How do I Measure Performance?

Assess the Effectiveness of your Performance Measures

Why Measure Performance?

The purpose of performance measurement is to identify effective corrective actions to improve products, services and business outcomes.

How do I Measure Performance?

Before you can measure performance people need to know what outcome is expected, where their work contributes to the overall goal, how well things are progressing, and what to do if results are not occurring as they should.

For performance measures to be effective agents for change they must be integrated with activities and outcomes. Any monitoring or measurement must be firmly connected to results from a defined process, in order to know what corrective actions to take and to predict with confidence what effects those changes will have.

There are six steps to developing performance measures:

1. Decide the outcomes wanted.

It is important to be focussed on what matters to your business - If you try to be the best at everything, you'll be the best at nothing.

Answer the questions - Why are we here? Why are we doing this work?

You need to set the direction for all the processes in your business. Outcomes should be statements of the wants, needs, and expectations of customers and other stakeholders. The desired outcome sets the strategic direction of your business.

2. Describe the major work processes involved.

Remember, people are more important than the process, but a good process is important to people

Answer the questions - What are we doing? How are we (or should we be) doing it?

When identifying the processes in your system, start and end with your customer. In between the the start and end point are processes that achieve products or results. Talk with the people doing the work - People often achieve desired results in spite of, not because of, the process that exists.

3. Identify the key results needed.

The "products" are the outputs or results of each process in the system. Identify what is produced by each process identified in step 2 - If you can't identify a product or result, then it is probably an activity NOT a process. That is, the purpose of the activities in each process is to produce some result (a product or service) that is needed by other processes. Products of any given process are inputs to other connected processes in the system.

Ultimately, the final products of the system are those that meet the strategic results - the objective - desired by the company.

4. Establish performance goals for the results.

One of the best methods of establishing performance goals is to ask the customer.

Each process has a product, the "customer" is the group or individual receiving the product. talk with the customer to determine the Customer's Satisfaction Factors (or Critical Success Factors, CSFs) that relate to each product. CSFs are the few key things that must be right for the process to be successful in the customer's view.

The goals should be stated in simple terms using numbers and realistic.

5. Define measures for the goals.

It is important to measure the outcome or result - not the activity and DON'T measure more than you have time to evaluate.

Answer the question - What can you use to track progress? e.g. revenue, proportion of error free products etc.

6. Select appropriate metrics.

Answer the question - What specific things do I measure? e.g. sales this year vs. last year, number of error free products/number of products produced etc

Get in Touch with Jump

If you need help, or you answered no or unsure to any of the questions in the assessment tool, then Jump Business Solutions can help you. Phone us on +64 6 754 8987 or +64 27 450 5271 or email info@jump4biz.com and Jump will come to you, discover your needs, and develop a solution that will create real, long-term and positive change for you and your business.