Performance indicators

This chapter focuses on how to design appropriate performance indicators. It explores the role of measurement in organizations and why we need indicators. A key challenge is that many of the things we would like to measure are inherently difficult, if not impossible, to measure. I therefore take a look at the limitations of measurement and its implications for the usage of performance indicators. This chapter then outlines how to design meaningful indicators and collect the relevant data that allows organizations to assess and challenge their strategy. Questions addressed in this chapter include:

Why do we need performance measures?

What can we really measure, and where are the limitations of measurement?

What implications do the limitations have on the usage of measures?

What is the difference between measurement and assessment, and between a measure and an indicator?

How can we design meaningful performance indicators?

How can we collect and report relevant performance data?