Practical Tools for Measuring Performance
Having looked at the nature of performance and the benefits of measuring it, we will now describe some practical tools to help you. We will set out the key elements of a performance measurement system and then take you through the tools that companies find most effective when designing their performance systems.
2.2 ELEMENTS OF A PERFORMANCE MEASUREMENT SYSTEM
A performance measurement system will typically include a framework, objectives, measures, targets and initiatives for improvement. We will take each element in turn.
Performance measures enable you to calculate and report the level of performance you are achieving. However, as you have seen from Chapter 1, they should do much more for you than this. One of their prime benefits is in communicating to all employees what is important for the business and for this reason it is essential that your measures are closely related to the organisation’s strategic objectives. Increasingly, companies and public sector organisations are using frameworks to help them to ensure there is a strong link between strategic objectives and to organise their objectives in a useful way. Frameworks such as the Balanced Scorecard and Performance Prism are particularly useful for doing this.
Frameworks are the organising structures used in measurement systems. Each framework has a slightly different focus. The Balanced Scorecard will help to focus more attention ...