Performance

Measurement
Measuring and managing the performance of your
company entails you pulling away from your daily
routine, standing back and assessing the bigger
picture.
 When you stand
back and think about
what your company
does and how it does
it, you can more easily
determine how your
company is
operating….
….. which allows you to
address the shortfalls
and any other
problems that you
identify in the process.
Valuable feed back that will assist
you with:
• Improvements – by tracking performance, you will be able to improve
your systems, and address problem areas – for example, improving
customer loyalty.

• Planning and forecasting – are you meeting your goals? Do you need
to revise your budgets and forecasts?

• Competition-compare performance against competitors and industry

benchmarks, identify your weak areas and address them.

• Rewards/Incentives-by knowing whether goals have been achieved,

performance-related incentives or bonuses can be fairly distributed to
employees based on their direct reports.

• Compliance- measure performance so as to ensure compliance with

standards and industry based regulation.
Three aspects of measurement:

• Measure activity – a straightforward measurement

of activity in your business – ….x number of plastic
cups were produced this month….

• Compare results– comparing current and past

results

• To show performance against a pre-set goal-

compare performance against a pre-set goal of the
company
Understanding the terms used in
Performance Measurement:
• these are activities or processes that are vital for a
business strategy to be successful. Why would a customer
choose us? The answer would be a Critical Success
Factor, or ‘CSF’ – “because we provide customer service
Critical Success
via a 24/7 call centre…” (critical activity)
Factors

• this is a measure that quantifies management objectives,

targets and thresholds. Key performance indicators or
‘KPI’s’ enable the measurement of strategic performance.
• For example, a KPI would be the number of new customers
Key obtained this month. The threshold set would be “we need
Performance 10 new customers this month”. The KPI would be reached
Indicators if 10 new customers were obtained.
Example of Performance Measurement
Objectives

Mission
“to be the best retailer in the market”

Business Goal or Strategy

“Customer Satisfaction”
CSF KPI
“number of new customers
“activity: create obtained in a month” – set
efficient customer call target or threshold at 10
centre” new per month
 So how do I implement a
Performance Measurement
System for my Company ?
The first step: Define your company’s
strategic goals and objectives

Review the company’s strategic plan

Understand the vision and strategy for the
company
A comprehensive business plan would
assist you with identifying your strategies
and overall objectives
Once you have identified your business
goals, you will be able to determine what
activities to look at to measure, activities
that are critical to your success….
 Second step: Identify Critical
Success Factors (CSF’s)
Knowing your overall goal allows you to identify
key business activities or Critical Success Factors
(CSF’s), needed to achieve that given strategic
goal….

In our example, the goal is to increase customer

satisfaction…….

………...and a number of CSF’s you could

identify to achieve that goal would be to
“create an efficient customer call centre” or to
“reduce staff turnover” (customer’s prefer to
deal with the same sales person)…
Third Step: Decide on appropriate
KPI’s to use to measure your key
activities (CSF’s)
 ……. knowing your CSF’s allows you to put into
place the appropriate KPI’s to measure their
progress and efficiencies….

In our example, the KPI will be designed to

measure how well you are performing the
task of obtaining new customers or reducing
staff turnover…..by setting targets and
thresholds to be achieved and measured