Measures of Performance

Abstract

Companies wishing to improve continually in business generally and new product development in particular need to use performance indices development in particular need to use performance indices, i.e. “metrics”. This is to study their present achievements, see the effects of improvements, help control the processes and make comparisons with norms or standards like past achievements, present plans and benchmark data. Reviews and lists examples of the relevant metrics and discusses their application.

An empirical analysis of lead benchmarking and performance measurement

“…It is not enough to adjust old approaches; a more fundamental review and development of definitions and approaches is required (Neely et al, 2001). Resultant indicators and measures that fit this development have been documented throughout the academic performance management literature as: "Predictive performance measures" (Neely et al, 1995); "Leading indicators" (Cumby and Conrod, 2001;Kaplan and Norton, 2001); "Proactive-leading indicators, Preventive/subjective" (Manoochehri, 1999) "Future looking performance measures" (Bourne et al, 2000) "Lead or expost indicators" (Nixon, 1998); "Performance drivers" (Olve et al, 1999); "Dynamic metrics" (Bauly, 1994).…”

“…Furthermore, the indicators used in these methods reinforce the iterative ethos. These indicators can be broadly classified as "lag indicators" (Barsky and Bremser, 1999a, b;Corrigan, 1998;Kaplan and Norton, 2001); "static indicators" (Bauly, 1994); "Backward looking measures" (Bourne et al, 2000;Cumby and Conrod, 2001); "Reactive, descriptive and lagging indicators" (Manoochehri, 1999) and "lag expost indicators" (Nixon, 1998). The financial indicators have a traditional backward looking or lag affect (Bourne et al, 2000).…”

Linking strategy into operational management

“…To obtain the best performance, best practices and processes are needed. Metrics for these should indicate how well best practices are in place and being used (Bauly, 1994; Camp, 1994).…”

A critique of benchmarking and performance measurement

“…Kanter (1995) claims that in today's dynamic business environment the emphasis has shifted to the "three Cs" -concepts, competence, and connectionswhich derive from investments in innovation, education and collaboration. Various authors have put forward different classifications to appropriately describe these traditional performance measures such as: "Lag indicators" (Barsky and Bremser, 1999;Corrigan, 1998;Kaplan and Norton, 2001); "Static metrics" (Bauly, 1994); "Backward looking measures" (Bourne et al, 2000;Cumby and Conrod, 2001); "Reactive, descriptive and lagging indicators" (Manoochehri, 1999) and "Lag ex-post indicators" (Nixon, 1998). Barsky and Bremser (1999) argue that while traditional financial metrics reflects the use of physical capital, the key to long term competitive advantage in the knowledge and information economy are based on the successful strategic management of intangible resources.…”

“…Leading benchmarking organizations should be extending beyond internal/external, financial/non-financial performance measures and focusing on benchmarking their lead performance measures. These measures have been documented throughout the academic performance management literature as: "Predictive performance measures" (Neely et al, 1995); "Leading indicators" (Cumby and Conrod, 2001;Kaplan and Norton, 2001); "Proactive-leading indicators, Preventive/subjective" (Manoochehri, 1999) "Future looking performance measures" (Bourne et al, 2000) "Lead or ex-post indicators" (Nixon, 1998); "Performance drivers" (Olve et al, 1999) and "Dynamic metrics" (Bauly, 1994).…”