This article throws light upon the six main criteria’s for evaluating the effectiveness of planning in an organisation. The criteria’s are: 1. Usefulness 2. Accuracy and Objectivity 3. Scope 4. Cost-Effectiveness 5. Accountability 6. Timeliness.
Criteria # 1. Usefulness:
To be most useful to management in performing its other functions, a plan has to be flexible — yet stable – continuous and simple.
Flexibility is absolutely essential for successful strategic planning. It results from careful analysis and forecasting, developing continuous process. What is therefore demanded of a good plan is that it is capable of quick and smooth adjustment to changing environmental conditions without much loss of effectiveness.
The second desirable feature of a good plan is stability which implies absence of change in the plan. Frequent changes in plans make it difficult for managers to be familiar with them as an operation tool and to use them effectively. A plan is said to be stable if it is not to be abandoned, changed or modified extensively merely because of changes in the long- term trend of the external environment of business.
The third desirable feature of planning is continuity. However, it does not imply that there is no scope for plan revision of disbanding. In fact, when a plan has outlived its usefulness it is replaced by another so that the guiding concepts (or principles) provided by planning may be continuous.
The larger and more complex an organisation happens to be and higher the degree of complexity of the organisation, the more complex plans have to be. However, it is often observed that some plans are unnecessarily complicated, making it increasingly difficult for planners to implement and monitor them.
Thus the simpler the plan, the easier it is to accomplish its objectives with the minimum number of variables, so that the chance of complications is minimized.
Criteria # 2. Accuracy and Objectivity:
There is need for plan evaluation to ascertain whether they are definite, clear, concise and accurate. The degree of effectiveness of decisions and other management actions varies directly and proportionately with the nature, adequacy and reliability of information on which they are based.
Thus it is essential for plans to be based on factual and realistic thinking about the requirements needed to reach objectives rather than on the personal motives of managers carrying out the planning exercise. The achievement of this goal demands that planning is based on objective thinking.
Therefore the planners have to be careful from the beginning about one thing: they must not permit emotional and personal objectives to interfere with the factual, logical, and realistic requirements of the plan.
Criteria # 3. Scope:
Plan evaluation has also to be done in terms of their scope.
This includes the following:
A plan has to be comprehensive enough to cover all the action that will be required of individuals and organisational elements to reach objectives. At the same time it has to be ensured that the plan does not specify the nature and conditions of the action in such minute detail that it will be unduly restrictive. The implication of this is simple enough.
A plan should not put unnecessary limitations on the nature and conditions of actions so that there is loss of initiative and freedom of action. Rather, a plan should be such as to enable managers at every level to coordinate the action on the lower levels for which they are responsible.
To the extent possible only one plan has to be made operational at a time so as to prevent confusion, inconsistency and unnecessary duplication of effort. It does not imply that there should not be sub-divisions of the overall plan or other contingency plans, or divisional plans.
It is because there may be several components (parts) of the same plan. Therefore each plan should be so designed as to achieve one central objective and it must be consistent and complete in itself.
Every organisational unit depends on or is related to the other units. Each such unit is supposed to have managers whose task is to plan their operations and actions in terms of the special objectives of their unit.
The effectiveness of these managers is likely to be lost, at least partly, if the various unit plans lack consistency, cooperation and coordination. Thus it is necessary to ensure unity and consistency, at least in the overall objectives of the planning units and the organisation itself.
Criteria # 4. Cost-Effectiveness:
Planning is no doubt a costly exercise. It is not only a time-consuming process, but also costly in terms of effort and emotional drain on those who formulate and implement plans. Thus planning exercise is to be carried out only if it is justified on cost-benefit terms. It is warranted if — and only if — the results increase revenues or reduce costs by more than the cost of the planning and its implementation.
Criteria # 5. Accountability:
The term ‘accountability’ refers to the practice of holding subordinates accountable for exercising delegated authority in such a way as to fulfill assigned responsibilities and of rewarding or punishing them on the basis of their performance.
Such ‘accountability’ has two different, but interrelated, aspects:
1. Responsibility for doing the planning and
2. Responsibility for implementing the plans.
It is to be noted that, as a general rule, planning is not the job of any one person designated as the ‘planner’. Instead it is part of the job of all organisational managers. The reason is easy to find. Planning has to reflect the ideas and commitments of those responsible for implementing the plans if they are to be successful.
Yet those managers cannot achieve the best possible results without “overall guidance, coordination, and direction in their own efforts from someone higher in the organisation who has specific authority and experience in planning. This guidance can take the form of guidelines, specific measures of performance, and timetables provided by top management.”
Criteria # 6. Timeliness:
Planning and forecasting are interrelated. Corporate forecasting lies at the heart of the planning process. However, as Negginson has noted, forecasting the future course of events with sufficient accuracy poses a problem “because of the vast number and variety of events that may take place over which management has little, if any, control.”
Organisations are affected by a number of environmental factors such as major catastrophes, technological changes, or even changes in weather conditions. It is, no doubt, difficult to predict such event with a reasonable degree of accuracy. Yet it is absolutely essential for the planners to make such important predictions.