When measurement of performance is done in the right way it may transform an organization. Performance test is good as it can show someone where they are now and where they are hoping to go. Measurement of performance is fundamental to improvement, high performance and success in business or in any human endeavor. The context of the performance measurement affects the effectiveness of that performance. What makes performance measurement a success is that it is not socialized that is built positively into the social part of the organization.
Most employees do not trust the measurement systems in their organizations while most l...
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...eaders believe that performance measurement is important in achieving their goals. Organizational balance scoreboard comprises of the organization’s vision, mission, objectives, critical success factors, improvement actions, targets, improvement actions core values and mission. This scorecard is translated into the business scorecard, performance plans and the scorecard of each person in the organization.
This method also requires that each employee works towards the shared organizational strategy of the organization. A scorecard that is balanced will provide a framework for carrying out certain tasks in the organization but it does not specify the measures that should be take to improve the performance of the organization. The people in the organization are left to make the decision on the measures that should be taken and also specific sections within the organization should come up with measures to improve the whole organization.
The scorecard has four perspectives financial, learning, internal innovation and processes and the customer. Through this perspective it creates a more balanced view of the organization and by creating improvement measures under these headings no important sector of the organization may be left out. The success of the scorecard depends on how the measures are agreed upon, how they are implemented and the action taken upon those measures.
A case example of this is when the Citibank division had an innovation index to measure benefits of new products but the index was considered as insufficient and therefore there was need to come up with a more meaningful way of tracking the products and monitoring the progress of the products. The team that was assigned this task eventually came up with 12 key metrics that were to be used in measuring the performance of the products and monitoring their progress. The metrics included revenue from the innovation and the number of ideas in the innovation (Spitzer, 2007)