In management there is a three step process known as the control process which used to measure actual performance, compare actual performance against a standard, and take managerial action to correct deviations or inadequate standards. Of course the control process assumes that standards already exist and these standards are specific goals created during the planning process against which performance progress can be measured.
The first of the three steps is measuring what actual performance is. Four common sources are frequently used by management to measure employee performance and these are: personal observation, statistical reports, oral reports, and written reports. Firsthand, intimate knowledge of actual work activities can be obtained through personal observation. This approach provides information that isn't filtered through others and it provides opportunity for a manager to see what's actually going on. Managers use statistical reports to assess performance in the form of graphs or charts. Most of the time, this approach provides easy to visualize data but is somewhat limited on actual performance about an activity. Oral reports such as conferences, meetings, telephone calls, etc. are used to acquire information and may be the best way to keep tabs on work performance. The only problem is historically, the major drawback was the problem of documenting information for future reference. Written reports like statistical reports can be slower yet more formal and this works to create a report that is more comprehensive and concise than other reports. .
The second step in the control process is the comparing step and in this step managers measure the degree of variation between actual performance and the standard. To determine what is acceptable managers must establish a range of variation which is the acceptable parameters of the variance between actual performance and the standard.