Syllabus: OCR - A and AS Level Business
Module: Business Objectives and Strategy
Lesson: Measures of Performance: Financial and Non-financial

Introduction

This topic sits within the OCR A Level Business specification under “Business Objectives and Strategy”. It’s designed to help students evaluate how businesses track their success, beyond just profits. The section aligns directly with the OCR curriculum strand: “4.3 Measures of performance – financial and non-financial”, a core component of strategic thinking at both AS and A Level.

Teachers will find this topic essential for bringing analytical thinking into lessons, as it directly connects classroom learning to how businesses operate and grow in reality. The section is also ideal for reinforcing numeracy and evaluative skills, particularly when linked with case studies or simulations.

Key Concepts

Students should be able to:

• Identify and explain common financial performance measures, including:

  • Revenue

  • Profit margins

  • Return on capital employed (ROCE)

  • Cash flow

• Understand and evaluate non-financial performance indicators such as:

  • Customer satisfaction

  • Employee engagement

  • Market share

  • Productivity

  • Environmental and ethical considerations

• Distinguish between short-term and long-term performance goals, and how businesses balance the two.

• Analyse the limitations of relying solely on financial metrics, particularly for businesses with long-term, ethical, or sustainability objectives.

These concepts should be grounded in the OCR framework, where strategic performance monitoring is linked with corporate objectives, decision-making, and stakeholder expectations.

Real-World Relevance

Financial and non-financial performance indicators are everywhere in the business world:

• John Lewis Partnership, known for its focus on employee ownership, tracks staff satisfaction and customer experience as key performance drivers, even when profits are under pressure.

• Tesla frequently reports poor quarterly earnings but is considered successful by investors due to high innovation metrics, brand perception, and long-term vision.

• During the pandemic, many hospitality firms like Greggs used customer loyalty and staff retention data to steer recovery efforts—metrics that mattered more than immediate profitability.

These examples help students understand the value of looking beyond spreadsheets to judge how a business is really doing.

How It’s Assessed

In OCR exams, this topic appears in both data-response questions and longer evaluative essays. Expect to see:

• Command words such as:

  • Explain – define and contextualise

  • Analyse – break down the reasoning behind performance trends

  • Evaluate – weigh up different indicators to form judgements

• Assessment formats include:

  • Interpreting balance sheets and income statements

  • Applying knowledge to mini case studies

  • Structured essay responses comparing financial vs non-financial indicators

Numeracy is tested where appropriate, but strong analysis is key—students must demonstrate insight into what the data means and its business implications.

Enterprise Skills Integration

This topic lends itself to key enterprise competencies:

• Decision-making: Choosing which performance measures to prioritise in different business scenarios

• Problem-solving: Evaluating underperformance and suggesting strategic solutions

• Critical thinking: Challenging over-reliance on financial metrics

• Communication: Justifying performance evaluations to varied stakeholders

Using tools like Enterprise Skills’ Business Simulations, students can put theory into practice by running virtual businesses where they monitor KPIs like profit, customer satisfaction, and employee morale simultaneously.

Careers Links

This unit supports Gatsby Benchmarks 4, 5 and 6, especially in:

• Showing students how real businesses evaluate success, reinforcing Benchmark 4 (linking curriculum learning to careers)

• Giving encounters with real data and workplace scenarios through case studies or simulations (Benchmark 5)

• Allowing students to test strategic roles in action via experiential learning (Benchmark 6)

Relevant career roles include:

• Management consultant

• Financial analyst

• HR performance manager

• Business development officer

• Sustainability officer

This topic helps students understand what “success” looks like in these roles beyond just financial figures.

Teaching Notes

Tips for delivery:

• Use mini case studies of familiar brands (e.g. Aldi vs Waitrose) to explore contrasting KPIs.

• Set up class debates on whether non-financial measures should carry more weight than profits.

• Link performance measures to functional areas (e.g. finance vs operations vs HR) to embed interdependence.

Common pitfalls:

• Students may confuse profitability with cash flow—clarify these distinctions early.

• Some students focus too heavily on numbers. Push for analysis of what those figures mean.

Extension activities:

• Run an Enterprise Skills Business Simulation to see KPIs in action.

• Task students to design a performance dashboard for a fictional business.

• Explore ethical dilemmas: Should a profitable business still be judged poorly if it scores low on employee wellbeing?