The Perils of Performance Measurement

Abstract

{Excerpt} Interest in performance measurement grows daily but the state of the art leaves much to be desired. To promote performance leadership, one must examine both its shortcomings and its pernicious effects. The use of yardsticks to measure performance needs no arguing: one cannot improve what one cannot measure. More emphatically, in the words of Joseph Juran, "Without a standard there is no logical basis for making a decision or taking action." Performance measurement, a key driver of the Plan–Do–Check–Act iterative cycle that W. Edwards Deming promoted, is the process of gauging achievements against stated goals. A major determinant of sustainable competitive advantage, it hangs on the development of SMART indicators—customarily in a results chain linking activities, inputs, outputs, and outcome to impact—that one should track to reliably verify and promote organizational success. Pre–post comparisons can then be made to assess the relevance, efficiency, effectiveness, sustainability, and impact of endeavors (at least in the case of larger-scale ventures).