Handbook of Corporate Performance Management

Chapter 1

Performance and the Role of Measurement

1.1 INTRODUCTION

In this chapter we will look at what good performance is and at the factors that combine to create good corporate performance. We will also set out what a good measurement process can do for your organisation, not only to help you track your progress but also to help you encourage and maintain better performance. You need to recognise that performance measurement is a tool to be used by management and we end this chapter by reflecting what good leaders need to do to ensure that the tool is used effectively in taking the organisation forward.

1.2 WHAT IS GOOD PERFORMANCE?

The answer to this question is simple – it is about achieving your objectives. Of course that is not the whole picture; it is far more complex than that. Objectives themselves do not remain constant; they usually change over time. The world moves on and if you do not keep reviewing what you are doing you will have a problem. How you achieve your objectives is also important – you may be successful in the short term at the expense of success in the longer term. Before launching into setting up a performance measurement system it is worth reflecting on the nature of good performance.

1.3 WHOSE PERSPECTIVE?

Any benchmark of business performance will depend on the definition of success for that business. In turn, the definition of success will depend on the view of particular groups of stakeholders.

Let us take an airline as an example. Someone going ...