Maturity Model for Performance Measurement Practice

Welcome to the maturity assessment model for your performance measurement practice.

Performance measurement is more than a tracking mechanism for results. When done properly, it is a strategic tool for companies to uncover deficiencies and make sound decisions for action. Without it, companies risk investing valuable resources in the least impactful work.

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The maturity model covers the 12 key elements for sound performance measurement. For each element, four levels of maturity are described.

As you work through the 12 questions, select a maturity level (M-1, M-2, M-3, or M-4) that reflects closely what you do. If it happens to fall between two maturity levels, pick the level that is more than 80% true. The ratings will give you an idea on areas where more work is needed.

Measures

1. A performance measure is an indicator used to reflect the outcome you want to monitor. On the design and selection of performance measures, what approach do you take?*

M-1: We use predominantly financial measures and basic functional measures.

M-2: We include industry benchmark measures to supplement a basic list.

M-3: We brainstorm ideas for measures to reflect desired business outcomes.

M-4: We use a deliberate process to clearly define measures that reflect success.

2. There will be multiple performance measures used in different areas of the business. How would you describe the linkages of the different performance measures used?*

M-1: We use a mix of measures that appear to be logical.

M-2: We have a combination of lead and lag indicators at the functional level.

M-3: We use functional measures that loosely support the corporate strategy.

M-4: We have tightly linked measures from corporate to business units to teams across the whole organization.

3. How many performance measures do you use to track results on a regular basis?*

M-1: We include everything measurable.

M-2: Each functional area maintains a list that focuses on its own mandate. However, we are challenged to determine which ones are useful for reporting up.

M-3: The functional areas monitor their key activities and those that have cross impacts on other areas.

M-4: We focus on a handful of critical measures that hone in on core activities at each work level to drive strategic results.

Data

4. How would you describe the quality of data used to compile the results?*

M-1: We don’t have the data needed and rely on surrogate data.

M-2: We have known data gaps but they can be accommodated.

M-3: We have the data needed or are able to generate them from building on reliable data.

M-4: We have complete, consistent, and timely data.

5. For your data needs, how would you describe the accessibility of data?*

M-1: We have cumbersome processes to extract data from various sources.

M-2: We use a batch approach to extract data from the sources and upload them to the reporting tool.

M-3: We access data through a data warehouse or data lake.

M-4: We have expedient access to real-time data.

6. What systems and tools do you use to create the report or dashboard?*

M-1: We use Excel to prepare the report/dashboard, with data exported from multiple sources.

M-2: We use native reporting capabilities in the source applications, and supplement them with Excel where necessary.

M-3: We develop custom reports/dashboards in existing applications.

M-4: We use a business analytics tool to create dashboard, with easy integration with the data sources.

Ownership

7. How do you assign accountability for target performance?*

M-1: We assign high level ownership through the budgeting exercise.

M-2: We explicitly assign target performance for non-financial measures by function.

M-3: We assign performance accountability for key processes.

M-4: We have clear ownership and line-of-sight at all levels from corporate to business unit to team to job function and process.

8. Upon reviewing the results, how are follow-up actions executed?*

M-1: We rely on the budget owners to take necessary actions.

M-2: Each functional owner works independently to deliver targets.

M-3: There is limited collaboration among owners to optimize results.

M-4: We have full collaboration among owners across the organization to align decisions and actions.

9. In conducting the results review and follow up work, how much discipline is exercised?*

M-1: We do regular reviews of the financial results but have adhoc approaches for other measures.

M-2: We are diligent with results review at the functional level but are inconsistent with follow-up actions.

M-3: We are quite disciplined with the results review and identification of follow-up actions, despite a lack of follow-through to ensure changes are made.

M-4: We have scheduled reviews where issues are tabled; there are consistent follow-up and follow-through across the organization.

Culture

10. How much support do you have from the managers and leaders on performance measurement?*

M-1: Managers and leaders do what is needed to satisfy reporting requirements.

M-2: Select managers and leaders acknowledge the significance of performance measurement and educate others within their own areas.

M-3: Most managers and leaders recognize the business benefits of performance measurement and work actively to rally broader support.

M-4: All managers and leaders are fully aligned on the approach to performance measurement and they walk the talk.

11. Do you have employee buy-in?*

M-1: Employees view measurement as a necessary business management exercise and have a ‘just do it’ mindset.

M-2: A small percentage of the employees understand the purpose, and most are cautious about sharing poor results.

M-3: The majority of the employees recognize the advantage of performance measurement; they are open to discuss issues and collaborate on solutions.

M-4: We have full embracement of performance measurement by all employees; they have a keen interest to improve business results.

12. Do you educate employees about performance measurement?*

M-1: We don’t educate employees about the value of performance measurement. There is infrequent communication of results beyond the senior leadership team.

M-2: There is little education on performance measurement. Functional leaders treat measurement as their responsibility to hone performance for their respective areas.

M-3: We have pockets of managers and leaders who take the lead to educate their subordinates and collaborate with other teams they work with to improve performance.

M-4: We have regular dialogues about results at all levels to demonstrate value in leveraging performance measurement.