Performance Measurement: One Sample Framework for Selecting Measurements
Organizations try to manage the performance of each employee, team and process and even of the organization itself. The performance management process is very similar, regardless of where it is applied. Information in this topic describes the general performance management process. The information is customized for each application in the topics Employee Performance Management, Group Performance Management and Organizational Performance Management.
(This page is referenced from Performance Measures. Be sure that you have read Overall Goal, General Process and Key Terms before reading the following information. More will be said about measurement back in the Performance Measures section to be read after reading the following section.)
Conducting performance measurement requires a clear framework for ongoing guidance and perspective -- particularly when measuring the performance of a system as large and complex as an organization. Information in this section attempts to describe one such framework. (Note that there are other frameworks, e.g., the four indicators of the Balanced Scorecard, pillars of the Baldridge Award, etc.)
Sections of This Topic Include
1. Where do I focus my performance
efforts in the organization?
2. How do I identify which organizational results to measure?
3. How do I know what measures to make to evaluate results?
4. What about measures after I've made efforts to improve performance?
Related Library Topics
(Author's note: The publication "Performance Improvement Theory and Practice" (in Advances in Developing Human Resources, Number 1, 1999, by Richard A. Swanson) served as a very valuable resource while developing the contents of this library page. Professor Swanson's document suggests approaches that answer some basic questions when undertaking efforts to improve performance. I only hope my overview does justice to his fine presentation of ideas.)
Where Do I Focus My Measurements in the Organization?
Look for Domains (or Areas of Focus) in the Organization
Swanson suggests four performance domains in organizations, including 1) mission, 2) process, 3) critical performance subsystem and 4) individual. These domains suggest areas in which to focus improvement efforts. More explanation follows.
Mission Performance Domain
The mission is the ultimate purpose of the organization. The mission of the organization is identified or updated usually during strategic planning. Typically, reaching the mission requires providing certain outputs or services to external customers. Identify results by establishing units of performance with these products or services. Describe these results in terms of quantity, quality, time and cost. For example, results might be increasing marketshare by 25% over the next fiscal year, increasing profits by 25% over the next fiscal year or ensuring that at least 90% of unwed mothers under 18 years of age in the Hopeful Neighborhood can read and write.
Process Performance Domain
Swanson cites a process as "a series of steps designed to produce a product or service." Quality and reengineering efforts focus on the process performance domain. Swanson explains that processes typically cut across various subsystems. There are numerous processes in an organization, too many to mention here. Start by thinking about where problems have appeared in the organization, or where improvement will be needed to meet goals identified during strategic planning. To get in the mindset for identifying processes, think about, e.g., processes of market research to identify customer needs, product design, product development, budget development, customer service, financial planning and management, program development, etc.
Critical Performance Subsystems Performance Domain
This domain defines internal performance subsystems that always
directly connect to the internal environment, and frequently with
the external environment (the mission domain always interacts
with the external environment). These subsystems differ from processes
in that processes cut across multiple performance subsystems.
1. programs (implementing new policies and procedures to ensure a safe workplace; or, for a nonprofit, ongoing delivery of services to a community)
2. products or services to internal or external customers
3. projects (automating the billing process, moving to a new building, etc.)
4. teams or groups organized to accomplish a result or an internal or external customer
Individual Performance Domain
Swanson asserts that performance professions have generally focused too much on this domain. Individual performance management typically focuses on the individual working to achieve results and goals with some performance standard. These results and goals are recorded and referenced during a performance appraisal process. Ongoing training and development is provided as needed. Ideally, the supervisor and employee exchange ongoing feedback during the appraisal period to enhance the individual's performance.
How Do I Identify Which Results To Measure?
Look for System Outputs as Results to Measure
An organization is comprised of very complex and dynamic processes, coordinated by various structures and other controls. In addition, the organization is continually exchanging various resources and information with its external environment. Consequently, organizational performance management can be very complex. There are numerous results, measurements and standards to consider among the numerous levels and related areas (or domains) in the organization.
When thinking about results, measurements and standards in the organization, it helps a great deal to think of the organization as a system. This system has various aspects, including inputs, processes, outputs and outcomes. Ongoing feedback occurs among these aspects of the system. The overall system has various subsystems, e.g., financial management processes, departments, teams, employees, etc. Ongoing feedback occurs among aspects of these systems, as well as with the overall organization and its external environment.
As noted above, when looking for what results to measure, consider outputs from the system. Measure results in terms of units of performance, considering timeliness, cost, quantity or quality.
How Do I Know What to Measure to Evaluate Results?
Look for Outcome Measures and Driver Measures
Swanson describes outcomes as measures of effectiveness or efficiency relative to the core outputs of a system or subsystem. Outcomes are generic across organizations. Drivers "measure elements of performance that are expected to sustain or increase system, subsystem, process or individual ability and capacity to be more effective or efficient in the future" (p. 33). Swanson adds that drivers are leading indicators of future outcomes, and tend to be unique to the organization.
For example, a) management development and change, and b) employee's noticing the change and increasing productivity may be drivers to the outcome of c) increased sales.
Must View Outcomes and Drivers Together
Drivers and outcomes should be considered together. Otherwise, one gets a flawed picture of the performance system.
For example, focusing on drivers alone might lead one to believe that the driver (e.g., learning) always produces the outcome (e.g., units of sales). Focusing on outcomes alone might lead one to take short-term actions (e.g., massive layoffs) which adversely effect long-term outcomes (e.g., sales).
Classification of a Measure (Outcome and Driver) Depends on the Context
A measure can be either an outcome or a driver, depending on the situation. For example, a specified increase in customer satisfaction might be a driver for the organizational outcome of a specified increase in sales. However, the specified increase in customer satisfaction might also be an outcome measure for the Customer Service Department.
Consider Outcomes and Drivers Relative to the Performance Domains
For example, the performance driver measures of knowledge and expertise in the individual performance domain may produce the performance outcome measure of productivity for that domain. The drivers of innovation and leadership might produce the outcome of team effectiveness for the critical subsystem domain.
What About Measures After I've Made Efforts to Improve Performance?
Driver Results Assessment Matrix
There are a wide variety of results to measure and numerous types of drivers that can produce these results. It may seem much too complex to know what to measure and when. Swanson disagrees.
He explains that assessing outcomes from modifying drivers to affect performance improvements (that is, from efforts such as training people, instilling quality management, etc., made ultimately to improve performance) differ in only two basic ways: 1) predictability of performance results and 2) timing of performance results.
Four Types of Assessments of Outcomes
Swanson designed a two-row, four-cell matrix to depict four types of drivers, or types of efforts to improve performance.
Outcomes are known in advance and expected to occur soon. An example is training. Standard assessment techniques work well here.
Improvement efforts are rather straightforward, but take a longer time to show results. An example is management development. In this case, it's useful to develop a "pattern of events" (e.g., managers learn and change, employees notice and become more motivated, and ultimately sales increase). Each step of the pattern can be measured. Steps before the end result are drivers to measure. The end result is an outcome to measure.
Here, performance results may appear anywhere and take longer to appear. An example is developing a learning organization. Open-ended assessment strategies should be used. Emerging outcomes should be measured, since known outcomes do not exist. Conduct ongoing assessment over time and compare results.
Here, results are still less predictable, but they occur more quickly. An example is instilling a quality program. The same assessment approach used in Type 2 is useful here. However, measurements can be conducted sooner and usually only once.
Return to Performance
For the Category of Performance Management:
To round out your knowledge of this Library topic, you may want to review some related topics, available from the link below. Each of the related topics includes free, online resources.
Also, scan the Recommended Books listed below. They have been selected for their relevance and highly practical nature.
General Information -- Books About General Topic of Performance Management
- Field Guide to Leadership and Supervision in Business
- by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools to effectively lead:
2. Other individuals in the business
3. Groups and teams in the business
4. Business organizations
5. As well as all functions within the business organization.
Many of the Library's materials about business, leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.
- Field Guide to Leadership and Supervision With Nonprofit Staff
- by Carter McNamara, published by Authenticity Consulting, LLC.
Includes step-by-step guidelines, tips and tools customized for personnel in nonprofits to effectively lead:
2. Other individuals in the nonprofit
3. Groups and teams in the nonprofit
4. Nonprofit organizations
5. As well as all functions within the nonprofit organization.
Many of the Library's materials about nonprofit leadership and management are adapted from this book. Just click on the title of the book above to see the Index and Table of Contents.
To get more information about each of the following practical books, just click on the image of the book. Also, a "bubble" of information might be displayed. You can click on the title of the book in that bubble to get more information, too.