Performance measurement systems

Discussion on the relative merits of these definitions appeared in several articles in the newsletter of the Performance Management Association.

Performance measurement systems

How to set useful targets for your business The importance of measurement and target-setting Performance measurement and target-setting are important to the growth process. While many small businesses can run themselves quite comfortably without much formal measurement or target-setting, for growing businesses the control these processes offer can be indispensable.

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The benefits of performance measurement Knowing how the different areas of your business are performing is valuable information in its own right, but a good measurement system will also let you examine the triggers for any changes in performance.

This puts you in a better position to manage your performance proactively. One of the key challenges with performance management is selecting what to measure. The priority here is to focus on quantifiable factors that are clearly linked to the drivers of success in your business and your sector.

These are known as key performance indicators KPIs. See the page in this guide on deciding what to measure. While financial measures of performance are among the most widely used by businesses, nonfinancial measures can be just as important.

Performance Measurement Characteristics

For more information about financial measurement, see the page in this guide on measurement of your financial performance. In this way, targets form a crucial link between strategy and day-to-day operations.

Deciding what to measure Getting your performance measurement right involves identifying the areas of your business it makes most sense to focus on and then deciding how best to measure your performance in those areas. Focusing on key business drivers Your performance measurement will be a more powerful management tool if you focus on those areas that determine your overall business success.

This will vary from sector to sector and from business to business. So put some time into developing a strategic awareness of what it is that drives success for businesses like yours.

Performance measurement systems

A manufacturer producing and selling low-cost goods in high volume might focus on production line speed, while another producing smaller quantities using high-cost components might focus instead on reducing production line errors that result in defective units.

Finding your specific measures Once you have identified your key business drivers, you need to find the best way of measuring them. Again, your priority here should be to look for as close a link as possible with those elements of your performance that determine your success.

For example, you may decide that customer service is a strategic priority for your business and to therefore start measuring this. But there are many ways of doing so.

You might consider measuring: The challenge is to find which specific measure or measures will enable you to improve your business. This type of measurement unit is often referred to as a key performance indicator KPI.

The two key attributes of a KPI are quantifiability i. See the page in this guide on choosing and using key performance indicators.

Column: One Good Idea: Eight Steps to a New Performance Measurement System

Using standardised measures There are standardised performance measures that have been created which almost any business can use. Examples include balanced scorecards, ISO standards and industry dashboards. Choosing and using key performance indicators Key performance indicators KPIs are at the heart of any system of performance measurement and target-setting.


When properly used, they are one of the most powerful management tools available to growing businesses.Performance Management & Measurement The purpose of this module is to introduce the fundamental concepts of performance management and assist an organization to develop a practical strategy for achieving its quality improvement (QI) goals.

The ultimate aim of implementing a performance measurement system is to improve the performance of the organization. If you can get your performance measurement right, the data you generate will tell you where you are, how you are doing, and where you are going. Modern Systems Approach.

Performance measurement - Wikipedia

A performance measurement system that creates and manages key performance indicators (KPIs) needs [ ]. Read chapter PART I - Introduction to Performance-Measurement Systems: TRB’s Airport Cooperative Research Program (ACRP) Report Developing an Airpor.

The performance measurement revolution has seen a move away from the problems of past measurement systems.

Performance measurement systems

Five common features of out-dated performance measurements systems were: Dominant financial or other backward-looking indicators. Performance measurement is the process of collecting, analyzing and/or reporting information regarding the performance of an individual, group, organization, system or component.

Several performance measurement systems are in use today, and each has its own group of supporters.

Performance Measurement System in Integrated Enterprise Excellence | Smarter Solutions