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Performance Metrics

Key performance metrics are essential ingredients to managing and rewarding performance.

We go back to the first few pages of Peter F. Drucker's "The Essential Drucker" to learn that "neither the quality of the output nor the bottom line is by itself an adequate measure of the performance of management and enterprise."
  • "Market standing, innovation, productivity, development of people, quality financial results - all are crucial to an organization's performance and to its survival."
  • "Finally, the single most important thing to remember about any enterprise is that results exist only on the outside. The result of a business is a satisfied customer. --- Inside an enterprise, there are only costs."

One quickly realizes working with smart companies that the framework for workable performance metrics consists of four broad sectors:

  • Market value - performance metrics that clearly establish changes in the tangible and intangible market (or book) value
  • Internal enterprise improvement - metrics that track impact of innovation, productivity, expenses and the development of people
  • Positive financial indicators - financial metrics that resonate with the direction and operation of the enterprise
  • Customer satisfaction - believable metrics that track the level of customer satisfaction

Developing good performance metrics on which to base workable performance and compensation management systems is not brain science.

  • It requires infinite knowledge of the enterprise's direction and operations
  • It requires clear knowledge of how people work
  • It requires a distinct articulation of metrics to the investing or controlling public

The HARLON GROUP incorporates proven methodologies in creating the level of understanding necessary to create performance metrics that meet this litmus test.


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