Wednesday, December 31, 2008

Reporting NonFinancials aspect of Business Value - Key Performance Indicators for Competitive Value, Management Value, Human Resources Value

Competitive Value—Brands, Customers and Markets

Key Performance Indicators:
Brand portfolio Turnover of key brands for last three years
Market share Market shares of key brands (%) in major regions
Competitor overview Major competitor brands and market shares
Investment volume Investment in individual brands for last financial year + investment plan for next three years
Brand perception Market research ratings of key brands during last financial year
Brand ranking Valuations of corporate brand by independent agencies for last three years (Interbrand/Landor/Core Brand, etc.)

Key Performance Indicators:
Customer base Number of customers drilled down to region and to type (individuals, small businesses, etc.)
Sales breakdown % of sales attributed to different customer groups over last three years
Customer satisfaction Index based on results of surveys of last three years and related to market average
Complaint track record Number of complaints launched in last three years and time frame for resolution of complaints
Employee commitment % of salary pegged to customer satisfaction, positive/negative trends of last three years
Cross-selling rate Number and breakdown of products per customer for last three years

Key Performance Indicators:
Market size Size of the market(s) covered by company products for last three years
Market position Market share in % for last three years, classified according to product/service and region
Growth rate Rise/fall in turnover and net profit for individual products/services
Marketing investment Investment classified according to product and region and according to advertising/direct mail, etc.
Return on investment Margins of various products and breakdown of net income

Management Value—Strategy, Governance and Outlook

Key Performance Indicators:
Growth Growth rate of the last three years (turnover and net income)
Profitability Earnings per share/return on investment for last three years
Innovation rate % of new products/services developed in the last three years
Internationality % of non-domestic business, classified regions in
Efficiency Cost/income ratio

Key Performance Indicators:
Management control List of committee meetings with documentation of attendance by Board members and major decisions taken
Remuneration Breakdown of salary components and pension fund provisions, in particular performance-bonus link and stock options or LTIs
Board composition Qualifications and background of Board members
Governance ratings/rankings Company performance in ratings/rankings published by S&P, ISS, GMI, etc.

Key Performance Indicators:
Growth in turnover Growth rate for next three years, broken down by division
Earnings Prognosticated ROI/ROE or earnings per share for next three years
Efficiency Forecast of cost/income ratio for next three years
Investments Figures and breakdown of planned investments for next financial year
Valuation Share price/book value or market cap target

Human Resources Value—Productivity, Motivation and Potential

Key Performance Indicators:
Headcount Full-Time Equivalents (FTEs) or equivalent figure for last three years
Personnel costs Breakdown of salaries and social benefits (health insurance, pensions etc.) of workforce for last three years
Incentive ratio Variable component of salary as a % of total salary with breakdown at different hierarchic levels
Productivity ratio Per capita turnover and net earnings for last three years with breakdown on divisional level
Turnover rate % of employees leaving the company for the last three years and comparison to industry average (if available)
Absenteeism Rate of absenteeism in last three years and breakdown of causes (sickness, family issues, strikes, etc.)
Employee hierarchy rate Proportion of managers to normal staff on divisional basis
Line/Staff ratio % of employees in divisions, after-sales-service units, etc., in proportion to employees in staff functions (book-keeping, legal affairs, communications, etc.)

Key Performance Indicators:
Employee commitment Results of satisfaction and motivation surveys including highlights and improvement areas
Code violations % of employees against whom action has been taken for violations of the Code of Conduct, number of cases of whistle-blowing
Work/life balance track record % of employees working part-time, flexi-time, job-sharing, taking sabbaticals, etc.
Volunteering involvement % of employees active in corporate volunteering, breakdown of major areas of involvement (social work, expert advice, etc.)

Key Performance Indicators:
Training investment Total budget with breakdown of types of training (on-the-job, orientation courses for new employees, etc.) and as a % of total HR costs
Intellectual property Number of patents registered and gained
R&D quota R&D as a % of turnover
Idea management Results of idea management programmes:
number of ideas submitted and acted on during the last three years
Diversity performance and targets % of women and members of ethnic minorities in management positions during the last three years + targets for gender parity, etc.

For more Information:
Business Value Center
Achieving Business Value from Technology, Intangible Assets, EVA and Value-Based Management, Creating Value With Knowledge



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