Developing Performance Measures

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StrategyDriven Organizational Performance Measures Article | Developing Performance MeasuresA performance measure is a quantification that provides objective evidence of the degree to which a performance result is occurring over time. There are many definitions of performance measures, but this one accurately and broadly elucidates the meaning of the concept. In long term-projects, even short-term ones, it is imperative to have a system through which results are measurable. For this reason, performance measures are quite necessary.

Specific Advantages of Performance Measures

  • Productivity Increase: One great advantage of having performance measures is that it increases productivity in any given task or project, especially in a team.
  • Setting Standards: Performance measures can be instrumental in setting standards. For instance, by measuring performance, a person would know how much they can achieve over a given period of time. The assessment of this ability can help set the standard the next time the said task is performed in the same organization or a different one.
  • Determining Strength and Weaknesses: In an organization, setting up measures to track the performance of different tasks will help to determine which tasks employees are better at. This is a great way to foster specialization and division of labor; ultimately leading to effectiveness and productivity.
  • Supports Communication: Having metrics to measure performance ensures that individuals in an organization are more transparent and work as a team.

Types of Performance Measures

There are different types of performance measures. All these measures could provide a relatively accurate description of results. They can be categorized into the following: input measures, output measures, outcome measures, efficiency measures, and explanatory information.

  • Input Measures: Input measures comprise the resources consumed by a project such as the money and time spent. For instance, if the employers in a firm work an eight-hour shift daily, it makes up part of the input measures.
  • Output Measures: Output measures can be very clear. They simply depict the amount of work that has been executed as a result of the input. Comparing the present output with the former one can be instrumental in measuring standards and how employers work in different circumstances. Output measures usually consist simply of numerical values.
  • Efficiency Measures: Efficiency is depicted by the amount of work performed compared to the number of resources used in doing the work. It is expressed in units. Efficiency measures are not always very effective because there are usually a lot of factors affecting performance other than the variables involved in efficiency measures
  • Explanatory Information: Explanatory information simply involves other factors that affect the performance of an organization in any given situation. These factors might include environmental factors, incentives, the motivation of workers, etc.

StrategyDriven Organizational Performance Measures Article | Developing Performance MeasuresProcesses and Steps involved in Creating Performance Measures

The process of developing performance measures can involve many steps. Many different experts have propounded several theories to achieving this result. Here are some of the most important activities to engage in to arrive at a reliable measurement of performance in the long run.

1. Collecting Stakeholder Information

The developmental point of collecting performance postulates that the information and opinions of the stakeholders involved in the process are collected. Cambridge Dictionary explicitly defines a stakeholder as a person such as an employee, customer, or citizen who is involved with an organization, society, etc., and therefore has responsibilities towards it and an interest in its success. The list of stakeholders includes the following people:

  • Members of staff at all levels.
  • The customers or clients of the organization. If it is a public office, the information should be collected from the people being served.
  • Policymakers; are the people at the helm of affairs whose decisions affect the running of the organization.
  • The financiers of the service or the organization.
  • The evaluators of the activities of the organization.

This step is necessary because your stakeholders are the people who are most interested in the activities and success of your organization. Their opinions and suggestions are important to the running of the organization. Also, collecting stakeholder information helps you to know what they want from you. Through this, you can streamline your objectives and measure performance according to them.

2. Incorporate Various Types of Performance Measures 

To arrive at a holistic evaluation of the performance of the people/persons in a task, the types of performance measures listed above should be incorporated into your performance measurement. Nevertheless, this depends on a few other factors such as the type of project being executed. For instance, a holistic approach is not paramount if the task being carried out only affects one small unit of the organization.

3. Promote Top Leadership Support 

There is a high tendency that lower-level staff in an organization will not be in support of performance measures. Therefore, the topmost leaders have to regularly encourage the use of performance measures and bring the other staff members on board. If feasible, the leaders should also be subject to performance measures like the mid-level staff and other personnel. This exemplary effort will ensure that other staff members feel more comfortable in the use of performance measures to evaluate their work.

4. Establish Long-term Goals and Objectives 

Goal-setting is arguably the most important part of developing measures. What is the end goal of the project that your organization is involved in? By identifying these, you can develop measures that particularly check for them. Most projects in which performance is measured are usually long term. Hence, it is even more difficult for all the people involved to keep sight of the end goal. This can be made easier by documenting the objectives so that they can be read regularly by all the stakeholders.

Long-term goals can be documented in the form of a mission statement. The mission statement should be documented in clear and concise terms to ensure that all the parties involved understand it.

5. Establish Short Term Goals to Help Attain the Long-Term Goals 

Long-term goals are relative. Achieving long-term goals in some situations could take a few years. Therefore, special attention should be given to short-term goals. Firstly, the short-term goals should be formulated in line with the long-term goals. The achievement of short-term goals regularly by all the people involved in the process builds up to the achievement of the long-term goals. Again, the short-term goals have to be in line with what is hoped to be achieved in the long run.

In setting and matching goals, we can depend on the SMART acronym. SMART stands for specific, measurable, achievable, relevant, and time-bound. Professionals from different fields have used this acronym in many different situations and it has proven effective. If your goals fulfill the criteria in the acronym, there is every tendency that it is feasible.

6. Establish Performance Targets 

This is achieved by taking a look at past performances and comparing them to the present. In developing performance measures, it is important to have already set standards. These standards are gotten from previous tasks and projects.

7. Create a Simple Approach 

This step involves the following activities:

  • Ensure that your measures match your goals and objectives.
  • Take all the time needed to perform tasks.
  • Keep the number of measures you use at the lowest.
  • Decide what level of performance defines success.
  • Ensure that you possess enough resources for the project.

Conclusion

Developing performance measures can be very advantageous, especially in the long run. Nonetheless, it is important to ensure that the performance measures we use are effective and result-oriented. Note that the use of performance measures can also have some disadvantages.

About the Author

StrategyDriven Expert Contributor | Tiffany HarperTiffany Harper is an experienced writing guru who’s been working in the B2B sector for several years now. She loves to share her thoughts through blogs and social media. For her love of writing, she also provided some consultation while working with dissertation writing services from Assignment Masters.

Developing Performance Measures

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StrategyDriven Organizational Performance Measures Article |Performance Measures|Developing Performance MeasuresIn any industry, businesses pursue profits as a measure of success. However, profits can disguise many variations in effectiveness behind the scenes. In competitive sectors with a confluence of variables, businesses need strategies that reveal their performance over the long term. Without this, businesses will be adrift, lacking in focus or direction whilst their competitors get ahead. Developing performance measures is essential to allow businesses to develop strong strategies and continual performance at the top of their industry.

What Are Performance Indicators?

Performance indicators are deliberately structured measures to gauge your company’s performance in the long-term. Performance measures will have to be curated to the unique environment in which your company operates, the markets you’re operating in and the specific challenges of your sector.

“Once KPIs (key performance indicators) have been identified and constructed, they will help to determine the direction and focus of your business in its finance, operational and strategic objectives,” says Leonard Johnson, a writer at Last Minute Writing and Writinity. “These are key to a business’s continued high performance as well as the contextualization of your company within its sector.” Without KPIs businesses are adrift, lacking a sense of their direction and performance. Let’s take a look at how to effectively develop performance measures.

Identify Outcomes

To have meaningful performance measures, an organization needs a sense of the outcomes it wants to achieve. Rather than using abstract concepts to guide your strategy, find objective results that have clear indicators of success. Make sure that everyone on the team understands how each outcome is being understood as individuals can have radically different interpretations when it comes to identified outcomes.

StrategyDriven Organizational Performance Measures eBook

Compare Measures

Recognizing that there are multiple measures for different outcomes enables you and your organization to select the measures that best express your objectives. “When comparing measures, you should be asking whether results can be measured directly or if you need a secondary measure that indicates performance in certain strategies,” says Jerry Dubose, a KPI expert at Draftbeyond and Research Papers UK. “If results can’t be measured directly, how you assess your performance can be based on the performance of indirect hypotheses that are linked to your outcomes.”

Tailor Measures To Objectives

When selecting the final measures your organization will use as performance indicators, there are a few criteria to consider. Metrics for your performance should be able to answer key questions about the orientation of your organization’s strategic decisions as well as providing actionable information that can guide future strategy. Negative consequences of your measures should be kept to a minimum, such as laborious data collection or incentivizing employee behaviour that “shortcuts” the objective.

Define Targets

Equally as important as selecting accurate performance measures is the process of defining the organizational targets your company needs to achieve. Targets should be aspirational, yet realistic and encourage everyone working in the organization to optimize their performance.

As well as identifying targets, a number of thresholds can be created with different action plans indicated by each. A minimum performance threshold can be as valuable as an aspirational target, or more so, when measuring organizational performance. A traffic light system of red, amber and green target/thresholds can provide a valuable visualization of performance as well as a motivator for when action and strategy needs to adapt.

Document Performance

Lastly, performance as related to defined outcomes needs to be documented. These documents can be issued quarterly and will become valuable for reflection on past performance as well as an indicator of future trajectory. Documentation should be systematic and complete – a data definition table provides an excellent structure for overarching documentation of performance. Software can streamline performance documentation as well as create compact performance reports that will indicate how strategy is performing.

Wrapping Up

Developing performance measures should be a cornerstone of every business looking to secure their future. In a fast-changing world, organizations need to have a strategic approach to development and objective ways to assess their performance, otherwise fluctuations in market environments can catch you out. This approach to developing performance measures, as articulated in the article above, will strengthen your business and enable resilience in the face of an unpredictable world.

About the Author

StrategyDriven Expert Contributor |Ronald CainRonald Cain is a tutor at UK Essay Writing Services. He is a professional writer, a blogger, and a contributor to Gum Essays. His passion for communication and organizational strategy has led him to roles which support businesses in achieving selected outcomes and, for Ronald, nothing comes close to the thrill of success in a competitive environment.

How to Develop Performance Measures?

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StrategyDriven Organizational Performance Measures Article |Performance Measures|How to Develop Performance Measures?Have you ever thought of improving the quality and productivity of your organization, achieving set goals, and recognizing hard-working employees?

Well, one sure way is by developing the right performance measure.

Organizations often measure employee performance to achieve set goals. Most times, determining how to develop the right Key Performance Measure (KPI) may lead to hassles and failure that might bring unwanted results. However, it is important to develop the KPIs using the right approach as it aids better decision-making, makes employees more responsible for achieving set goals, evaluates the growth of the business better, and manages the employees’ performance better.

Steps to develop performance measures

1.Familiarize with the concept of performance measure/What is KPI?

It is needless to say that the misconception of KPI is a common organizational problem. Organizations need to comprehend what KPI is all about so they can apply it correctly. KPI is not a data collection strategy, nor is it an employee productivity tool.

It is the value of the numeric work input and evidence of the reoccurring performance result. Simply put, KPI refers to the reliable data generated from the efficiency of programs. After a proper understanding of the subject matter, other processes would yield better results.

2. Evaluate the KPI’s Criteria

If your company has existing KPIs, it is advisable to conduct another review on it and select the one that would yield better results based on the performance measurement. However, if you don’t, you should create strategies according to your company’s achievable goals.

The goals must also align with the measures and must be proven to work efficiently, i.e., someone else must have used this plan. The measure must also be understandable, inspirational, and capable of being regularly tracked. Remember to keep the measurements lesser in numbers and detailed.

StrategyDriven Organizational Performance Measures eBook

3. Set Measurable Goals

Your company’s goals should be specific, clear, realistic, and understandable. All this aids an excellent performance measure with meaningful results. Try to make the objectives less action-oriented, vague, and multi-barrelled. Instead, write about intended results with precision, and list your goals separately. Setting up small goals is better for a start.

4. Be Deliberate

While developing your performance measurements, employ the deliberate technique rather than a brainstorming one. Visualize the end, evaluate the potential measures that expose the capability of achieving positive results, and look at the bigger picture. This would allow you to decipher what is being measured and take your stance regardless of the unforeseen circumstances. It should be visible, countable, and measurable.

5. Let your supporters buy-in

Without those who support and understand your performance measure, your KPIs would not get the required attention. To make your KPI meaningful, you have to put them into use. They would fulfill the purpose by building buy-in with those you have been working alongside.

Building buy-in is by creating a measure team and ensuring that they comprehend the problems and how the KPIs work. Also, build an open environment where others can critique and give feedback on the KPIs.

Required characteristics for performance development

Before developing the KPI’s, there are some characteristics an organization should possess; they are:

  • Target An organization aiming for success should have some achievable targets within a specific period. The period may be within six months or annually
  • Measure The measure and the target work together. Measure here may refer to the number of acquired customers for the various products and services. Set a means to achieve the target.
  • Frequency The review of the KPI’s progress should be done regularly. It could be on a monthly or weekly interval depending on the nature of the target
  • Data Discover where your data would come from, as this would boost your progress level. Discovering this would prevent a waste of time.

Conclusion

Developing performance measures is an essential business tool to achieve your organizational goals. It also goes a long way to fulfill other organizational needs like setting realistic goals, recognizing employees’ hard work, timing employees through task timer online, and building a supportive team that understands your business challenges. You can try out our opinion on the steps in developing a performance measure, leave questions on where you need clarification, and tell us about your views.

About the Author

StrategyDriven Expert Contributor | Lori WadeLori Wade is a journalist from Louisville. She is a content writer who has experience in small editions, Lori is now engaged in news and conceptual articles on the topic of business. Time management is critical to career success. That is why she uses the task timer online to stay in the lead at all times. If you need more tips on time management, entrepreneurship, or leadership, you can find her on LinkedIn.

Measurement of Success in Business

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StrategyDriven Organizational Performance Measures Article |Success in Business|Measurement of Success in BusinessSuccess in business can be a difficult concept to grasp. Success means different things depending on your industry, your products, your market and, most importantly, your goals. But just because it’s a broad concept, doesn’t mean there’s not a methodical way to measure success.

The crux of measuring success in business is quantifiable, trackable metrics. It’s all well and good to feel like you’re doing a good job, but if you can’t prove that to your shareholders that feeling isn’t much use. Knowing how to measure your business’ success rate can improve how you fare against competition and determine how quickly your business grows. Here are a few of the most common ways businesses measure their success, and some tips on how to implement them in your work practices.

Sales metrics

This one might seem obvious to many companies engaged with sales, but tracking your sales data is an essential way to determine business success. Naturally, as with any data there are many ways you can go about this. But whether you track the volume of sales, the frequency, the time of day, or which products are most popular, use that data to help measure your sales success rate.

One key tip is to break down your data into various sections. Sales, be they online or offline, generate huge swathes of data that is hard to wade through at the best of times. Trying to use gross data to determine your business success is giving yourself more work than necessary. Instead, think about how you can divide that information into something you can act upon. Take a look at customer demographics, and whether certain products are more popular in certain areas. You can then use that information in a future action, say, developing a targetted marketing campaign, track the change and easily measure its success.

StrategyDriven Organizational Performance Measures eBook

Net income

Another obvious one, your business profit is a clear marker of how financially successful your business is. Profit is purely the money left over from revenue after expenses have been extracted, it’s a fact of life for pretty much any business in any industry. How you manage your expenses versus your profit will be an indicator of how you manage your business as a whole.

It’s important to have a consideration for profit, even for small businesses and startups. As much as you should expect to be in the red from time to time, you should be consistently planning for profit in other times.

Leads Generated vs Leads Converted

Finding leads is an essential part of most marketing-driven businesses, but tapping the potential of these leads is a different matter. You can find a thousand potential clients a day, but if none of them result in actual clients then your work has achieved nothing.

Karlie Fiorina, a business manager at Essay Service and Revieweal, offers that “keeping track of your converted leads will let you know which of your actions work and which don’t. For example, you may find that your leads from email are far more likely to become customers than those from direct mail. Use that information to direct your resources and attention when it comes to marketing.”

You Can Get Satisfaction

Success in business isn’t just about profit margins, it’s also about how satisfied shareholders are in your business. Yes, some of that will be determined by profit margin, but there are a myriad of elements that can affect how your business is perceived. Satisfaction can be determined through surveys, feedback forms and reviews.

Bear in mind that satisfaction is not a one way street. Birk van der Beck, a career coach at UKWritings and AssignmentHelp, points out that “while customer satisfaction is usually more talked about, employee satisfaction is equally, if not more, important. A satisfied and engaged workplace will be more productive, more innovative and, eventually, more successful.”

Goals, goals, goals

The subtitle on all these points should be about setting goals. There are hundreds of ways you can measure the success of a business, but putting those measurements to use means setting yourself goals. How to set a reasonable but challenging goal is the subject for another article, but make sure you consider how your metrics can inform your future business decisions.

About the Author

StrategyDriven Expert Contributor | Katherine RundellKatherine Rundell is a business writer at Big Assignments and OXessays services. She writes about business, finance and project management, amongst other things. She is a keen reader and a blogger at Essay writing services reviews.

7 Metrics to Help you Measure Success and ROI in Business

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StrategyDriven Organizational Performance Measures (OPM) Article |Business Metrics|7 Metrics to Help you Measure Success and ROI in BusinessA Business metric is a useful way to understand and analyse the tracking of a business process. A business analyst should focus on metrics to measure Return on Investment (ROI) to make the business operation’s success.

You will get to know whether your company is getting the intended results or getting back to the drawing board. Measuring business success is quite challenging for many. You have to evaluate your business, define your goals, set key performance indicators (KPIs) for the objectives set, and then measure and track these KPIs. Let us cover some useful metrics that you can employ when measuring success.

Customer Satisfaction

Customer satisfaction is an essential tool in measuring your business success and marketing campaigns. It is possible to get feedback from your customers directly by adding consumer surveys to your site. This helps you in knowing your customer’s needs meaning you can tell your customers’ satisfaction rate.

You can learn what they don’t like about different facets of your business. For example, you can tell the reasons they visit your site, and if it leads to conversions. This significantly helps you in strategizing more effective marketing campaigns. Also, paying more attention to them will go a long way since your visitors are your target audience.

Customer follow-up can also be done by sending them things like an email asking the customer to rate your services. This is important as it helps in keeping your customers more satisfied.

Website Traffic

This is simply the number of visitors landing on your web pages. More users translate to more traffic to your site. Remember, your website serves as the face of your brand and your home base. The primary traffic sources are search, direct campaign, and referral. Your site may have traffic from campaigns such as banner ads as well.

To increase traffic to your website, optimize all pages on your site with relevant keywords, and boost your website security. Besides all, security plays a vital role in drawing traffic to the site, and for that, you should buy a cheap SSL certificate to help secure your web users. This will encourage more transactions because users are becoming wary of online web security. More users will only transact on safe business sites.

Cash Flow Levels

This is the measure of the difference between cash inflow and outflow. Cash inflow levels are dependent mainly on the nature of your business. For instance, you will need more cash in hand if you run a convenience store. Cash flow accounts for all the money that comes in the form of investment and goods returned, and sales revenue.

StrategyDriven Organizational Performance Measures eBook

Employee Satisfaction

Your employee’s satisfaction is as important as your customers’ satisfaction. Yes, your employee’s morale is correlated directly to business success. A much satisfied and motivated employee could turn into a more productive and effective employee. Keeping your employee’s satisfaction levels high leads to a long commitment to the company and the team.

It is essential to check whether your employees feel rewarded and are satisfied with their work. To determine your employee satisfaction, conduct team surveys to collect feedback on the teamwork and HR to collect personal satisfaction levels. You can improve your employee satisfaction by introducing some perks such as free office coffee, creating an atmosphere for work and growth, etc.

Net Profit Margin

The main aim of any business is to earn a profit. This metric shows how your pricing and total sales volume impact your business in terms of the costs contracted: the lower your profit margin, the lower or higher your cost. Your profit margin calculations should include variable expenses paid regularly, such as utilities, insurance, taxes, and salaries.

It would help if you diminished the cost in case of losing profit ratio. If you happen to make more profit than you were previously, this means that your customer base is expanding, and your sales have increased. Understanding your revenue will give you crucial insights into your business.

Customer Retention

The essence of customer retention is to keep as many customers as possible. Having loyal customers is beneficial as it helps to grow your sales and create awareness more about your services.

The retention rate shows the number of clients who make repeat purchases and use your product over an extended period. Retaining customers is achievable by having things like special rewards or customer loyalty programs for old customers.

Number of Sales

Sales indicate whether people are interested in buying your product or service. They also tell us whether your marketing efforts are paying up. However, the number of sales can be affected by other factors like recent market changes.

Sales metrics can be measured in the number of purchases made directly from the site. To increase your sales, one can hire new talent, expand your marketing goals, or introduce irresistible discount offers.

Wrap Up

This guide has provided you with a few metrics that can help in kick-starting your growth journey. You can pick some of the essential metrics based on your needs for better and effective operations.