Performance management is an effective technique for aligning all primary organizational activities and sub-functions so that the organization's emphasis is on achieving its objective. A well-designed performance management system may be critical in simplifying employees' operations to accomplish the organization's ultimate goal and vision.Performance management is a much bigger system since it encompasses planning, executing, assessing, and evaluating to maximize development and productivity on an individual and organizational level.By clearly outlining individual- and team-based tasks in the form of key performance indicators (KRAs) and fostering an awareness of shared reciprocal accountability, a sound performance management system promotes, empowers, and encourages ... Read More

What is Performance Management?Performance management is a communication-based process between a supervisor and an employee occurring throughout the year, to plan, monitor and review the employee's performance, objectives, goals, and overall contribution to the organization. Essentially, performance management is what organizations undertake to increase their success and maintain a competitive edge.Performance management is often categorized into two types; they are as follows −Corporate Performance ManagementHuman Performance Management.Corporate Performance ManagementCorporate Performance Management (CPM) is defines the methods, metrics, and processes used to monitor and manage the business performance of an organization. CPM strategically focuses on information to operational plans in order ... Read More

Let us begin by learning about business intelligence.Business IntelligenceBusiness intelligence is an application-driven phase allowing organizations to analyze raw information from various sources, extracting vision that lead to higher effective business results. It is a set of tools and methods that analyze and transform raw information into actionable and coherent data for use in business analysis to support decision-making.Each business has strong transaction-oriented systems that save all information gathered from daily operations into repositories.It can stay competitive, businesses should rediscover and uses the data they influence, and this is where BI appears into play. Business intelligence can change vision from ... Read More

In this post, we will understand the difference between strong entity and weak entity −Strong EntityIt has primary key.It doesn’t depend on any other entity.It can be represented using a single rectangle.The relationship between two strong entities can be represented using a single diamond.It can either have total participation or no participation.Weak EntityA weak entity has a partial discriminator key.It depends on the strong entity.It can be represented using a double rectangle.The relationship between a strong and a weak entity can be represented using a double diamond.They always have total participation.Read More

A Fact Table contains a combination of attributes from completely different dimension table. It helps the users understand and analyze the business dimensions that would help improve the business processes. Fact tables are also known as Reality tables.Dimension tables, on the other hand, help a Fact Table gather the dimensions on the data that needs to be collected.Read through this article to find out more about Fact tables and Dimension Tables and how they are different from each other.What is a Fact Table?In data warehousing, a Fact Table is one that contains the measurements, metrics, or facts of a business ... Read More

The major differences between contribution margin and gross margin are as follows −Contribution MarginIt is used by pricing decision (whether product line is making profits or not).Contribution margin = difference between sales and variable costs divides by sales.It analyses profit metric per item.Only variable cost is considered for calculations.It determines the margin for production, where only variable costs are present.It detects variable costs and its percentage included in margin.It is useful for multiple scenario analysis.Gross MarginWhether production cost is covered by its sales or not.Gross margin = difference between revenue and Cost of goods sale/revenue.It analyses total profit metric.It considers ... Read More

The major differences between share outstanding and float are as follows −Share OutstandingThese are shares held by stakeholders, company officials and investors in public domain.Contains both stock float and restricted shares.Contains all shares of company held by its investors.It is used to calculate market capitalisation and earnings per share (EPS).It provides voting right and ownership right.Private or public limited company will issue these kinds.It has low risk.FloatIt is share issued by company to public and available to investors for trading in stock market.Contains only float stock.It is available for public.It acts as determinant of financial calculations.Won’t provide voting right and ... Read More

The major differences between discount rate and interest rate are as follows −Discount RateFederal reserve banks charges to depository institution/commercial banks on its overnight loans.Central banks decide the rate.It is not determined by market rate of interest.It determines present value of future cash flows.It focuses on investors view.The demand and supply has no effect on discount rate.Interest RateIt is an amount charged by lender to a borrower for use of assets.Commercial banks decide the rate.It depends on market rate of interest, creditworthiness etc.It can’t determine present value.It focuses on lender’s view.The demand and supply has effect on interest rate.Read More

The major differences between ROIC and ROCE are as follows −ROICROIC refers to Return on invested capital.It aims to find the return relative to capital which is invested in business.It evaluates profitability by considers only capital invested in the business.ROIC = Net operating profit/invested capital.Company said to be profitable, if ROIC is greater than zero.Measures after tax.It is more important for an investor.ROCEROCE refers to Return on capital Employed.Its main aim is to find return relative to total capital employed.It had very broad scope.ROCE = net operating profit/capital employed.Company said to be profitable, if ROCE greater than cost of capital.Measures ... Read More

The major differences between licensing and franchising are as follows −LicensingFranchisingBusiness model deals with products and goods.Ownership is with licensee.Governed by contracts law between partiesWithout investing huge capital licensor will get vertical integration in market.Licensor don’t have control over intellectual property rights.Registration is not mandatory.No training and support is provided.One-time property/rights transfer.Negotiable fee structure.Royalties are commonly used term.Covers single product/products.Generally, established business will go licensing.Business models deals with providing services.Ownership is with franchisee.Governed by companies’ laws and other federal laws (international business)Franchisor get access to diversified market geographically.High initial investment is required.Registration is mandatory.Training and support is provided.Ongoing assistance is ... Read More