Management accounting is a concept which involves the collective activity of employees, who act as informed individuals, and implement their informed actions to realise the organizational objective. Decisions taken by the management must be well-researched and debated especially about the unwanted consequences, so as to align individual and collective performance of employees with their objectives.
Performance measurement is an activity based concept where all employees including the management works together to assess, evaluate, and appraise the performance and contribution of individual employees to the organisation. This leads them to make a decision in favour of the organisation and the employee being assessed. This report will analyse the performance measurement issue of ‘lack of controllability’ in organisations along with its origin, its consequences, factors affecting its sustenance, applying the issue in real-world scenario, and possible solutions to fix the dysfunctional issue.
The mathematics is very simple, employees or individuals make the organisation and when employees are unaware of their prime motive and responsibility, the organisation is bound to be impacted severely. Performance management can be a boon if organised properly and aligned with what is most expected from individual and collective performance. Appraisal, assessments, evaluation, and advisory practices to employees about their scope of work can fulfil the task of formulating a perfect management accounting practices through rightly directed performance measurement.