you're reading...

Best Practice in Performance Measurement

At the Centre for Business Performance here at Cranfield University School of Management, our team have many decades worth of combined experience in researching and advising organisations on performance measurement and target setting. We have tapped into this expertise and distilled for you what we consider the critical elements of creating, reviewing, and acting on performance measurement information.

Please let us have your comments below.

A. Creating Performance Measurements

  1. Only measure what is important for your organisation’s success. Ensure all operational measures and targets are aligned with your strategic targets. Don’t create more than about 5 (10 tops) at any level.
  2. Know what you’re using the measures for. Is it for compliance with someone’s needs? To check on a situation? To challenge the status quo?
  3. Check that all measures are achievable. Never impose a target without a test-drive on the shop floor. Also make sure they are clear to everyone tasked with achieving them – check back with everyone on this.
  4. Use both qualitative and quantitative measures together. This will reduce the risk of gaming.
  5. Know how much it costs to measure. Is it worth it?
  6. Tell everybody in the organisation what the measures are for and why they matter.
  7. Measure at least these: customer satisfaction, employee engagement, and operational effectiveness.

B. Reviewing Performance

  1. Review performance against measures regularly and formally. Do this at least once per year.
  2. Give clear, constructive and timely feedback. Check back that your feedback was received as you intended it.
  3. Involve not only managers and supervisors in reviewing performance. Get everyone involved in reviewing performance: of their own performance, of their peers, of their supervisors.
  4. Don’t just review people’s performance, also regularly and formally review the measures you use.
  5. Involve those tasked with achieving targets in this process also. Invite feedback on measures, and communicate the results from this process to everyone in the organisation.
  6. Remove all outdated or unhelpful measures as soon as you discover they are no longer appropriate.
  7. Introduce rewards only when the performance measurement system is sufficiently robust. Use them to strengthen the message that measures matter.

C. Acting on Performance Information

  1. Use measures to learn how to improve performance in the organisation as a whole. Use this information to ask better questions, not only to help answering any specific questions you already have.
  2. Update all your people (at all levels and departments) regularly on performance: good and bad.
  3. Don’t blame individuals – it is invariably the system at fault. Ultimately, you are responsible for creating a system that enables performance.
  4. Remember: change takes time. Set achievable targets, including those for shaping an effective Performance Measurement System.
  5. Celebrate your organisation’s success widely.


7 thoughts on “Best Practice in Performance Measurement

  1. Just remember – measurement can be a great stimulus to your organisation or a shackle depending on how you use it. Measures that enable you talk about performance and learn from what you are doing are a great help. Measures that are supposed to drive performance are easy to usurp and work around. So be very clear why you are using measures and how you use them

    Mike Bourne

    Posted by Mike Bourne | May 8, 2013, 2:04 pm
  2. Thank you Mike!

    Here’s a 60 sec clip version of our top insights on setting performance measures:


    Posted by Jutta Tobias | June 2, 2013, 4:07 pm
  3. There’s a growing body of work in Performance Management on the coach approach to PM. I was curious to see that missing here. And very curious about the comment that “Invariably the system is at fault.” Any further comments on that? Measurements are one performance lever, but I’ve found I got better performance results from people when I began looking more toward motivation, state of mind and mindsets for change. Dan Pink’s work on Motivation is a great case in point.

    Posted by Elese Coit | June 4, 2013, 12:09 am
  4. Thanks for your comments, Elese. Here are some thoughts on this:

    1. Performance measurement itself doesn’t improve performance, it just tells you what performance is and what the target is. This can focus attention on an issue but we need other mechanisms to improve performance.

    2. Coaching for performance is of course helpful, but who are you coaching? What is the purpose of that coaching?

    Let us take an example of someone being coached to do a better job – say, a sales person or a call centre operative. These people can all be coached to perform better in their role and this can have a positive impact but this improvement is constrained by the system in which they work.

    3. Let us take another example, a manager. Now if we use a Time To Think approach such as Nancy Klein suggests, we can get someone to think about how the whole performance measurement and management system works and how it can be changed for the better. In this way, we are enabling everyone who works in the system to perform better. That can have a much wider impact than focusing on individual performance only.

    So measurement isn’t a lever to pull to improve performance, it is the mechanism that should be used to trigger other performance management approaches.


    Posted by cranfieldcbp | June 6, 2013, 9:47 am
  5. Thanks for the discussion. I manage the Centre for Business Analytics and Performance at the Telfer School of Management, University of Ottawa. Everything you’ve said here rings true. One thing to add: how measures are used can depend on the type of people we have working in the organization. In general, they should be used as discussed: review performance against targets, use the results as a trigger to conduct root cause analysis or to more closely examine the targets (in situations where the “target to actual” variances are continuously positive) etc., “High achievers”, however, react differently to measurement than do “low achievers” (the psychological literature refers to people who are “motivated for success” versus those “motivated to avoid failure”). Coaching then, can take on a variety of different flavours depending on the person being measured.

    Posted by Gregory Richards | June 17, 2013, 1:27 pm
    • This is an interesting and valuable addition, Gregory, many thanks for raising this.

      In our work at Cranfield related to coaching high achieving executive students for performance, we have also found it useful to be mindful of where individuals stand in relation to performance coaching at a given point in time.

      In other words, sometimes a person is more motivated for success, at other times the same person is motivated to avoid failure, depending on the task context and their prior history.

      In these situations, we have found it helpful to apply Acceptance and Commitment Training (ACT) principles (one of the most rigorously researched and evidence-based coaching techniques available today) and focus on “functional coaching” strategies when we work with individuals who are less motivated to hear the performance coaching in the first place.

      This means that we meet a person where they are, respectfully accepting any reticence to conduct root case analyses of why they have performed below par, and instead focusing on exploring forward-looking strategies that are “functional” – in other words, tools that have the explicit function of helping them perform better immediately.

      What we find particularly helpful in these cases is a focus on performance coaching that frames the performance discussion around becoming curious and open about which work behaviours are most aligned with the individual’s personal values, so that the coachee can become motivated to do things s/he actually cares about personally.

      Interestingly, that curiosity and openness needs to apply to both the performance coach and the coachee (this is the “beginner’s mind” that mindfulness experts talk about so often but that at least for myself sometimes requires a great deal more humility than I’m used to).

      Posted by Jutta Tobias | June 20, 2013, 1:12 pm


  1. Pingback: Best Practice in Performance Measurement | SoMResearchInsights - May 1, 2013

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: