Performance Measurement Methods - Assignment Example

PERFORMANCE MEASUREMENT METHODS PERFORMANCE MEASUREMENT METHODS Performance measurement is an important aspect of organizational growth, which makes it possible for managers to take decisions that have to do with human resource management (Zimmerman, 2014). Some other forms of information and decision making that are influenced by performance measurement have to do with organizational changes that aim at internal growth. But to achieve any of these uses of performance measurement, Zimmerman (2014) stresses on the need to have the right performance measurement methods in place.

The reason for this is that some of the types of performance that comes in the organization are qualitative, whiles others are quantitative. Consequently, it is important to have a form of performance measurement tool or method that matches the exact form of performance variable being measured. It is against this background that different types of performance metrics have been devised. Likierman (2009) attempted to discuss some of the key performance measurement methods by focusing on things that organizations must avoid if they do not want to fall into the trap of wrong performance measurement.

One of these traps was mentioned to be describing against yourself. This is the process of looking to one’s organization alone when measuring performance. As this is seen to be a trap, it means the best method for growth is to measure performance by having benchmarks that makes an organization look beyond itself. In my current organization, there are several ways that performance can be improved with we are to set benchmarks in our performance measurement. Very specifically, it is important for the organization to look at some of its key competitors and the output of work that comes from these companies.

Based on such figures, out organization may also set its own goals so as to make it an industry leader rather than focusing only on its internal efforts.In another instance, Likierman (2009) makes mention of looking backwards as a major trap that defeats the goal of achieving effective performance measurement. Reviewing the annual reports of most companies, it would be seen that the companies quantify their output of work based on what was achieved in the previous year. Likierman (2009) however refuse to see this as an effective way of measuring performance.

This means that the right method is to forecast by making projections of what the company wants to achieve. This method can clearly be applied in my current organization to ensure its growth and development. To do this, it would be important for the company to embark on research and development (R&D) that looks at the prospects of the existing market so as to make predictions of what future demands will be. Having known the trend of future demands, benchmarks can be set so that the real measure for performance will be against the forecasted values rather than past values.

Raynor & Ahmed (2013) also made mention of the need to focus on better before cheaper when measuring performance. There was a time within my organization when this method of measurement was forfeited, resulted in wrong decisions being made of the outcome of performance measurement. The company had a series of accusitions to make. Instead of settling on quality and expensive purchases, we bought inferior and cheaper products with the aim of saving cost. Even though this decision reduced the expenditure of the company, we found that we had performed wrong measurement on our financial performance because when the company started using the products, it turned out that they were incapable of yielding the results and targets set for the company.

Revenues therefore started falling, making us run at a lost. The understanding that is developed here is that having lower expenditure does not always guarantee higher returns (Zimmerman, 2014).ReferencesLikierman, A. (2009). The five traps of performance measurement. Harvard Business Review, 87(10), 96–101.Raynor, M. E., & Ahmed, M. (2013, April). Three rules for making a company truly great: A quest for reliable data on organizational excellence yields surprisingly simple guidelines. Harvard Business Review, 91(4), 108–117.

Zimmerman, J. L. (2014). Accounting for decision making and control (8th ed.). New York, NY: McGraw-Hill.