lack of commitment and loyalty among the employees.

Consider subjectivity:

Performance metrics is such a system that provides important data related to the organizational as well as individual performance. This system is depended on the operator to provide data. Hence, data could be easily manipulated and even taken based on emotion. Thus, the validity of the provided data is not yet above level of question.

Recommendation for successful application of performance metrics

Though performance management provides certain advantages in the context of measurement of organisational success in food and beverage industry, it is also subjected to certain challenges. In order to imply performance management in proper way, it is important to mitigate those challenges. Some of mitigating steps are addressed here.

Clear concept

In various cases a wrong messages has been conveyed to the employees of the organisation regarding the concept of performance metrics. Lack of transparency about the concept creates such challenges. In order to apply performance metrics in a successful way, it is important to define the concept clearly to the employees of the organisation. Only then, it could get proper support to help the success of the organisation.


Determine the goals of the process:   

In order to achieve the success through performance management it is important to determine priority of the process. This approach could provide certain advantages in various sectors. Some of them are even contradictory. For example, it may present additional expenses as certain challenges and suggest reducing that. As a result, the business process could be affected. Hence before apply performance management it is important for the organisation to determine the objectives of the system.

Aligned goals:

Instead of determine high level of standards it is important to determine the standards of the performance according to the organisational goals. High level of performance could design the performance standard as very high but may be unreachable for the employees. Hence, the employees will be de-motivated because of the continuous failure to achieve the level. In order to mitigate that challenge it is important to determine the standards according to the organisational goals.


This study concerns about the role of performance metrics in the success of the food and beverage company. This has presented a vivid description about performance metrics. It also presents the role of the managers while implementing performance metrics in the organisation. There are certain performance metrics that are applied by various organisations in order to achieve a sustainable success in the business; those are described in the study. These include COGS, breakeven point, prime cost, overhead rate and others. Application of performance metrics has certain advantages, which are described in depth in the study. Application of performance metrics is subjected to certain challenges. This report has put lights on those challenges and discussed their impacts on organisation’s success. In order to apply performance management successfully in the organisation, it is important to mitigate those challenges. This study also presents some mitigating steps in the context of such challenges. It can be conclude that the application of performance management has certain advantages and challenges and mitigating these challenges could make perfect to determine the success of the business.



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