Performance measures in business help chart progress toward
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a goal; they determine the gap between real and expected performance and determine organization effectiveness. Good performance measures answer questions about what matters most to the business. These measures make clear where a business should focus when caught between competing initiatives.
When evaluating performance measures, there are many possible information sources to track. To help ensure that the information is relevant, use the acronym SMART (Specific, Measurable, Achievable, Relevant, Timely). These attributes of quality data will help responsible parties decide on the best measures.
Through the specific moniker, ask if the questions asked help answer evaluation measurements. Is it directly related to what is being monitored?
Is the data measurable? The data should be easy to monitor, practical, and already collected; this makes it repeatable, in case of conflict. For an effort to be achievable, it should be cost-effective, reasonable, and monitored by an experienced organization. Relevant information does double-duty; it can meet other reporting requirements as well. A gain in efficiency should never be overlooked, explains Nathan Jurczyk of Merchant Services.
Timely data requires analyzing lag time. Understand how long information must be collected before it can be interpreted. Also understand leading versus lagging on the temporal scale; both are important working either as an early warning sign or showing a cause and effect relationship.
The SMART acronym helps business leaders decide if an attribute or business initiative can and will deliver on the overarching business strategies and objectives.