Documenting Performance Measure Drivers

Organizational performance measures help leaders drive behaviors, trigger actions, and create alignment. In addition to providing timely decision-making information, performance measures serve as mechanisms to quickly communicate results-based performance information throughout the organization. To maximize these benefits, however, effected organization members must understand what drives performance measure outcomes in order to properly interpret indicated results and appropriately act on them. Common understanding and interpretation of performance indicators is most effectively achieved through precise documentation and broad communication of their drivers and results.

Fundamentally, individuals initiate appropriate, deliberate action when provided with sound information on which to base their decisions. Useful information, not simply data points, is derived from performance measures when those interpreting the indicators clearly understand the key drivers of a measure’s outcomes including:

• what is the indicator’s purpose
• what is the indicator specifically measuring; including the data source and collection mechanisms
• what is the reliability/uncertainty associated with the data source and collection mechanisms
• how is the collected data processed; including calculations, indexing, unit conversions, and instrument gain adjustments
• how often is the indicator updated
• what other parameters are related to or influence the indicator’s outcomes
• how are the parameters indicated impacting other performance measures
• what is the indicator’s performance trend
• what was the indicator’s expected result
• do redundant indicators provide comparable outcomes

While not intended to be an all inclusive list, recalling from memory the above drivers for one performance measure would be a formidable task; knowing them for all of an organization’s performance measures, highly improbable. Therefore, a performance measure’s drivers should be documented in such a way that they can be easily accessed by those expected to interpret and act upon the indicator’s output. Depending on the indicator, this documentation could be contained in a desktop guide, user’s manual, procedure, or on the indicator itself.

Enterprise Performance Measurement

We can work with you to assess and improve your performance measurement system; yielding metrics and reports that are operationally relevant, organizationally consistent, and economically implemented. The resulting system helps improve managerial decision-making, organizational alignment, and individual accountability. Learn more about how we can support your implementation and upgrade efforts or contact us for a personal consultation.