Performance measurement for organization excellence

[Note: The terms indicator and measure are used interchangeably in this paper. These terms refer to numerical information that quantifies performance. Performance refers to any measurable dimension of processes, products and services.] Companies today are finding it imperative to have measurements for their leading performance requirements and to be able to quantify improvement results. But managers are experiencing that the information available to them allows them no more than a ''rear-view mirror'' look at their company's performance. Once the data is available to them, it is old information, and mid-course corrections are often made late in the game. Managers need a dashboard rather than a rear-view mirror for their performance measurement system. A dashboard allows managers to view current data to evaluate state of affairs. This paper will demonstrate key elements of a performance measurement system designed to enable an organization to achieve excellence. Organizational excellence can only be achieved by aligning the company's strategic plan (vision and goals) to workgroup and individual performance measures, and to continuous improvement actions. This alignment can be accomplished through a well-designed performance measurement system. The Malcolm Baldrige National Quality Award (1997 Award Criteria, page 3) defines ''alignment'' as the consistency of processes, actions, information, and decisions among company units in support of key company-wide goals. Effective alignment requires common understanding of purposes and goals and use of complementary measures and information to enable planning, tracking, analysis, and improvement at three levels, the company level; the key process level; and the work unit level. The key elements that will be presented in this paper are the solutions to problems experienced by manufacturing, health care, and service companies in creating performance measurement systems that align their organizations. The solutions and ideas to these problems can be viewed as a collection of the best of practices, and can be used by other organizations as they design their own measurement tools and systems. This paper will also demonstrate how software can enable performance measures to be successfully deployed throughout an entire company, thus focusing all employees (CEO to frontline employees) on the achievement of the organization's vision and goals.