Identification of Key Performance Gaps

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Identification of key performance gaps "Organizations perform strategic planning to establish strategic goals, related objectives, and key performance measures. The performance measures provide feedback to managers on how well specific objectives are being achieved in support of the strategic goals and objectives. The most important organizational performance measures are called key performance indicators, or KPIs, and are used by senior management.... A 'performance gap' exists when the actual performance on a KPI is below the planned or expected level of performance" (Identifying Organizational Performance Gaps, 2010, IT Economics). At our organization, one of our goals was to fully implement the Ferguson model for analyzing credit risk. The Ferguson model was to be implemented organization-wide in the wake of the 2008 crisis. It is a form of "rationing that does not rely on asymmetric information or an exogenous constraint on the supply of loanable funds" (Ferguson & Peters 1997). Credit rationing is analyzed in terms of "a portfolio effect (such as diversification or a regulatory cost) that is not directly related to the creditworthiness of individual applicants" (Ferguson & Peters 1997). Macro economic conditions are given greater significance, and the bank will often offer "a pooling loan rate to all borrowers, even when differences in those borrowers' credit risk are observable" (Ferguson & Peters 1997). However, individual banks within the organization
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