Monday, June 6, 2011

3 Performance Measurements Traps to Avoid

“Don't lower your expectations to meet your performance. Raise your level of performance to meet your expectations. Expect the best of yourself, and then do what is necessary to make it a reality.” - Ralph Marston

Few performance assessment systems measure what really matters: current and future performance. Here are three of the biggest sins when it comes to measuring your organization, and how to avoid them:

  1. Focusing only on you. Don't compare your company to itself; you need to know how you are doing relative to competitors. If this data is not easy to come by, bring in an outside expert or ask customers for their perspectives.
  2. Focusing only on the past. Beating last year's numbers is not the point. The numbers need to tell you whether the decisions you make today will pay off in the future.
  3. Focusing only on the numbers. Numbers never tell you the full story. Enhance quantitative data with sophisticated, qualitative assessments that give you the human side of the story.
Harvard Business Review Guide to Finance Basics for Managers

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