Six Good Reasons to Measure Performance

Walk into any well-run business and the chances are that you will see their Performance Measures somewhere on full display.  Why do they do that?  What is the benefit?  If you are not conviced of performance measurement here are six good reasons for doing it.

1. Measurement establishes the current position.  Any initiatives can be  measured against that and progress or lack of progress becomes easy to identify.
2. The set of measures in use communicate the direction of the business.  Companies who measure market growth tend to be moving in the direction of market growth.
3. Measures stimulate action in the most important area.  It’s a well known phrase that “what get measured, gets done”.  If you are going to measure your sales force on the basis of cash collected, then you will see them carrying out collection activities.
4. Performance assessment stops being an opinion thing and becomes a fact thing.  Discussions founded on facts are more objective and more productive.  Deming, considered the grandfather of the quality movement, had an expression, “Without data, everyone is an expert”.
5. A good company learns from its experiences.  Measures provide feedback that enable a business evaluate the success or failure of its initiative.  It can plan to do more of what works and less of what doesn’t.
6. Measures influence behaviour of the workforces.  By identifying what is important to the stakeholders in the business the employees are given clear direction on what where their efforts should be spent.

Measurement is a key management tool and repays the efforts invested in the design and creation of a measurement system.

By Jim Cahill, Managing Director of Owner Manager Support Services Limited.

Return to main Resources page