What Is a Performance Measurement Control System?

A performance measurement control system is a tool used by organizations to control the performance and outcomes in business operations. It is designed to help managers make decisions regarding how business is conducted.

Principles

Performance measurement control systems contain several key principles: All work activity must be measured; if an activity cannot be measured, its processes cannot be improved; all measured work should have a predetermined outcome regarding performance.

Purpose

A performance measurement control system is designed to help organizations improve performance issues. Every process of a business' operations is studied through this system to improve the performance. When all activities have improved performance, the organization's profitability should increase.

Process

Analysts (managers) determine what the outcome of each particular activity should be. If an activity cannot be measured, the organization tries to eliminate it. After each activity is measured, it is compared to the desired results. If the activity is not performing up to the desired outcome, changes to the activity are implemented to improve performance.

References

• Three Sigma, Inc.: Performance Measurement 101
• 1000 Ventures: Why Measure Performance?