Balanced Scorecard Principles for Performance Measurement

Most of us have heard some version of the standard performance measurement clichés: “what gets measured gets done”, “if you don’t measure results, you can’t tell success from failure and thus you can’t claim or reward success or avoid unintentionally rewarding failure”, “if you can’t recognize success, you can’t learn from it; if you can’t recognize failure, you can’t correct it”, “if you can’t measure it, you can neither manage it nor improve it", but what eludes many of us is the easy path to identifying truly strategic measurements without falling back on things that are easier to measure such as input, project or operational process measurements.

Strategic performance measures monitor the implementation and effectiveness of an organisation's strategies, determine the gap between actual and targeted performance and determine organisation effectiveness and operational efficiency.

Good Performance Measures:

• Provide a way to see if our strategy and operational plan is working.
• Focus employees' attention on what matters most to success.
• Allow measurement of accomplishments, not just of the work that is performed.
• Provide a common language for communication.
• Are explicitly defined in terms of owner, unit of measure, collection frequency, data quality, expected value(targets), and thresholds.
• Are valid, to ensure measurement of the right things.
• Are verifiable, to ensure data collection accuracy.