Performance Measurements
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- Date Submitted: 03/08/2011 09:56 AM
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Performance Measurements
Introduction
Strategic, performance measurement-based management systems allow a business to align its activities to its vision, and to monitor performance toward strategic goals over time. Successful organisations identify key performance indicators, and measure their progress against set targets for those indicators to measure its effectiveness. This is performance management, and the key indicators are the Performance Measures (or metrics) of the business. Performance management is used to track the organisations progress against its vision and specific performance goals.
Strategic performance measures will assist the organisation to create a set of performance measures that will look forward and act as early warning systems. Even though Performance Measures may be applied to individual projects, departments or specific roles to ensure that deadlines are met, targets are reached and costs are controlled, etc., it is essential for the manager to understand how the project, activities or roles support the organisation’s mission and strategy, and how the project/activities will influence the organisation’s key Performance Measures. Good Performance Measures:
• Provide a way to see if our strategy is working,
• Focus employees' attention on what matters most to success,
• Allows measurement of accomplishments, not just of the work that is performed
• Provide a common language for communication
• Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value(targets), and thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
There are many different measurement frameworks, including the balanced scorecard, activity based costing, competitive benchmarking, and shareholder value added. Each of these provides a unique and different way to look at an organisation’s performance. The...
Introduction
Strategic, performance measurement-based management systems allow a business to align its activities to its vision, and to monitor performance toward strategic goals over time. Successful organisations identify key performance indicators, and measure their progress against set targets for those indicators to measure its effectiveness. This is performance management, and the key indicators are the Performance Measures (or metrics) of the business. Performance management is used to track the organisations progress against its vision and specific performance goals.
Strategic performance measures will assist the organisation to create a set of performance measures that will look forward and act as early warning systems. Even though Performance Measures may be applied to individual projects, departments or specific roles to ensure that deadlines are met, targets are reached and costs are controlled, etc., it is essential for the manager to understand how the project, activities or roles support the organisation’s mission and strategy, and how the project/activities will influence the organisation’s key Performance Measures. Good Performance Measures:
• Provide a way to see if our strategy is working,
• Focus employees' attention on what matters most to success,
• Allows measurement of accomplishments, not just of the work that is performed
• Provide a common language for communication
• Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value(targets), and thresholds
• Are valid, to ensure measurement of the right things
• Are verifiable, to ensure data collection accuracy
There are many different measurement frameworks, including the balanced scorecard, activity based costing, competitive benchmarking, and shareholder value added. Each of these provides a unique and different way to look at an organisation’s performance. The...