6. Principles of performance measurement

 

A set of principles are required to be followed in order to provide a good development, implementation and operation of the performance measurement system:

 

1. It must support the organization's mission and its objectives.

2. A formal champion for performance measurement must be established to lead the development and implementation of a PM system across organization.

3. Development, implementation and integration of the PM system requires time, effort, skills/expertise and perhaps most importantly, the active support of senior management.

4. Performance measurement is designed to highlight achievements and reveal strategic and operational issues that hinder progress toward the attainment of the organization's mission.

5. Performance measures must be organized around the organization's planning and budgeting cycles. Performance measurement must be a continuous function, providing meaningful information at all times during the fiscal year.

6. A balanced set of performance measures must be developed that will provide a view not only of financial performance, but also of business results, clients and employees.

7. A clear set of roles and responsibilities must be established for the planning, implementing and maintaining the ongoing operation of the PM system.

8. A phased implementation process should be used to develop and implement the PM system, where one phase must be completed and approved before beginning the next.

9. There must be a cooperative and shared approach to the development and implementation of the PM system across the organization which specifies a common set of objectives, performance measures, and an agreed upon project plan. This approach must also specify methods to collect, analyze, interpret and report the performance measurement information.

10. Performance measurement processes must be adapted or created for collecting, analyzing, interpreting and reporting the performance measurement information for financial performance, business results, client and employee focus. These performance measurement processes must become a routine part of the organization's ongoing operations.

11. A "just do it" mentality must be adopted in developing and implementing a PM system. This involves using existing sources of information, avoiding costly development of information systems and employing workaround strategies when delays occur in the development and implementation of a PM system

12. Clarity of purpose: it is important to know who will use information, and how and why the information will be used.

13. Focus: performance information should be focused in the first instance on priorities of the organization – its core objectives and areas in need of improvement. This should be complemented by information on day to day operations.

14. The overall set of indicators should give a balanced picture of the organization’s performance, reflecting the main aspects, including both outcomes and the users’ perspective. The set should also reflect the balance between the cost of collecting the indicator, and the value of the information provided.

15. The performance indicators should be kept up to date to meet changing circumstances.

16. The indicators used should be sufficiently robust and intelligible for their intended use. Independent scrutiny, whether internal or external helps to ensure that the systems for producing the information are sound.

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