Performance Measurement

view media player

Key Idea

Like many organizations, your company may be using a formal performance measurement (PM) system—a set of strategic objectives and performance metrics (including KPIs) applied throughout the entire enterprise. PM systems enable executives to see how business results generated in the company's many different units combine to influence the enterprise's overall results.

Thus, a PM system gives executives and managers a comprehensive, high-level view of their organization's performance—and an understanding of how the company's different parts work together to produce business results.

In many companies that use a PM system, senior executives advocate adoption of the system and manage its implementation. But once the system has been established, all managers and employees in the organization contribute to and use it. But how? They define individual goals that support unit- and company-level goals, and they generate performance data that their supervisors then input into the system.