Performance Measurement Systems
Over time, performance measurement metrics have evolved. Departments and people found it hard to relate performance to finance and accounting results alone. And they wanted more specific, actionable data: measures that were predictive and motivated certain actions, systems to monitor external factors such as customers, competition, and markets. Some wanted to track the progress of the firm’s degree of innovation. What emerged was a comprehensive measurement and feedback system most commonly known as balanced scorecards. There are many versions of scorecards. We focus on the proper use of measurements and the critical design consideration necessary for successful scorecard implementation.
Recognizing the Power of Non-financial Measures
With an increasingly complex business environment, financial metrics alone were not capturing true performance. Managers encouraged by the use of such non-financial measures as productivity, speed, quality, on-time delivery, and customer satisfaction were...