Performance Measurement
Performance measurement is a management discipline that focuses on quantifying the resources consumed and results achieved from a business process or operation. The objective is to create the highest possible value for the lowest possible cost and risk.
Often, this leads to the exact opposite outcome:
- Performance measurement becomes an end in itself consuming inordinate amount of resources and taking away focus from results
- Incorrect measurement leads to wrong decisions
- Accurate measurement leads to wrong decisions
Performance measurement's promise is not realized because managers often:
- Pick the wrong measures or metrics
- Focus on the short term
- Rely on financial measures
- Measure what is not measurable or does not lend itself to traditional metrics
- Prefer quantitative over qualitative measures