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What Is an Effectiveness Evaluation?

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  • Written By: Esther Ejim
  • Edited By: Kaci Lane Hindman
  • Last Modified Date: 23 November 2016
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Just like the name suggests, an effectiveness evaluation is a tool utilized in different fields for the analysis of the rate of progress for the subject under consideration. In its application to business, an effectiveness evaluation may be utilized by various businesses for the purposes of assessing their performance with a view to using the result of the analysis for strategic planning or positioning. This type of evaluation can be achieved by the study of several indices, including the output from the company, the quality of the product, the performance of the employees, the rate of profit, and the ability of the company to measure favorably with other business in the industry or market.

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An effectiveness evaluation can be performed on a company by checking an aggregate of factors that include the rate of demand for its product or service in relation to the output by the company. Assuming the company under consideration is a wine-producing company, it can apply an effectiveness evaluation by checking the volume of demand for its wine by consumers. If the demand for the wine is high, it will let the company know that its marketing strategy is working and that consumers have embraced its product. When the demand is low, it will let the company know that it needs to change its marketing strategy or improve its product in order to reach more consumers. The wine company can also use the effectiveness evaluation check to find out if its current rate of production output is enough to satisfy the volume of demand for its product.

Another way in which an effectiveness evaluation can help a company check its progress or lack of it is through an assessment of the profit made by the business over a stated period. If the profit level exceeds or is at par with a projection made by the company, this will indicate that the company is performing well in terms of sales, but if the check reveals a total profit that is lower than expectations, this will show that the company is not meeting its targets. The assessment of the human capital will also show if the company is performing well due to the fact that the quality of human capital helps in the determination of the effectiveness of a business. After applying the various checks and collating the results, the company under consideration should have a better understanding of its effectiveness as a business concern.

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