Presented By: Group N1 & N2

PERFORMANCE MEASUREMENT is the selection and use of

quantitative measures of capacities, processes, and outcomes to develop information about critical aspects of activities, including their effect on the public. Balance between external measures(stakeholders, etc.) and internal measures(innovation, learning, etc.) Need of Performance Measurement:

In order to improve something you have to be able to change it. In order to change it you have to be able to understand it. In order to understand it you have to be able to measure it.
By Dennis S OLeary

The Balanced Scorecard (By Kaplan and Norton, 1993, 1996, 2001). Performance Prism (By Neely 2002). Cambridge Performance Measurement Process (By Neely 1996). TPM Process(By Jones and Schilling, 2000). 7-step TPM Process(By Zigon, 1999).

Its a strategic planning and management system that is used to bring the business in line with the Vision of the company. It aligns the so-called unrealistic/vague goals into realistic and achievable steps. Things to know: The companys vision statement The financial status of the organization Existing customer satisfaction level Level of expertise of their employees

First Scorecard by: Art Schneidermann Made in: 1987 At Analog Devices, a mid-sized semi-conductor company. Art Schneidermann combined with Dr. Robert S Kaplan and Nolan:Norton, in 1990, to form the first draft. 1992: 1st paper released 1993: After success of first, 2nd paper released. 1996: Book by the name THE BALANCED SCORECARD published.

Consisted of tables, broken into 4 sections: 1. Financial 2. Customer 3. Internal Business and Processes 4. Learning and Growth

Drawback: Cannot answer the following question

Of all the measures the manager could have chosen, why did the manager choose these?

Department Finance

Areas Return On Investment Cash Flow Return on Capital Employed Financial Results (Quarterly/Yearly) Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate

Internal Business Processes

Learning & Growth

Customer

A diagram that is used to document the primary strategic goals being pursued by an organization or management team. Managers define a few selected strategic objectives within each perspective & then define the cause effect chain among these objectives by drawing links between them. Drawback

Drawing links between so many strategic goals is still a relatively abstract activity.

Encourages identification of a few high-level financial measures. Data such as risk assessment, cost benefit data, etc. fall under this category.

Financial

Customers are analyzed in terms of kinds of customers & kinds of processes for which we are providing support.

Customer

Allows the managers to know how well the business is running and whether its products conforms to customer requirements.

Business process

Includes employee training and corporate cultural attitudes related to growth & improvement. Learning & growth constitutes the essential foundation of success of any worker organization.

Learning & Growth

Implemented by government agencies, military units, business units and corporations as a whole, non-profit organizations, and schools. By 2004 about 57% of global companies were working with the balanced scorecard

http://www.balancedscorecard.org/BSCResou rces/ExamplesSuccessStories/tabid/57/Defau lt.aspx http://en.wikipedia.org/wiki/Balanced_scorec ard