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Steps or Ways To Improve The Performance Measurement Framework or System.
Published by slang April 9th, 2006 in Finance Role/KPA/KPI, Performance MgmtIn my earlier article on Targeted Performance Management, we have touched on the following:
- Overview & the purpose of TPM,
- What are the principle underlying TPM,
- The various stages of process flow of TPM,
Ways to improve Performance measurement system:
We shall now focus on the ways, where we can improve the performance measurement system or framework.
The following improvements are based on the key findings conducted over the last ten years by members of the Cransfied Centre for Business Performance, UK:
- Designing Measures
- We must be able to decide which measures to select and which to ignore. Remember that “what gets measured get done”. It’s important to limit the number of measurement so as to give clarity to what the organization is trying to achieve. This particularly applies to the performance prism in the Balanced Scorecard.Management team needs to do this together to select the key objectives for the organization over the next period and designing the appropriate measures to track improvement.
• Next, is the design of the performance measure.
Remember that whatever measures the management team has designed will drive behavior so it is crucial to translate the organization’s objective into appropriate one, paying attention to precisely how they are calculated. Make sure the calculation is simple to understand and easily communicated to the staff.
- Implementing Measures
• The implementation of the performance measurement system should be considered as a process in its own right. Therefore, we need to pay careful attention and sufficient time to the collecting of the required data, putting it into the right format and then distributing the materials to those that need it in the organization. Persistency, project planning and allocating resources are the key success in the implementing of a successful performance management system. Remember you are confronting with the die-hard attitude, political problems and traditional culture when implementing this performance management system.
- By designing and implementing the measures, we should use the measures to:-
• Establish position- identifying current level of performance,
• Communicate direction-telling everyone what the organization is trying to achieve,
• Influencing behaviour- so that people take note of the performance measures in everything they do,
• Stimulate action- so that people automatically take action when the performance is not moving in the expected direction,
• Facilitate learning – so that people get feedback from the performance measures and learn from their experiences.
The ideal use of measures occurs when individuals act on the measures themselves without prompting or supervision.
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- The Changing Role Of Finance Function: Creating A Vision Statement ( Part 4)
- Targeted Performance Management (TPM) - An Overview
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