Improving the performance of a performance measure

Abstract

PurposeThe purpose of this paper is to discuss how to design an individual performance measure, which usually means the measurement practitioner must deal with many requirements other than the ones that can be found when designing a complete performance measurement system.Design/methodology/approachDifferent requirements suggested in the performance measurement literature from the past 20 years have been sorted out in order to structure the different tasks to conduct when designing a measure.FindingsExplains how to form or select a formula that fulfils the purpose of a measure. Defines 15 parameters that fully specify a measure. Clarifies positive and negative measure properties.Practical implicationsMeasurement regimes are often built without a clear understanding of what is being measured. The article includes several practical tools that can be used when designing a performance measure.Originality/valueDiscusses the question “how to measure?”, while most of past research in the field has been aimed at solving “what to measure?”.