Performance management presents another method of gap analysis.
Gap analysis allows a company to measure its actual performance against its potential performance. This process often allows a company to find areas where efficiency improvements can increase productivity and profits. Some different gap analysis methods include a review between company goals and related responsibilities, an analysis of the procedures and personnel available to accomplish them, and an analysis of actual results versus desired results. Each gap analysis method provides a piece of a larger overall puzzle. Gap analysis can be an ongoing process throughout the life of a company.
Most companies have a variety of goals defined by their mission statements, owners, and executives. These goals can be company-wide, department-specific, or based on a position within the organization. Certain people are usually responsible for achieving the goal or moving the company in the right direction. The methods of this gap analysis technique are intended to find areas where weak links exist when a company tries to meet its internal expectations. In most cases, a company focused on its objectives will have few gaps in terms of responsibilities.
Procedures can represent the specific guidelines or rules a company uses to ensure that workers complete tasks in a specific way. Each member of the team or employee must know the procedures and which ones are most applicable to each individual. Gap analysis methods seek to identify which individuals are not following procedures. In some cases, the procedures themselves may be the problem. Inadequate procedures can prevent or restrict an individual from completing tasks or activities in a timely manner, resulting in poor production for the business as a whole.
Performance management presents another method of gap analysis. For example, a company might want a 5% net profit for the month of June, based on the formally prepared income statement. If not, the company can use gap analysis to find where the budgeting process failed and prevented the company from achieving its desired results. Gap analysis methods also work to assess the output or productivity of each employee. In this way, a company can perform monthly gap analysis.
Companies can use multiple gap analysis methods at the same time. This allows a company to perform many assessments on different operations simultaneously. However, a key point here is to have a purpose behind the analysis. Not acting on negative information and correcting operational problems can result in a gap analysis that is useless.