Effective Performance Measurement

Payne in Managing Quality lists the following as essential elements of good performance measures: · They must relate to the requirements of the total business - the local performance measures should have been tested against the objectives of the overall business improvement strategy. · They must reflect the critical aspects of functional performance - meaningful performance measures depend on a clear understanding of unctional purpose. · They must reflect the critical aspects of performance as seen by the customer - it is fundamental to establish and define the needs of both external and internal customers. · They must be understood by all those who need to understand - if the improvement process is to be measured and the appropriate people involved, in order to motivate them and make them accountable, then they must understand the measures used to assess their performance. · They must be highly visible - since the prime purpose of performance measures is to inform people how well they are doing against set targets, the style of presentation is important. · They must be subject to a reviewing mechanism - in the dynamic environment of business, change is inevitable and should be monitored to ensure the continued validity of the measures. · They must be used in conjunction with appropriate target setting - targets/objectives define the required rate of improvement.