U.S. flag
        An official website of the United States government
          Here’s how you know
        Here’s how you know**Official websites use .gov**
              
              A **.gov** website belongs to an official government organization in the United States.
        **Secure .gov websites use HTTPS**
              
              A **lock** (  A locked padlock
) or **https://** means you’ve safely connected to the .gov website. Share sensitive information only on official, secure websites. https://www.nist.gov/baldrige/thinking-about-performance-measurement
  Search NIST
    Search
              Menu

      


Close
    Topics
        All Topics
                                                        Advanced communications
                                                        Artificial intelligence
                                                        Bioscience
                                                        Buildings and construction
                                                        Chemistry
                                                        Climate
                                                        Cybersecurity
                                                        Electronics
                                                        EnergyEnvironment
                                                        Fire
                                                        Forensic science
                                                        Health
                                                        Information technology
                                                        Infrastructure
                                                        Manufacturing
                                                        Materials
                                                        Mathematics and statisticsMetrology
                                                        Nanotechnology
                                                        Neutron research
                                                        Performance excellence
                                                        Physics
                                                        Public safety
                                                        Resilience
                                                        Standards
                                                        Transportation
            Publications
            Labs & Major Programs
        Laboratories
                                Communications Technology Laboratory
                                  Engineering Laboratory
                                  Information Technology Laboratory
                                  Material Measurement Laboratory
                                  Physical Measurement LaboratoryUser Facilities
                                NIST Center for Neutron Research
                                  CNST NanoFab
                                                        Research Test Beds
                                                        Research Projects
                                                        Tools & InstrumentsMajor Programs
                                Baldrige Performance Excellence Program
                                  CHIPS for America Initiative
                                  Manufacturing Extension Partnership (MEP)
                                  Office of Advanced Manufacturing
                                  Special Programs Office
                                  Technology Partnerships Office
            Services & Resources
        Standards and Measurements
                                Calibration Services
                                  Laboratory Accreditation (NVLAP)
                                  Quality System
                                  Standard Reference Materials (SRMs)
                                  Standards.gov
                                  Time Services
                                  Office of Weights and MeasuresSoftware
                                                        Data
                                Chemistry WebBook
                                  National Vulnerability Database
                                  Physical Reference Data
                                  Standard Reference Data (SRD)
                                                        Storefront
                                                        License & PatentsComputer Security Resource Center (CSRC)
                                                        NIST Research Library
            News & Events
        News
                                                        Events
                                                        Blogs
                                                        Feature Stories
                                                        AwardsVideo Gallery
                                                        Image Gallery
                                                        Media Contacts
            About NIST
        About Us
                                Leadership
                                  Organization Structure
                                  Budget & Planning
                                                        Contact Us
                                                        Visit
                                                        Careers
                                Student programsWork with NIST
                                                        History
                                NIST Digital Archives
                                  NIST Museum
                                  NIST and the Nobel
                                                        Educational Resources
 
 Baldrige Performance Excellence Program
    
      
  How Baldrige Works
                            Expand or Collapse
          About Baldrige
                                              Expand or Collapse
                Baldrige Impacts
                                  History
                                                                Expand or Collapse
                      Malcolm Baldrige Biography
                                              How the Baldrige Program Began
                                  Baldrige Process Integrity
                                  Baldrige FAQs
                      Baldrige Director
                                              Expand or Collapse
                Organization Chart
                      Baldrige Community
                                              Expand or Collapse
                Examiners
                                                                Expand or Collapse
                      Examiner Resources
                                  Board of Overseers
                                  Judges Panel
                                  Executive Fellows
                                  Baldrige Foundation
                                  State & Local Baldrige-Based Programs
                                  Baldrige Ambassadors
                                  Communities of Excellence 2026
                                  International Award Programs
                      News/Media Room
                                              Expand or Collapse
                Researchers
          Self-Assessing
                            Expand or Collapse
          Getting Started
                      Baldrige Key Terms
                      Improvement Tools
                                              Expand or Collapse
                Job Quality Toolkit
                                                                Expand or Collapse
                      Recruitment & Hiring
                                              Benefits
                                              Diversity, Equity, Inclusion, & Accessibility
                                              Empowerment & Representation
                                              Job Security & Working Conditions
                                              Organizational Culture
                                              Pay
                                              Skills & Career Advancement
                                              Job Quality Baldrige Style
                                  Foundations for a Successful Business
                                  Are We Making Progress?
                                  Are We Making Progress as Leaders?
                                  easyInsight: Take a First Step Toward a Baldrige Self-Assessment
                                  Are You a Role-Model Leader?
                                  Integrating Baldrige with Other Tools
                      Baldrige by Sector
                                              Expand or Collapse
                Manufacturing
                                                                Expand or Collapse
                      Are You Ready to Address Your Business Challenges and Get National Recognition?
                                  Service
                                  Small Business
                                  Education
                                  Health Care
                                  Nonprofit/Government
          Products & Services
                            Expand or Collapse
          Baldrige Cybersecurity Initiative
                      Baldrige Excellence Framework
                      Baldrige Excellence Builder
                      Baldrige Executive Fellows Program
                      Baldrige Connect
                      Become a Baldrige Examiner
                      Baldrige Examiner Training Experience
                      Shop Baldrige Gear
          Publications
                            Expand or Collapse
          Baldrige Excellence Framework
                                              Expand or Collapse
                Business/Nonprofit
                                  Education
                                  Health Care
                                  Baldrige Excellence Framework Graphics
                      Baldrige Case Study
                      Blogrige
                      Insights on the Road to Performance Excellence
          Conferences
                            Expand or Collapse
          Quest for Excellence Conference
                      Baldrige Fall Conference
                      Baldrige Exhibit Schedule
          Award Recipients
                            Expand or Collapse
          Current Baldrige Recipients
                      Name & Trademark Guidelines
          Baldrige Award
                            Expand or Collapse
          Award Criteria
                      How to Apply
                                              Expand or Collapse
                Application Format
                      Award Cycle Overview
                      Is Your Organization Eligible?
                      Award Process Fees



  Connect with us
      
      TwitterGovDeliveryYoutubeThinking about Performance Measurement

Share
  Facebook
                      Linkedin
                      Twitter
                      Email

Dr. Harry Hertz Photo and the Insights on the Road to Performance Excellence LogoDr. Harry Hertz, Director EmeritusBaldrige Performance Excellence Program
  
      March 2013I grew up in New York. There were several questions we used to routinely ask each other: "How ya doin?", "How you been doin?", "How ya gonna do?" From my current vantage point, I would ask a fourth question that we didn't ask each other back then: "Are ya gonna stay in business?" Everything I will say about performance measurement is summed up by these four questions.That said, I would like to explore the area of performance measurement in more detail this month. I will look at the responsibility for performance measurement, evolution of performance measurement, attributes of good measures, pitfalls in performance measurement, and finally, use of performance goals and projections.Responsibility for Performance MeasurementPerformance measurement is the responsibility of an organization's senior leaders. That does not mean that they have to do the regular gathering of key data, but they need to choose the key measures, regularly review them, and use them to lead and guide the organization. Senior leaders also need to set the culture for measurement. They need to engage employees in that culture and set the tone that measurement guides organizational change and improvement. They also need to make clear that a key purpose of measurement is not to punish individuals when results need improvement.Evolution of Performance MeasurementI recently came across an interesting research article from the British Academy of Management on the past and future of performance measurement (Bititci, U., et al., [2012], "Performance Measurement: Challenges for Tomorrow." *International Journal of Management Reviews*, 14: 305–327). The authors looked at the evolution of performance measurement from 1900 to 2020 and beyond and asserted that measurement has been characterized by an evolving set of themes: productivity management (1900–1940), budgetary control (1930–1970s), integrated performance measurement (1970–2000), and integrated performance management (1990–2020). They then speculate that the next phase may be network performance measurement (integrating suppliers and collaborators). They also comment on the rate and scale of change over the same time period, characterizing the transitions from slow and incremental; to fast, predictable, and incremental; to turbulent and discontinuous (today); to disruptive and transformational (the future). While the future of performance measurement and change is not yet known, the trends certainly seem to bear out the conclusions drawn by Bititci et al. To prepare for that future and survive today, a robust performance measurement system is needed.Attributes of Good MeasuresI believe there are nine key attributes of good measures, starting with the way results are scored in the Baldrige Criteria for Performance Excellence.**1. LeTCI (or *let's see*)—**The acronym stands for levels, trends, comparisons, and integration. In the Baldrige scoring system, good measures must show the current *level* of performance on a meaningful scale. Good measures show how performance has *trended* over time on a time scale that is relevant to seeing changes in performance. *Comparisons* indicate how you are performing relative to key competitors, industry averages, and benchmark performance, as appropriate. Finally, *integration* demonstrates the extent to which your measures address important performance requirements and support organization-wide goals.**2. Measures should be comprehensive—**They reflect a systematic approach to everything that is important to your organization's success. In the Baldrige results category, we look for product/service performance, customer-focused performance, operational performance (including workforce, leadership, and process performance, as well as ethical and legal compliance), and financial and marketplace performance.**3. Measures should be accurate and timely**—Data are useless if they are inaccurate or not available soon enough to use them in decision making.**4. Measures should provide a basis for decision making**—If the data and information are not informing decisions, you are probably not collecting the right information. Choice of top-level measures is critical, which is why it is the domain of senior leaders. A corollary to decision making is that key measures must also support decisions about resource allocation.**5. Measures should be strategic and operational**—Measures need to address progress on strategic objectives and associated action plans. They also need to address ongoing operational performance. Measures need to address in-process performance, process output, and outcomes. Measures need to include leading and lagging indicators—those that predict future outcomes as well as those that track current performance.**6. Measures should be understandable**—Users must be able to take action based on seeing the data. If the measures are very convoluted or abstract, they will not be useful.**7. Measures should be shared and cascaded**—Data should be shared with your empowered workforce and suppliers and partners so that they can contribute to improvements and organizational success. Organizational-level measures should have counterpart or component measures at the business unit, divisional, and work unit levels. Measures can also cascade to individual employee scorecards.**8. Not all measures are numeric**—Qualitative information is also important to an organization, including the perceptions of employees, customers, and your community. Qualitative information includes information on legal and regulatory compliance as well as financial audit performance.**9. Measures should be reassessed**—Economic and competitive conditions change. Performance requirements change over time as well. Measures need to be scrutinized to see if a change is needed. If data are no longer providing any discriminating power between normal performance and outstanding performance, they need to be re-evaluated. While trend data are important, and speak to consistency in measures, you should not be locked in to no-longer-relevant measures.Pitfalls in Performance MeasurementIf one obeys all the attributes of good performance measures, it is unlikely that you will be hit by any of the pitfalls. But just in case, I have summarized four common traps that can derail good performance measurement.**1. Using targets and rankings as a key driver of measurement**—Focusing on targets and rankings can unintentionally incentivize people to focus on that one metric, possibly even distorting overall organizational outcomes. Simple examples are school rankings that cause teachers to teach just to the tests or a time target for delivery of pizzas that causes risky driving behaviors by pizza deliverers, especially if they are personally held accountable for on-time delivery.**2. Too many or too few top-level metrics**—If an organization has too many organizational metrics, they will not be consistently tracked or will be overwhelming for use in decision making. The corollary is if a measure is not being used to drive decisions, then the measure may not need to be tracked, at least at the senior-leader level. The opposite is too few measures for making systemic organizational decisions. At the extreme, this can be one measure: financial performance. But driving this measure alone could lead to undesirable consequences, such as loss of employee or customer satisfaction and engagement. At the extreme, this one measure alone could inappropriately encourage unethical behavior, just to make sure that the financial goals are met.**3. Knee-jerk reactions**—Acting too quickly could result in fixing the wrong problem. When a negative result is encountered, root-cause analysis should be done before proposing a fix.**4. Wrong cycle time for trend measurements**—The cycle time for measuring trends should relate to the process cycle time for that unit of measurement. If the measurement cycle is longer or shorter, you may miss key events or misinterpret the meaning of the data.Performance Goals and ProjectionsPerformance projections are an underutilized management tool. As estimates of your future performance, they should be based on an understanding of past performance, rates of improvement, and assumptions about innovations and changes in the external environment that impact your organizational performance. Performance projections state your expected future performance. Performance goals state your desired future performance. To the extent that projections fall short of goals, they may indicate key challenges for your organization where breakthrough improvement or innovation is needed. Where breakthrough improvements were already planned as part of your strategy, your goals and projections may overlap.If you want to see role-model use of performance management, join us on April 8–10, 2013, at the 25th Annual Quest for Excellence© conference. I am sure it will measure up to your expectations!ResourcesBaldrige Excellence FrameworkBaldrige Excellence BuilderBlogrigeNewsWhy Health Care Performance Is Important to You, Me, and U.S. Competitiveness (January 2013)A Sense of Comity (February 2013)Archived Columns
  Baldrige Framework and Criteria

    
    Contacts
      
        

Baldrige Customer Service
  baldrige@nist.gov
  (301) 975-2036
  NIST/BPEP 
  100 Bureau Drive, M/S 1020 
  Gaithersburg,
  MD 20899-1020

Created April 29, 2013, Updated November 15, 2019
 HEADQUARTERS
            100 Bureau Drive
              Gaithersburg, MD 20899301-975-2000
            Webmaster | Contact Us | Our Other Offices
        Twitter
            
Facebook
            
LinkedIn
            
Instagram
            
YouTube
            
Giphy
            
RSS Feed
            
Mailing List
                              How are we doing? Feedback

  
  Site Privacy
                      Accessibility
                      Privacy Program
                      Copyrights
                      Vulnerability Disclosure
                      No Fear Act Policy
                      FOIA
                      Environmental Policy
                      Scientific Integrity
                      Information Quality Standards
                      Commerce.gov
                      Science.gov
                      USA.gov
                      Vote.gov