Performance measure
Definition
A method to compare the efficiency and quality of a KM system against the set goals
Summary
Description
Performance measures are based on quality management principles, meaning that they pinpoint goals, measure performance and communicate feedback to those observing and performing the work and reinforcing behaviours of process performers. Pinpointed goals means they are:
- Measurable;
- Observable;
- Attainable — the measure can be directly influenced by those being measured; and
- Understood by all and relevant to those being measured.
Four factors are considered in an effective goal-setting process:
- Past performance;
- Organizational capability;
- Required minimum performance for organizational survival; and
- Considerations for competitiveness (comparison to similar organizations).
Performance measures are needed for feedback and should be objective and help to create accountability within the organization. Communications attributes for performance measures include them being:
- Specific;
- Immediate;
- Positively expressed;
- Self-administered from the source of the data;
- Presented in appropriate timeframes relative to organizational goals (clarity in past performance, current status and expected trend for performance projection);
- Useful (adds value relative to the time taken to collect the information).
Visual feedback is most effective for display of performance measures. Displays showing trends are normally graphical in terms of format. Good attributes related to the display includes them being:
- Attractive and creative;
- Annotated for the ‘Is better’ direction;
- Annotated as to the expected goal to be achieved;
- Convenient and accessible;
- Easily understood and simple;
- Up-to-date;
- Owned by the responsible staff member, performer or manager;
- Posted publicly in the workplace;
- Tailored to the audience; and
- Collected and analysed in a cost effective manner.
Reinforcement of correct behaviour is very important to success. When done consistently it will increase the rate of performance improvement. It should be based on complimenting the performer when the proper behaviour is occurring, especially when the results are also being achieved. Compliments and other rewards are best received when management understands the type of reinforcement specific employees enjoy. It is the ownership of the results and exhibiting the behaviour to get there that make performance measures so important.
Refer to Fig. 7 for process design basics. When designing a process Start with customer requirements, then develop process outputs, then design the process, then determine inputs and finally determine what must come from suppliers. Overall goal should be ‘Acceptable quality at minimum cost’; this is the definition of ‘Optimum’ nuclear generation quality performance.
Each process is characterized by inputs, process steps and outputs. Process output performance measures are used to describe and document one or more of the following:
- Productivity (quantity, efficiency, timeliness, productivity rate, throughput = production minus waste);
- Quality (accuracy, ease of use, appearance, reliability);
- Cost (labour, materials and overhead as expressed in unit cost — (Cost/Quality of production Time). Example: Dollars per Mega-Watt-Hour;
- Cycle time (the time to execute the process once — avoid process constraints or ‘bottlenecks’).
Process performance measures may be classified as being either:
- Process output measures; or
- Process diagnostic (internal process) measures.
Please refer to Fig. 8 which shows internal process and process output measures.
The most important performance measures may be referred to as ‘Key Performance Indicators’ (KPI). These are usually the ones that are monitored by executives and reported to industry leaders and regulators.
Related articles
Measure, Performance indicator, Knowledge management performance model
Synonyms
Metric, Key Performance Indicator (KPI), Key Success Factor (KSF)
