Myths of Performance Measurement

This chapter reveals the myths of performance measurement that author believes need to be explained first and hence lists them as follows. Measuring performance is relatively simple and the appropriate measures are very obvious. One can delegate a performance management project to a consulting firm. In-house project team can succeed at performance measurement while continuing with other duties. Linking KPIs to pay increases performance. Most measures result in better performance. Performance measurements are mainly used to manage implementation of strategic initiatives. The balanced scorecard was first off the blocks. Measures fit in well in balanced-scorecard perspective. Balanced-scorecard can report progress to both management and board. There are only four balanced-scorecard perspectives. Strategy mapping is an important requirement. All performance measures are KPIs. Monitoring monthly performance measures will improve performance. KPIs are financial and nonfinancial indicators. The more measures the better. Indicators are either lead (performance driver) or lag (outcome) indicators. It's easier to set year-end targets having knowledge of what is ‘a good performance’.