Key issues
The following key issues should be remembered:
- The costs of collecting and calculating a performance indicator should be fully
justified in terms of the benefits it will deliver in the management of information. - There is no point measuring something that cannot be controlled or changed.
- There should always be a basis for choosing which results to compare.
- The number of systems and processes that need to be put in place to implement a
performance management system. - The means to define targets enable a calculation to take place, and facilitate
meaningful discussions about the results.
Introducing performance management
The introduction of performance management requires the following preparation:
- Clear strategy and performance objectives,
- Action plans containing ideas regarding the activities to be carried out to achieve the
objectives, - Resource allocation plans (levels of staff, money, and equipment to be devoted to
each activity), - Performance standards or targets for each activity or objective,
- Measurement systems and data collection systems, which record the relevant
information, - Clear reporting timetables and reporting hierarchy,
- Clear allocation of responsibilities for each objective,
- Objectives based performance appraisal at the individual or group level,
- An agreed process for publishing, distributing, reviewing and responding to results,
- A receptive performance management culture,
- Rewards or sanctions for performance.
It would be either very difficult or unproductive to try to introduce performance man-
agement without these systems and processes being in place. The strategy, objectives
and policy provide the framework for performance measurement. They define what is
important to the organisation and therefore, what needs to be measured and controlled.
Examples of documentation include mission statement, strategic plan, operational plans,
policy documents, divisional business plans, action plans and resource allocation plans,
which provide details of the means, which will be used to perform the activity and
therefore provide the basis of the cost of provision.
Examples of documentation include unit business plans policy focus document,
product or service plans, budget papers, staff structures and roles, detailed staff plans
and job descriptions, capital investment plans, equipment allocations, and vehicle allo-
cations.
The measurement systems provide the raw data for analysis, but it should be designed in
a way that the information is recorded and presented in the required format. For exam-
ple, this may include an individual time recording system, which allocates staff time,
and therefore costs of specific activities and reports information on that basis. Examples
include financial accounting systems, budgetary control systems, management account-