Importance of Performance Measurement

Posted by Charles Wilson on December 3rd, 2022

Performance measurement is the procedure used to measure the efficiency and effectiveness or competence of projects, programs and initiatives. It is a methodical approach to collecting, analyzing and evaluating or assessing how on track a project/program is to achieve its desired conclusions, goals and objectives or aim. Performance measurement is typically done by an organization to demonstrate accountability, support decision making and improve procedures. Note that it is not a method that recommends or prescribes what must be measured; organizations essential to grow their own performance measures based on their project plans and situation.

Performance measurement should be preserved as an essential part of any planning procedure from the outset and should be made into any plan or project that has clear goals and objectives or aims. Performance measures deliver the information to assist in making strategic decisions about what an organization does and how it completes. Performance measurement outlines are flexible and can be used to measure the efficiency of a pilot project, a multi-year program or a strategic planning procedure and can be applied to a new or existing inventiveness.

Performance Measurement Areas:

If trying to choose what capabilities or area organization should focus on measuring, keep the focus on consumers, products and services, and internal team. Each department will have different performance measures, but the following are mutual across most organizations:

•          Consumer satisfaction rates.
•          Consumer to staff ratio.
•          Employee turnover rate.
•          Employee engagement and satisfaction rates.
•          Return on investment.

Why Performance Measurement is Important?

Performance measurement is important for fostering organizational improvement or development. The consequence of having an effective performance measurement procedure has only grown as businesses large and small realize that long-term success depends on accomplishment aims or goals with limited disappointment in today's highly competitive business world. The importance of performance measurement isn't always easy to justify, but it's needed or necessary for performance development in the long run. KRA and goal setting training helps to get key performance result areas and key performance indicators system which is very helpful for an effective and efficient organization. Effective performance measurement helps businesses to identify their strengths and weaknesses, top high performers, areas for development, and helps set benchmarks with historical data.

Benefits:

The benefits of measurement performance are numerous and range from measuring the effectiveness or the efficiency of a single project to contributing to a culture of constant improvement throughout an organization. Using performance measures on a regular basis helps to inform choices and means a plan can be familiar mid-course or priorities can be reset to take advantage of emerging opportunities. An internal performance measurement system will drive results and allow an organization to learn from its successes and failures.

•          Makes “buy-in” through stakeholders setting targets and goals together.
•          Grows “best practices” and “lessons learned” that can be useful to future initiatives.
•          Rises accountability by demonstrating the efficiency and value of plans and activities in accomplishing desired goals/outcomes.
•          Informs decision-making with budgeting and resource allocation in an environment where there may be competition over limited resources.
•          It helps to demonstrate and document changes over time.
•          It helps to communicate an organization’s story.
• Grows relationships through engaging stakeholders and building a mutual understanding of the procedure.