It should not create performance disincentives
A performance measure should not be too demanding because it may encourage people
to cut corners or change their behaviour simply to meet that target. This is tantamount to
cheating.
The continued validity of the measurements should be regularly assessed
It is often useful to use a variety of measurements. This is especially true in major activ-
ity areas, in order to eliminate the chance of error or misleading results caused by other
factors.
Features of performance indicators
The most powerful type of indicator is something that can be expressed numerically,
either as pure numbers or percentages. The more simple the indicator, the more effec-
tive it is (Noe et al. 2007; Colin 2005). Indicators should be related to the objective they
are measuring.
Formats for presentation
Formats include lists of figures, graphs, charts, or league tables. The clearer and more
eye-catching the presentation is, the stronger the message. Different formats may be
used to display the same measurements.
Types of comparison
- Comparisons over time within the same activity area e.g. comparing this year with
the previous year. - Comparisons between different units performing the same function e.g. hospital
admissions across the country. - Comparing the target to what is actually happening.
- International comparisons.
- Comparisons with other activities intended to achieve the same objective.
- Qualitative or quantitative.
Examples
- Objective: The objective of the customer service unit is to reduce customer
complaints by 5% each year. - Standard: Establish the number for the benchmark year, and determine the level at
which the numbers of complaints are acceptable. - Measure: Collect data on the number of complaints received by the department each
year; calculate the total number of complaints. - Indicators: Compare the actual figures against those in the previous year. Calculate
the percentage improvement by department and overall. Identify those areas, which
have met or exceeded the target. Identify those areas, which have not met that target
and seek explanations.
Presentation
- Graph showing the relationship between the actual number and the target.
- Pie chart to show overall distribution of complaints by department.
- Explain the corrective measures, which will be taken in problem areas.