Performance Measurement
Performance Measurement Challenges
leaders need insightful and reliable information to make and go for strategic decisions Management should ensure measures are driving behavior that is not in conflict with objectives of the organization Management must implement a balance of lagging and star(p) indicators to answer day-to-day activities and monitor where the business is headed
Why do Measurement Efforts Fail?
Internal bias Historical orientation Over-emphasis an ad hoc local activity measures A large number of antiquated measures A focus on data, not information escape of alignment with strategic business objectives
SMART Performance Indicators
unique(predicate) Is the indicator sufficiently specific and clear to everyone? Measurable preempt the indicator be measured? Acceptable Has agreement been reached somewhat the indicator to be used? Realistic Is the norm achievable? Timely Is there a clear deadline for the achievement of the verbalize norm?
Example:
Goal sum up number of line accounts SMART Performance Indicator Increase number of tell accounts in the 2007 pecuniary year by 10% compared to the 2006 financial year Not SMART Performance Indicator Increase number of key accounts by 10%
Corporate calling card is a series of measure pairs
Measures should be some(prenominal) leading and lagging Measures should mirror both internal and external concerns Measures should be both cost based and non-cost based Measures should be both quantitative and qualitative
Aspects of KPI Scorecard
Internal External Non-financial
Financial
Short termination
Long term Noncontrollable Forwardlooking Leading
Controllable Backwardlooking Lagging
Current position Company XX
KPI will repel behavior in the organization
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