Performance Measurement vs. Performance Management

Performance measurement and performance management may sound similar, but while they are complementary to one another, managers should perceive that they are entirely separate strategic practices.

Measuring your staff performance is not something that can be done overnight but rather a continuous approach and by conducting meaningful conversation throughout per performance cycle (usually per financial year). The Balanced Scorecard creators, Drs. Robert S. Kaplan and David P. Norton, played a large role in championing these terms. In 1996, Kaplan and Norton published The Balanced Scorecard: Translating Strategy into Action. When they did this, they spoke about performance measurement, and leading and lagging indicators. But by 2000, when they published The Strategy Focused Organization, they had further explored the concept of performance management. They expressed how it simply wasn’t good enough to just have a set of measures; organizations needed to have a process of evaluating, responding to, and aligning around those measures in order to get anything out of them.

Performance measurement deals specifically with performance measures. These are the quantitative indicators you put in place to track the progress against your strategy. Typically good performance measures cover a wide variety of criteria, like process, people, cost, etc.

While performance measurement asks, “How do we track the progress of the strategy we’ve put in place?”, performance management asks, “How do we manage the strategy we’ve put in place?” This is a subtle (but important) distinction.

The management process requires that your leadership team—either department or enterprise—meet on a regular basis and discuss the results. The team should then discuss the actions they’re going to take to improve the results and determine where your projects link into those results.

So, while your measures may tell you where you are today, the actions you’re going to take to improve those results for the rest of the year are more important. Leadership teams should be able to say, “We’re behind in this performance measure; who is responsible for this particular measure?” Accountability for initiatives is important, and getting your leadership team aligned around your results will drive your company forward.

Take a step back now and speak to your team, help them and help yourself as manager to measure and manage performance together.