The Emergence of Performance Measurement Methods

Research and Markets have announced the addition of the 'Achieveing Organizational Excellence Through the Performance Measurement System' report to their offering.

For years, companies have faced the arduous task of measuring performance. In this age of increased competitive markets and corporate goals that mandate increased revenue and profits, the notion of performance measurement has generated enormous interest. In the same respect, performance measurement has experienced great skepticism as well. The problem is that there is no single recipe or methodology that will ensure success in implementing a performance measurement system. Organizations have piloted and used a wide variety of systems, both informal and formal, but struggle with selecting the system that works just right for them.

Much of what is currently known about measurement is based on individual case studies, practitioner recollections, and anecdotal evidence.
Historically, performance measurement has meant measuring tangible things such as return on investment (ROI), cash flow, and cost of sales. In recent years, attention and focus have shifted toward measuring intangibles such as quality, customer satisfaction, and safety. In light of this transition, companies began investigating ways of incorporating both financial and nonfinancial performance in an effort to achieve optimal organizational well-being. Companies are trying to demystify the
whole idea of measurement, using modern methodologies such as the balanced scorecard and corporate dashboards.

Now, organizations are viewing performance measurement as a task for which all employees are accountable. The performance measurement system is increasingly being used as a business management model on which leading organizations are basing business decisions. Organizations influence employees to embrace measurement and become involved in the goals and results it yields. As organizations have sought to become more customer-focused, implemention of performance measurement systems, particularly their nonfinancial aspects, has become the focal point by which companies maintain a competitive advantage in the marketplace.

In further pursuit of best practices in this area, in June 1998 , with subject matter experts Clyde Boysen and Sam Shake of LeaderSHIFT International Incorporated (LII), conducted a third groundbreaking consortium benchmarking study in the area of performance measurement. This study, Performance Measurement: Achieving Organizational Excellence through the Measurement System, took a four-month-long look at leading practices in performance measurement. It revealed
interesting practices of leading organizations, such as how companies are integrating measurement goals with corporate strategic objectives and goal-setting. It also focused heavily on the collaborative uses of financial and nonfinancial measures to achieve organizational goals.
###