Using Measures – Performance Reviews
The measures you use to manage your business look to the future (feedforward) and to the past (feedback). When you set your objectives, measures and targets you are communicating to the whole organisation what is to be achieved and the direction in which the business is going; you are looking forward. When actual performance is reported against those objectives, measures and targets you are receiving feedback on what has been achieved, but you are also receiving information that can help you make a judgement about what may happen in the future. If you talk to people, it is the feedback role of measurement that most will instinctively talk about. However, the direction setting, feedforward, role is the other half of the circle and so is at least as important.
As we have said earlier in this book, performance measures influence behaviour. However, you will not ensure that the organisation performs well just by creating an objective, specifying a measure and setting a target. Performance comes from people doing things well, computer systems working smoothly and effective processes guiding activity. As we have already seen, a process will have a natural rhythm and within that rhythm there will be natural variation in performance from period to period. To improve the performance of a process you have to do more than measure; you have to change some aspect of the process itself. All measurement gives you is the feedback ...