Performance Measures

Performance Measures

Performance measurement is a fundamental building block of TQM and a total quality organisation. Traditional performance measures, based on cost accounting information, provide little to support organisations on their quality journey, because they do not map process performance and improvements seen by the customer. In a successful total quality organisation, performance will be measured by the improvements seen by the customer as well as by the results delivered to other stakeholders, such as the shareholders.

In the cycle of never-ending improvement, performance measurement plays an important role in:

• Identifying and tracking progress against organisational goals

• Identifying opportunities for improvement

• Comparing performance against both internal and external standards

It is important to know where the strengths and weaknesses of the organisation lie,

and as part of the ‘Plan –Do – Check – Act’ cycle, measurement plays a key role in quality and productivity

improvement activities. The main reasons it is needed are:

• To ensure customer requirements have been met

• To be able to set sensible objectives and comply with them

• To provide standards for establishing comparisons

• To provide visibility and a “scoreboard” for people to monitor their own performance level

• To highlight quality problems and determine areas for priority attention

• To provide feedback for driving the improvement effort

A simple performance measurement framework

A good performance measurement framework will focus on the customer and measure the right things.

Performance measures must be:

• Meaningful, unambiguous and widely understood

• Owned and managed by the teams within the organisation

• Based on a high level of data integrity

• Such that data collection is embedded within the normal procedures

• Able to drive improvement

• Linked to critical goals and key drivers of the organisation

There are four key steps in a performance...