Below is a guide structured around the theoretical foundations and the practical steps to build one. 1. Theoretical Foundations
The system shouldn't just tell you if you hit a goal, but also help you question if you are measuring the right goal [1]. 2. Practical Design Steps Designing a system typically follows a four-phase process: Key Actions 1. Design Designing Performance Measurement Systems: Theo...
Measuring too many things leads to "analysis paralysis." Focus on the "Vital Few" rather than the "Useful Many." Below is a guide structured around the theoretical
Are the targets (Specific, Measurable, Achievable, Relevant, Time-bound)? Is the data source reliable and automated where possible? Is the data source reliable and automated where possible
Relying solely on financial data (lagging indicators) while ignoring customer satisfaction or employee growth (leading indicators).
A more modern evolution that considers five facets: Stakeholder Satisfaction, Strategies, Processes, Capabilities, and Stakeholder Contribution [2].