PART I:     Performance measurement inPractice and its challenges

Abstract

By its nature performance measurement is a diverse subject. Researchers with functional backgrounds as varied as accounting, operations management, marketing, finance, economics, psychology and sociology are all actively working in the field.

This incredible diversity brings with it both challenges and opportunities. It results in a fascinating richness, but also makes it extremely difficult for each generations of researchers to build upon one another’s work. A significant barrier stems from the fact that, traditionally, the way academic careers develop is through functional specialization. Accountants talk to accountants. Operations managers meet with operations managers. Marketing specialists network with other marketing specialists. The result is deep and rich streams of functionally specialized research, often with limited cross-fertilization.

The aim of first and second sections begin the process of redressing this shortcoming by drawing together several functionally based reviews of performance measurement. These sections concentrates largely on measurement theory and its definationation. As depicted in  Section Two that explores performance as one of those ‘‘suitcase words in which everyone places the concepts that suit them, letting the context take care of the definition’’. They argue that this is one of the reasons why it is so difficult to develop theories in the field, and suggest that performance should be equated with purposeful action taken today designed to produce meaningful results tomorrow. Building upon this theme, propositions designed to illustrate how performance can best be defined and understood through causal models shared by organizational decision makers is highlighted. The subsequent sections in the part of this book has drawn on practical experiences and focus on measurement in practice, albeit measurement in difficult areas of practice.

The third section, reviews measurement from an accounting and finance perspective and explores the different roles of measurement. It is argues that the accounting community implicitly recognizes that measurement systems have three fundamentally different roles in organizations. First, they provide a tool for financial management. Second, they provide an objective for overall business performance. Third, they provide a means of motivation and control. A key theme contribution is that far too often academics and practitioners do not recognize these three different roles, and the result can be significant confusion, especially when a measurement system designed to fulfil one role is used for another.

The fourth section contribution provides an extensive review of marketing performance measurement. The section explores the theoretical and practical challenges of measuring marketing performance. Marketing performance measurement has become a particularly important issue in the past several years, and is complicated by inconsistent definition, varying organizational roles and the lagged effects of many marketing tools on customer behaviour. The section chapter reviews these challenges, and then presents the means by which various scholars and practitioners have addressed them, with a special emphasis on research and practice. The section concludes with several issues and challenges to move marketing performance measurement forward. The section additionally explores measurement from the customer perspective, introducing the concept of marketing dashboards and asking what they should contain. The different measures that have been proposed over the years to track marketing performance, arguing that the search for a ‘‘silver metric’’ is somewhat futile. Instead, they call on marketers to adopt marketing dashboards that reflect the complexity of marketing accountability better.

The fifth section is based on the operations management perspective explores the evolution of performance measurement research in operations, examining three different time periods. The first, prior to the 1980s, was a difficult period for the operations management community, as it was largely marginalized from the mainstream academy. The second, 1980–2005, saw significant developments in the field of operations management, stimulated partly by the emergence of Japan as a major economic power, which in turn resulted in a surge of interest in how better to manage operations. The third phase, since 2005, explores the question of ‘‘what next?’’ for performance measurement research in operations.

In the sixth section explore the issue of supply chain performance measurement. This contribution builds on some of the themes raised in this section, extending the analysis to encompass the entire supply chain. It is argued that many of the so-called supply chain metrics currently in use are no more than logistics measures, and call for a more holistic approach to supply chain measurement.

Section seven is on risk and performance measurement. Its link between measurement and risk from three perspectives: in assessing organizational performance, in managing the organization and in reading the individual. It is argued that performance measurement and risk are inextricably linked, on the grounds that discussing performance without reference to risk makes for meaningless comparisons.

On section eight the contribution moves firmly inside the organization, and asks how knowledge workers should be measured. This topic is particularly important in the developed economies. There, increasing numbers of firms are finding that they cannot compete on the basis of cost and therefore have to compete on the basis of value delivered. To create value, firms rely on their knowledge workers. The particular challenges associated with the measurement of knowledge workers are explored, arguing that they can be broadly categorized under the three headings of observability, motivation and TASK (talent, skill and knowledge) differentials. In reviewing the implications of these challenges, an important distinction between measures for motivational purposes and measures for informational purposes is made, suggesting that the latter might be far more effective than the former for knowledge workers.

The ninth section explores the question of how radical innovation might be measured. The author presents the results of an in-depth investigation into whether patent citation analysis can provide accurate insight into the impact of particular innovations. It is noted that far too often, the length of time over which patent citation studies are carried out is too short, and argues that the impact of many patents can only be seen some ten years after they were originally registered. As well as raising some important theoretical questions. Important practical issues are raised on data show, for example, that collaboration can reduce the radicalism of innovation outputs.

Section ten again explores measurement in difficult-to-measure contexts this time from the perspective of project management. Present a novel measurement methodology – context-based measurement – that captures data on effort with associated contextual information. Illustrate not only the structure of context-based measurement but also its practical application, through a case study involving an engineering firm.

The eleventh section of this book part examine the rationale underlying the development of composite measures of health care performance. The advantages and disadvantages of constructing a composite indicator and describe the methodological choices made at each step in the construction of a composite are illustrated. The section also describes some examples of composite indicators in health care, highlighting good (and bad) practice in their development. The section concludes with some thoughts on the future challenges in the development of composite performance indicators

Section twelve analyses public service performance measurement, the different aspects of the public sector that could be measured and its challenges and gives a wayward.

The thirteen section argues that performance has the potential to become a new management discipline. Starting with the question ‘‘what is performance?’’, it argues that performance measurement, if used correctly, offers the potential for managers to understand which of the activities undertaken generate revenues that exceed costs. Developing this theme, he introduces the notion of activity based revenue as a measurement methodology and illustrates how this approach has the potential to overcome some of the shortcomings encountered in the measurement systems used by organizations today.

Section 1:    Performance Measurement redefined

It is almost impossible to realize individual, group and at large organizational performance levels until some feedback is generated. The outcomes of work as explained to employees in an organization is what is refered to as feedback. An institution uld seek to create a link between the behavior of employees and the organizational goals through the provision of feedback. If performance is measured, then the organization creates a basis for improvement. Measurement involves the quantification of performance inorder to stimulate positive action.

Traditional performance measures based on cost accounting information provide little to support organizational excellence, because they do not map process performance and improvements seen by the customer. This chapter shows how performance measurement is important in identifying opportunities, and comparing performance internally and externally. A performance measurement framework will be recommended at the organizational process at individual levels. A system of review will urther be availed.

The Deming cycle  of  Plan,  Do,  Check,  Act  (PDCA)  is  a  useful  design  aid  for measurement systems. It will be stressed in this chapter that for organizational performance measurement, the strategic objectives must be converted into critical success factors (CSFs), and appropriate key performance indicators (KPIs) developed.

Additionally, the chapter emphasizes that of importance is to begin with the simple measures, improve on them while comparing their value with their subsequent costs of production. The separation of process management and process performance is important and all critical parts of the process should be measured. Process owners should be involved in defining the performance measures which must reflect customer requirements.

The chapter also explains that performance review techniques, such as quality costing and self-assessment, are useful to identify improvement opportunities and motivate performance improvement. There is some discussion of the nature of the feedback to the benchmarking and strategic planning processes and how these may determine the course towards measured total organizational excellence.

Performance measurement and the improvement cycle

Traditionally, performance measures and indicators have been derived only from cost-accounting information, often based on outdated and arbitrary principles. These provide little motivation to support attempts to improve performance and, in some cases, actually inhibit continuous improvement because they are unable to map process performance. In the organization that is to succeed over the long term, performance must begin to be measured by the improvements seen by the customer. In the cycle of never-ending improvement, measurement plays an important role in:

• tracking progress against organizational goals
• identifying opportunities for improvement
• comparing performance against internal standards
• Comparing performance against external

The author and his colleagues have seen many examples of so-called performance measurement systems that frustrated improvement efforts. Various problems include systems that:

• Produce irrelevant or misleading
• Track performance in single, isolated
• Generate financial measures too late, g. quarterly, for mid-course corrections or remedial action.
• Do not take account of the customer perspective, both internal and external.
• Distort management’s understanding of how effective the organization has been in implementing its
• Promote behaviour which undermines the achievement of the strategic objectives.

Typical harmful summary measures of local performance are purchase price, machine or plant efficiencies, direct labour costs, and ratios of direct to indirect labour. These are incompatible with performance improvement measures such as process and throughput times, delivery performance, inventory reductions, and increases in flexibility, which are first and foremost non-financial. Financial summaries provide valuable information of course, but they should not be used for control. Effective decision-making requires direct physical measures for operational feedback and improvement.

One example of a ‘measure’ with these shortcomings is return on investment (ROI). ROI can be computed only after profits have been totaled for a given period. It was designed therefore as a single-period, long-term measure, but it is often used as a short-term one. Perhaps this is because most executive bonus ‘packages’ in the West are based on short-term measures. ROI tells us what happened, not what is happening or what will happen, and, for complex and detailed projects, ROI is inaccurate and irrelevant.

Many managers have a poor or incomplete understanding of their processes and products or services, and, looking for an alternative stimulus, become interested in financial indicators. The use of ROI, for example, for evaluating strategic requirements and performance can lead to a discriminatory allocation of resources. In many ways the financial indicators used in a large number of businesses have remained static, while the environment in which they operate has changed dramatically.

Traditionally, the measures used have not been linked to the processes where the value-adding activities take place. What has been missing is a performance measurement framework that provides feedback to people in all areas of business operations and stresses the need to fulfil customer needs.

The critical elements of a good performance measurement framework are:

• Leadership and
• Full employee
• Good
• Sound implementation
• Measurement and
• Control and
• Achieving and maintaining standards of

The Deming cycle of continuous improvement – plan, do, check, act clearly requires measurement to drive it, and yet it is a useful design aid for the measurement system itself:

Plan: establish performance objectives and standards.

Do:    measure actual performance.

Check: compare actual performance with the objectives and standards – determine the gaps.

Act:    take the necessary actions to close the gaps and make the necessary improvements.

In this chapter a performance measurement framework is proposed, based on the strategic planning and process management models outlined in Chapters 3 and 5.

The framework has four elements related to: strategy development and goal deployment, process management, individual performance management, and review (Figure 14.1). This reflects an amalgamation of the approaches used by a range of organizations in performance measurement.

As we have seen in earlier chapters, the key to strategic planning and goal deployment is the identification of a set of critical success factors (CSFs) and associated key performance indicators (KPIs). These factors should be derived from the organization’s mission, and represent a balanced mix of stakeholders. Action plans over both the short- and long-term should be developed, and responsibility clearly assigned for performance. The strategic goals of the organization should then be clearly communicated to all individuals, and translated into measures of performance at the process/functional level.

The key to successful performance measurement at the process level is the identification and translation of customer requirements and strategic objectives into an integrated set of process performance measures. The documentation and management of processes has been found to be vital in this translation process. Even when a functional organization is retained, it is necessary to treat the measurement of performance between departments as the measurement of customer–supplier performance.

Figure xx     Performance measurement framework

Performance measurement at the individual level usually relies on performance appraisal, i.e. formal planned performance reviews, and performance management, namely day-to-day management of individuals. A major draw- back with some performance appraisal systems, of course, is the lack of their integration with other aspects of performance measurement.

Performance review techniques are used by many world class organizations to identify improvement opportunities, and to motivate performance improvement. These companies typically use a wide range of such techniques and are innovative in performance measurement in their drive for continuous improvement.

The links between performance measurements at the four levels of the framework are based on the need for measurement to be part of a systematic process of continuous improvement, rather than for ‘control’. The framework provides for the development and use of measurement, rather than prescriptive lists of measures that should be used. It is, therefore, applicable in all types of organization.

The elements of the performance measurement are distinct from the budgetary control process, and also from the informal control systems used within organizations. Having said that, performance measurement should not be treated as a separate isolated system. Instead measurement is documented as and when it is used at the organizational, process and individual levels. In this way it can facilitate the alignment of the goals of all individuals, teams, departments and processes with the strategic aims of the organization and incorporate the voice of the stakeholders in all planning and management activities.

A number of factors have been found to be critical to the success of performance measurement systems. These factors include the level of top management support for non-financial performance measures, the identification of the vital few measures, the involvement of all individuals in the development of performance measurement, the clear communication of strategic objectives, the inclusion of customers and suppliers in the measurement process, and the identification of the key drivers of performance. These factors will need to be taken into account by managers wishing to develop a new performance measurement system, or refine an existing one.

The performance measurement framework

In most organizations there are no separate performance measurement systems. Instead, performance measurement forms part of wider organizational management processes. Although elements of measurement can be identified at many different points within organizations, measurement itself usually forms the ‘check’ stage of the continuous improvement PDCA cycle. This is important since measurement data that is collected but not acted upon in some way is clearly a waste of resources.

The four elements of the framework in Figure 14.1 are:

Level 1 Strategy development and goal deployment leading to mission/vision, critical success factors and key performance indicators (KPIs).

Level 2 Process management and process performance measurement (including input, in-process and output measures, management of internal and external customer–supplier relationships and the use of management control systems).

Level 3 Individual performance management and performance appraisal. Level 4 Review performance (including internal and external benchmarking, self-assessment against quality award criteria and quality costing).

Level 1 – Strategy development and goal deployment

The first level of the performance measurement framework is the development of organizational strategy, and the consequent deployment of goals through- out the organization. Steps in the strategy development and goal deployment measurement process are (see also Chapter 3):

• Develop a mission statement based on recognizing the needs of all organizational stakeholders, customers, employees, shareholders and
• Based on the mission statement, identify those factors critical to the success of the organization achieving its stated mission. Again CSFs should represent all the stakeholder groups, customers, employees, share- holders and
• Define performance measures for each CSF, e. key performance indicators (KPIs). There may be one or several KPIs for each CSF.

Definition of KPIs should include:

1. Title of
2. data used in calculation of
3. method of calculation of
4. sources of data used in
5. proposed measurement
6. responsibility for the measurement

• Set targets for each If KPIs are new, targets should be based on customer requirements, competitor performance or known organizational criteria. If no such data exists, a target should be set based on best guess criteria. If the latter is used, the target should be updated as soon as enough data is collected to be able to do so.
• Assign responsibility at the organizational level for achievement of desired performance against KPI Responsibility should rest with directors and very senior managers.
• Develop plans to achieve the target performance. This includes both action plans for one year, and longer-term strategic
• Deploy mission, CSFs, KPIs, targets, responsibilities and plans to the core business processes. This includes the communication of goals, objectives, plans, and the assignment of responsibility to appropriate individuals.
• Manage organizational processes (see Level 2 of the framework).
• Measure performance against organizational KPIs, and compare to target
• Based on this comparison, identify areas with high leverage for improvement, and update action
• Communicate performance and proposed actions throughout the
• At the end of the planning cycle compare organizational capability to target against all KPIs, and begin again at Step 2
• Reward and recognize superior organizational

Strategy development and goal deployment are clearly the responsibilities of senior management within the organization, although there should be as much input to the process as possible by employees to achieve ‘buy-in’ to the process.

The system outlined above is similar to the policy deployment approach known as Hoshin Kanri, developed in Japan and adapted in the West.

Key performance indicators (KPIs)

The derivation of KPIs may follow the ‘balanced scorecard’ model, proposed by Kaplan, which divides measures into financial, customer, internal business and innovation and learning perspectives (Figure xx).

A balanced scorecard derived from the business excellence model described

In Chapter 7 would include financial and non-financial results, customer satisfaction (measured via the use of customer satisfaction surveys and other measures, including quality and delivery), employee factors (employee development and satisfaction), and societal factors (including community perceptions and environmental performance).

How do customers see us?

What must we excel at?

Can we continue to improve and create value?

Figure xx  The balanced scorecard linking per formance measures

Financial performance for external reporting purposes may be seen as a result of performance across the other KPIs, the non-financial KPIs assumed to be the leading indicators of performance. The only aspect of financial performance that is cascaded throughout the organization is the budgetary process, which acts as a constraint rather than a performance improvement measure.

In summary then, organizational KPIs should be derived from the balancing of internal capabilities against the requirements of identified stakeholder groups. This has implications for both the choice of KPIs and the setting of appropriate targets. There is a need to develop appropriate action plans and clearly define responsibility for meeting targets if the KPIs and targets are to be taken seriously.

Level 2 – Process management and measurement

The second level of the performance measurement framework is process management and measurement, the steps of which are:

• If not already completed, identify and map This information should include identification of:
  1. Process customers and suppliers (internal and external)
  2. customer requirements (internal and external)
  3. core and non-core activities
  4. measurement points and feedback
• Translate organizational goals, action plans and customer requirements into process performance measures (input, in-process and output). This includes definition of measures, data collection procedures, and measurement
• Define appropriate performance targets, based on known process capability, competitor performance and customer
• Assign responsibility for achieving performance
• Develop plans towards achievement of process performance
• Deploy measures, targets, plans and responsibility to all sub-processes.
• Operate
• Measure process performance and compare to target
• Use performance information to:
  1. implement continuous improvement
  2. identify areas for
  3. update action
  4. update performance
  5. redesign processes, where
  6. manage the performance of teams and individuals (performance management and appraisal) and external
  7. provide leading indicators and explain performance against organizational
• At the end of each planning cycle compare process capability to customer requirements against all measures, and begin again at Step
• Reward and recognize superior process performance, including sub- processes, and

The same approach should be deployed to sub-processes and to the activity and task levels.

The above process should be managed by the process owner, with inputs wherever possible from the owners of sub-processes. The process outlined should be used whether an organization is organized and managed on a process or functional departmental basis. If functionally organized, the key task is to identify the customer–supplier relationships between functions, and for functions to see themselves as part of a customer–supplier chain.

Performance measures

Performance measures used at the process level differ widely between different organizations. Some organizations measure process performance using a balanced scorecard approach, whilst others monitor performance across different dimensions according to the process. Whichever method is used, measurements should be identified as input (supplier), in-process, and output (or results-customers).

It is usually at the process level that the greatest differences can be observed between the measurement used in manufacturing and services organizations. However, all organizations should measure quality, delivery, customer service/satisfaction, and cost.

Depending on the process, measurement frequency varies from daily, for example in the measurement of delivery performance, to annual, for example in the measurement of employee satisfaction, which has implications for the PDCA cycle time of the particular process(es). Measurement frequency at the process level may, of course, be affected by the use of information technology. Cross-functional process performance measurement is a vital component in the removal of ‘functional silos’, and the consequent potential for sub-optimization and failure to take account of customer requirements. The success of performance measurement at the process level is dependent on the degree of management of processes and on the clarity of the deployment of strategic organizational objectives.

Measuring and managing the whats and the hows

Busy senior management teams find it useful to distil as many things as possible down to one piece of paper or one spreadsheet. The use of KPIs, with targets, as measures for CSFs, and the use of performance measures for processes may be combined into one matrix which is used by the senior management team to ‘run the business’.

• the CSFs and their owners the whats
• the KPIs and their targets
• the core business processes and their sponsors the hows
• the process performance measures

It also shows the impacts of the core processes on the CSFs. This is used in conjunction with a ‘business management calendar’, which shows when to report/monitor performance, to identify process areas for improvement. This slick process offers senior teams a way of:

• gaining clarity about what is important and how it is measured;
• remaining focused on what is important and what the performance is;
• knowing where to look if problems

Level 3 – Individual performance and appraisal management

The third level of the performance measurement framework is the management of individuals. Performance appraisal and management are usually the responsibility of the direct managers of individuals whose performance is to be appraised. At all stages in the process, the individuals concerned must be included to ensure ‘buy in’.

Steps in performance and management appraisal are:

• If not already completed, identify and document job description based on process requirements and personal This information should include identification of:
  1. activities to be undertaken in performing the job;
  2. requirements of the individual with respect to the identified activities, in terms of experience, skills and training;
  3. requirements for development of the individual, in terms of personal training and development;
• Translate process goals and action plans, and personal training and development requirements into personal performance
• Define appropriate performance targets based on known capability and desired characteristics (or desired characteristics alone if there is no prior knowledge of capability).
• Develop plans towards achievement of personal performance
• Document 1 to 4 using appropriate forms, which should include space for the results of performance

• Manage performance. This includes:
  1. planning tasks on a daily/weekly basis;
  2. managing performance of the tasks;
  3. monitoring performance against task objectives using both quantitative (process) and qualitative information on a daily and/or weekly basis;
  4. giving feedback to individuals of their performance in carrying out tasks;
  5. giving recognition to individuals for superior
• Formally appraise performance against range of measures developed, and compare to target
• Use comparison with target to:
  1. identify areas for improvement;
  2. update action plans;
  3. update performance targets;
  4. redesign jobs, where This impacts Step 1 of the process.
• Update
• After a suitable period, ideally more than once a year, compare capability to job requirements and begin again at Step
• Reward and recognize superior

The above activities should be undertaken by the individual whose performance is being managed, together with their immediate superior.

The major differences in approaches in the management of individuals lies in the reward of effort as well as achievement and the consequently different measures used, and in the use of information in continuous improvement required to reward and recognize performance, including teamwork. Unlike management by objectives (MBO), where the focus is on measurement of results – which are often beyond the control of the individual whose performance is appraised – good performance management systems attempt to measure a combination of process/task performance (effort and achievement) and personal development.

The frequency of formal performance appraisal is generally defined by the frequency of the appraisal process usually with a minimum frequency of six months. Between the formal performance appraisal reviews, most organizations rely on the use of other performance management techniques to manage individuals. Measures of team performance, or of participation in teams, should be included in the appraisal systems where possible, to improve team performance. In many organizations, the performance appraisal system is probably the least successfully implemented element of the framework. Appraisal systems are often designed to motivate individuals to achieve process and personal development objectives, but not to perform in teams. One of the limitations of appraisal processes is the frequency of measurement, which could be increased, but few organizations would consider doing so.

Level 4 – Performance review

The fourth level of the performance measurement framework is the use of performance review techniques. Steps in review are as follows:

• Identify the need for review, which may come from:
  1. poor performance at the organizational or process levels against KPIs;
  2. identified superior performance of competitors;
  3. customer inputs;
  4. the desire to better direct improvement efforts;
  5. the desire to concentrate attention on the need for performance improvement.
• Identify method of performance review to be This involves deter- mining whether the review should be carried out internally within the organization, or externally, and the method that should be carried out. Some techniques are mainly internal, e.g. self-assessment, quality costing; whilst others, e.g. benchmarking, involve obtaining information from sources external to the organization. The choice should depend on:
  1. how the need for review was identified (see Step 1);
  2. the aim of the review, g. if the aim is to improve performance relative to competitors, external benchmarking may be a better option than internally measuring the cost of quality;
  3. the relative costs and expected benefits of each
• Carry out the
• Feed results into the planning process at the organizational or process
• Determine whether to repeat the exercise. If it is decided to repeat the exercise, the following points should be considered:
  1. frequency of review;
  2. at what levels to carry out future reviews, e.g. organization-wide or process-by-process;
  3. decide whether the review technique should be incorporated into regular performance measurement processes, and if so how this will be managed.

Review methods often require the use of a level of resources greater than that normally associated with performance measurement, often due to the need to develop data collection procedures, train people in their use, and the cost of data collection itself. However, review techniques usually give a broader view of performance than most individual measures.

The use of review techniques is most successful when it is based on a clearly identified need, perhaps due to perceived poor performance against existing performance measures or against competitors, and the activity itself is clearly planned and the results used in performance improvement. This is often the difference between the success and failure of quality costing and benchmarking in particular. The use of most of the review techniques has been widely documented, but often without regard to their integration into the wider processes of measurement and management.

Review techniques

Techniques identified for review include:

• Quality costing, using either prevention–appraisal–failure, or process costing
• Self-assessment against Baldrige, European Quality Award, or internally developed
• Benchmarking, internal or
• Customer satisfaction
• Activity based costing (ABC)

Summarizing performance measurement and feedback to the total organizational excellence model

The budgetary control process – often the most clearly identifiable aspect of management control within organizations – is separate from the performance framework. The information in the framework is used in performance improvement, whereas budgetary control acts as a constraint within which performance is managed. It is vital that performance measurement is integrated into the overall management process, and that the data is used sensibly to manage the continuous improvement of performance.

Performance measurement should be treated as a resource consuming activity, so that decisions made regarding the number of measures to be collected, the frequency of data collection, and the criticality of the information are sensible. The frequency of the measurement cycle depends on a number of factors. The different levels go through different PDCA cycles. For example, a daily PDCA cycle in a manufacturing unit will be very different to the annual cycle at the organizational level. The important factor is that the data is used in a constructive, systematic manner, to generate actions which improve performance.

Feedback on performance should be made to the total organizational excellence framework and to two components in particular – benchmarking and strategic planning. Feedback on process performance capability, whether after a re-engineering effort or just following a continuous improvement regime, or people development activities, needs to go into the benchmarking effort to confirm that improvement against the benchmarks is actually taking place.

Overall organizational performance should inform the strategic planning process, for it is possible that re-visioning of the business as a whole is appropriate following assessment of where we are.

The total organizational excellence framework offers a comprehensive assembly of some of the major business ‘buzz words’ and fashionable pro- grammes engaged in by many organizations during the 1980s and 1990s. Strategic planning, total quality management, process management, business excellence, self-assessment, benchmarking, business process re-engineering, continuous improvement and performance measurement have all had their high times and low times in some organizations. Putting them all together in a holistic view of the business can make the difference between a good organization and a world class one.

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Section 2:   Conceptual and operational

delineation of performance

A diversity of meanings of “performance”

A review of dictionaries (both French and English) shows a diversity of meanings for the term “performance”. It seems logical in the first place to list all these connotations, as their sum might provide a usable definition. Performance is:

• measurable by either a number or an expression that allows commu-nication (e.g. performance in management is a multi-person concept);
• to accomplish something with a specific intention (e.g. create value);
• the result of an action (the value created, however measured);
• the ability to accomplish or the potential for creating a result (e.g. customer satisfaction, seen as a measure of the potential of the organization for future sales);
• the comparison of a result with some benchmark or reference selected – or imposed – either internally or externally;
• a surprising result compared to expectations;
• acting out, in psychology;
• a show, in the “performing arts”, that includes both the acting or actions and the result of the actions as well the observation of the performers by outsiders; and