Performance is the end result achieved after of the activities. Effective performance measurement is of key importance in ensuring the successful implementation of an organization's strategy. It is about monitoring an organization's effectiveness in fulfilling its own predetermined goals or the requirements of stakeholders. 

Today, the organizations are operating in the contingent factors. So, it is necessary to understand the contingent factors that need to be in place regardless of philosophical beliefs, if a performance measurement system is to work successfully in an organization.

Corporate performance measurement emphasizes the alignment of objectives, measures, strategic decision making and rewards with the end result of the activities. It is not possible to measure performance unless it’s clear what an organization is trying to achieve. The environment in which any organization operates is constantly changing, so performance measures should be reviewed over time. The company needs to consider revising the performance measures due to following drivers of change;

  • decrease in profitability;
  • change in strategy;
  • enhance shareholder value;
  • redesign of business processes;
  • new technology;
  • new competition;
  • attract/retain people.

Factors required for a successful performance measurement system
It must be integrated with the overall strategy of the business
There must be a system of feedback and review
The performance measurement system must be comprehensive
The system must be owned and supported throughout the organization
Measures need to be fair and achievable
The system needs to be simple, clear and understandable.