Benefits of a PM system
Performance measurement systems offer numerous benefits. Most important:
- They enable managers to define (and track performance on) metrics for every strategic objective set by their unit and company. By noting performance that falls short of targets (for example, "Our goal was to reduce order-processing errors 10%, but we only reduced them 5%"), managers can address the causes of the shortfall and work to continually improve performance.
- They show how performance in different parts of the company affects performance in other parts.
For example, a company may discover that having the logistics staff achieve the objective "Accelerate order-delivery time by 10%," helps the customer service group meet its objective "Increase customer satisfaction by 15%."
By seeing these interrelationships, companies can make more informed decisions. For instance, they can increase a budget, add new hires, or introduce a more efficient process to improve performance—instead of guessing which factors need to be addressed.