Measurement
“The art of measurement, by showing us the truth, would have brought our soul into repose of abiding by the truth, and so would have saved our life”.
Protagoras
What are the benchmarks in your business? How do you know when your action plan is working? How do you determine what to measure? These are important questions successful business owners and leaders ask themselves.
So, what are the appropriate benchmarks which, if measured, would impact your action plan based upon certain results? Most companies have sales related measurements. It’s critical to stay abreast of market changes and sales performance by closely watching for trends. Drilling down into the total sales revenue figure, you must also analyze where the sales come from within your product mix. Determining this will help you analyze volume and margins, and may cause you to alter your focus on a certain product.
Performance measurement is key to managing staff. Regular, effective performance reviews must be carried out without fail. Employees need feedback, and a full understanding of employer expectations will result in better performance. Poor performance which is not dealt with by management feeds bad morale with other performers.Â
Performance reviews can be tied to key performance indicators, which will not only apply to the employee but could impact team performance measurements. Key performance indicators are those areas critical to the operation that clearly identify the success of a department’s role in delivering the results. For example, turnover ratio would be a valuable KPI measurement.
Measurement parameters are most effective when they are posted for all to see. Whenever possible, create large wall areas for staff to clearly evaluate how each day’s productivity sorts to goal achievement. This is a motivator for employees to perform, and provides an example of open, clearly communicated expectations. You can’t measure what you can’t see.
Once measurement parameters are established, they must be reviewed and altered if necessary in order for the measurement to remain meaningful to your staff and to you. Allow employees to participate in the decision making process to determine what should be measured, and how often. Employees will respond better when they are vested in the process.
Effective measurement is a key component to any business achieving success. Though it takes time and planning, measurement pushes results. It allows management to evaluate what is working, and what is not working.
Coach Charrise
