Indicators of the work performed and the results achieved in an activity, process, or organizational unit. Performance measures should be both non-financial and financial. Performance measures enable periodic comparisons and benchmarking. For example, a common performance measure for a distribution center is % of order fill rate. Attributes of good performance measurement include the following:

1. Measures only what is important: The measure focuses on key aspects of process performance.

2. Can be collected economically: Processes and activities are designed to easily capture the relevant information.

3. Are visible: The measure and its causal effects are readily available to everyone who is measured.

4. Is easy to understand: The measure conveys at a glance what it is measuring and how it is derived.

5. Is process oriented: The measure makes the proper trade-offs among utilization, productivity and performance.

6. Is defined and mutually understood. The measure has been defined and mutually understood by all key parties (internal and external).

7. Facilitates trust: The measure validates the participation among various parties and discourages “game playing”.

8. Are usable: The measure is used to show progress and not just data that is “collected”. Indicated performance vs data.

Also see: Performance Measurement Program.