How
does your
Performance Measurement System
perform?
Abstract
Keywords: PMS, Performance Measurement, Performance Management,
Performance Measurement System, Audit, Assessment, Self-Assessment, Review
How can the deployment of a performance
measurement system be evaluated,
in order to improve it?
Much is written about performance
measurement, but no author describes a simple step-by-step method to assess the
deployment of a performance measurement system. The development of such a method
was the subject of this research.
Initially, literature was reviewed
for best practices in performance measurement as well as for existing tools and
frameworks to assess the deployment of a performance measurement system.
Building upon on the strengths of
existing frameworks and tools, a simple step-by-step method was developed to
assess the deployment of a performance measurement system. The basic assumption
is that the added value of a performance measurement system should be assessed
by looking at the added value that it has for individual users: Do the users
really act upon the information
provided by the performance measurement system and do they use it in their decision-making?
The self-assessment is built
upon three central questions:
- Which
performance measures are really acted upon?
- Which
performance measures are not used, and why not?
- Which
other performance measures should be added?
Objective of the method developed
is to identify the strengths and weaknesses (or better the achievements and
challenges in the deployment) of a performance measurement system in order to
improve it.
There can be
different reasons why performance measures are not used:
-
The performance measure is wrong or irrelevant.
-
The performance measure is relevant but there are problems in its
implementation. These include: being reported too late or not frequently enough;
unclear results; unreliable results, etc.
The evaluation method developed consists of five steps:
- Collect and structure documentation to know what should be evaluated
- Review the usage of the PMS by interviewing the users to identify
strengths and weaknesses of the performance measurement system
- Review the measurement, analysis and reporting processes. Improvement of
these processes can improve the usability of performance measures
- Generate/verify conclusions and recommendations with the people involved
- Report and communicate the results of the assessment in order to initiate
improvements
The method was successfully applied in practice during the review of the
performance measurement system at a water end electricity producing and
distributing company with over 700 employees.
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