Characteristics of Good Performance Measures

Key Performance Indicators (KPIs) are critical for the success of any organization. They are a measure of progress against goals. However, not every measure is a KPI. Put it in the words of Albeit Einstein, “Not everything that can be counted counts, and not everything that counts can be counted”.

• Good performance measures allow for comparisons to be made to enable performance improvements.

• They reflect on the overall organizational goals and strategies.

• They are relevant.

• They are timely.

• They are actionable.

• They are both financial and non-financial.

• They allow easier communication of the strategy and help people understand the definition of organizational success.

• They don’t measure individual performance, instead they look at processes and activities.

• They are results-focused and not action-focused.

• They are supported by a team of influencers (senior management).

• They are predictive in nature, indicating what drives business value.

• They are tracked and monitored frequently, not once or twice.

• They are not copied from outsiders. They are specific to your own organization and industry.

• They inform an organization’s decision-making process.

• They are ‘owned’ by someone who is accountable for their outcome.

• They are few in number, not focusing on many outcomes at once.

By measuring that which really matters, management can focus on those attributes and improve performance. Care should be taken that, what the organization is calling performance measures are not milestones.

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