Why do Performance Measurement Tools Work?

by Kent Jacobson

Published on this site: October 5th, 2006 - See more articles from this month

As a business owner, manager, quality professional or entrepreneur, performance measurement must be part of your basic business plan for improvement and continued success. A performance measurement tool allows you to establish minimum and great expectation levels against the goals set for individuals and organizations. A good set measurement tools provides a visual
representation of current performance levels against a specific set of goals. There are a number of good tools you can select from, investigate what fits into your business or individual preference, and then get started. What you will find verypositive after tool deployment and implementation, is the ability to communicate your priorities clearly. Additionally, visually represented data in a chart or graph is easy to explain, easy to understand, and it keeps people focused. Display the charts or graphs in a place that prompts people to stop and look and can even fosters discussion. Allow enough room around the display for group discussions and review.

A few examples of performance measurement tools are: Pareto Chart, Run Chart, and Histogram, Cause and Effect Diagram, Cycle Time studies or packaged SPC programs. The point is there are a number of tools available for your situation and implementation. If you have questions about application or usage of these tools, seek out quality professionals in your organization or go on-line and search for training and or product demonstrations. There are quit a few good reference web sites providing free information as well as links to professional quality organizations such as the American Society for Quality.

After you get your goals understood, measurement tools up and running, take the next step towards organizational communication and performance improvement by utilizing a scorecard or summary performance matrix. The scorecard is a simple summary matrixidentifying the overall key business goals and their respective performance indices. A lot of people refer to these performance matrixes as stop light charts, because of the incorporation of the colors red, green and yellow. If you incorporate red (poor), green (good) and yellow (marginal) highlights, the focus ofresources can be deployed to understand and correct the poorer performing indices.

The flexibility of the scorecard matrix allows alignment and deployment down through as many levels an organization as you see fit. The scorecard matrix allows integration of many indices vertically to the top company priorities. Normally, companies look at three general categories; financial, quality and customer satisfaction. Pick what your key business performance goals, identify how to measure, understand the data and reward the successes.

My check and balance before starting a performance measurement activity is simply asking: Am I sure this activity is meaningful and measurable? Good luck in reaching your goals and in continuously trying to find ways to continuously improve.



Kent Jacobson, a.k.a. "Mr. Success" is a trusted authority in the success field and provides valuable success information for free through his website at: http://www.Shortcut2Success.com . You can also read Kent's Success Blog to find more success secrets at: http://www.Shortcut2Success.com/blog