Performance Measurement System: What are the steps in creating an effective performance measurement system?

Measurement tends to be the most difficult criteria as many things that are worth doing are difficult to directly measure, checking involves setting up an effective monitoring system, backed up with sensible performance measures, consequently, many appraisal processes suffer from inflated expectations, undue complexity, poor timing, and the natural human tendency to avoid conversations too often seen as negative.

Determining System

Since your organization is constantly changing, creating a culture that is customer focused, and collecting and studying data that supports efforts for the customer are critical components to the system. For the most part, before determining what kind of performance management system your organization will use, it is important to discern what the outcomes of the process should be.

Development, implementation and integration of the PM system requires time, effort, skills, expertise and perhaps most importantly, the active support of senior management, the generic performance management cycle is the cycle of activities that recur in any social system that is serious about improving itself and how it works with its external environment, whether the system is an employee, team, recurring process in the organization or the organization itself, similarly, although there may never be a single perfect measure, it is certainly possible to create a measure or even multiple measures which reflect the performance of your system.

Purpose of an improved performance measurement system to become the basis of a new management system, one that aligns and focuses the entire organization on implementing and improving its strategy, effective performance measurement helps ensures that all organizational activities support the overall mission and business objectives by always linking actual results to plans at all levels of the organization, also, by now, you have all noticed the overwhelming trend to ditch performance rating scales and instead, have performance appraisals and performance management be centered on quality conversations and continuous feedback .

An effective performance management system ensures that there is a continuous process of performance enhancement through setting individual and team goals that are aligned with the strategic goals of the organization, within each phase, a variety of steps can be taken to improve your PM system and employee reactions, also, performance measurement is the process of collecting, analyzing and, or reporting information regarding the performance of an individual, group, organization, system or component.

Akin are the quantitative indicators you put in place to track the progress against your strategy, later, performance measurement is done after the product is available in order to understand the performance of the actual system to various real world workloads and to identify modifications to incorporate in future designs. In the first place, another benefit is that measurement provides a mechanism for reporting on performance to upper management.

Performance Measurement System cannot be a duplication of a system designed and implemented in another organization, even your organization in the same industry or the same business group, organizations should avoid creating and using a performance measurement system that encourages firefighting the problems of the day or week in lieu of orchestrating process improvement efforts which reduce the likelihood of issues reoccurring in the future. Coupled with, relationships of different components simultaneously affect and are shaped by the system.

Quality measures provide information about the extent to which work performed met prescribed standards, including accuracy, timeliness, and completeness, under the balanced performance measurement system, quantity measures provide information about the amount of work performed and products or services provided, furthermore, key business metrics for performance provide direction for future strategic growth.

Want to check how your Performance Measurement System Processes are performing? You don’t know what you don’t know. Find out with our Performance Measurement System Self Assessment Toolkit: