Key Principles of Performance Measurement:

Focus on the Customer;
Output Measures Assess Efficiency;
Outcome Measures Assess Effectiveness;
Employ a Combination of Output and Outcome Measures;
A Few Meaningful Measures - Concentrate on What's Important;
Use the Balanced Scorecard for Comprehensive View.

Performance Measurement is straightforward; you get what you measure, and you can't manage a process unless you can measure it. Measurement focuses attention on what is to be accomplished and compels organizations to concentrate time, resources and energy on achievement of objectives. Measurement provides feedback on progress toward objectives. If results differ from objectives, organizations can analyze the gaps in performance and make adjustments.

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Determining What to Measure:
Effective performance measures concentrate on a few vital, meaningful indicators that are economical, quantitative, and usable for the desired results. If there are too many measures, organizations may become too intent on measurement and lose focus on improving results. A guiding principle is to measure that which matters most.

Best Practices for Measured Success:
The following strategies and values are critical to the success of a performance based management system:

Management Support and Involvement from all levels in the organization to counteract resistance to change associated with introduction of new policies.
Appropriate Measures that include defining the goals and objectives, identifying the measures to be used, evaluating the costs and benefits, and then implementing the cost-effective measures.
All Related Tasks Inside and Outside of Departments must be included if people are to fully understand and effectively manage a particular process.
Start Small and Measure the Processes, not the People.  Fewer measures mean less initial cost; measures can be added.  Measure how well gateway tasks are completed, focus on results, not people.
Provide Feedback by using the measured results and celebrate improvements as well as the initiative to make improvements.
Periodically Review Each Measure to determine its usefulness and continued value to the company, department, team or upstream customer.
Be Patient.  Performance measurement is a long-term process and may have no immediate pay-off because of The Learning Process Involved.

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