(Solution) CIPD 5C002 (AC3.1) Appraise (2) different ways organisations measure financial and non-financial performance

Short references should be added into your narrative below. Please remember to only list your long references in the reference box provided at the end of this section. 

Word count: Approximately 400 words

The cash flow analysis is a strategy which is embraced in assessing financial wellness of an organisation. According to CIPD (2024), cash flow analysis tracks inflow and outflow of finances within a specific period of time.  The outcome of analysis is identifying existence of finances for supporting their operations and managing liability. This is evidence of an organisation ability of continuing their practice, meet expectations and financing their investment. The cash flow is obtained by reducing cash inflows from cash outflows.

Appraisal– The strength/con of cash flow analysis is enhancing accuracy in liquidity presentation and avoidance of scenarios finances are insufficient. According to CIPD (2024a), the priority is to present the scope of achieving revenues in their practice.

For cons/limitations, they are distinct from profitability where a false perception of having immense finances is evident but in reality, finances are being lost in an organisation.

It is applicable amongst people practice professionals to evaluate investment strategies, establish profits accrued or to project future finances needs.

Customer Satisfaction (Non-Financial Performance)

This is a non-financial performance metric which is used in evaluating the appropriateness of an organisation in achieving or exceeding their client’s needs. According to Dahal et al. (2023), this is by pursuing surveys, feedback forms and net-promoter scoring. For example, the application of surveys assists in discovering f their services/products delivery achieves or lack therefore of client’s expectations for change implementation.

Appraisal– Through the embrace of customer satisfaction, an entity is in a position of appreciating client’s loyalty and potential customers retention strategies. According to CIPD (2024c), the customers loyalty is an assurance. Therefore, the clients progress ordering products and services hence increase in returning customers.

For limitations, to obtain and evaluate feedback is a major challenge since the responses obtained can be subjective or impacted by different factors. Also, achieving customer satisfaction has its risks since it contributes to neglect of operations and product gains.

In terms of application, customers satisfaction is embraced by people practice professionals to initiate training strategies targeting people. Also, it assists to come up with standards operation strategy on clients’ relations or implementation of strategies meant to improve client’s overall experience.