Performance measurement initiatives are gaining in importance for companies faced with the challenges of today’s competitive markets. These initiatives can determine the future success of a business. Performance measurement helps companies reach their strategic and operational goals. It is also a vital communication tool. Well-designed performance measurement shows a vivid and dynamic picture of the business. It not only assists in managing current activities but also helps plan the opportunities for future growth.
But many organizations are so obsessed with performance management they would literally measure anything that moves. It just created a semblance of measuring efficiency. In reality, with no connection to the corporate strategy, it makes little or no sense.
Despite frequent failure and misapplication, performance management is central to the organizational process and provides a number of benefits. A company’s values, strategy and progress are reflected in what it has decided to measure and how it uses metrics to shape up employee behaviors.
Today the function of enterprise performance management is not to command and control but to predict. Responsibility has shifted down the organizational chart and self-governing teams are making the bulk of the management decisions.
An enterprise-wide performance management program achieves multiple goals. It
Measures client requirements
Clarifies strategic objectives
Signals where performance is headed and
Serves as the basis for rewarding excellent performance.