Chapter 25

PERFORMANCE MEASUREMENT OVERVIEW

1. The Mission Statement
This statement expresses the overall purpose of the organisation.
It will generally contain four elements:
๏ A purpose why the company exists
๏ A strategy the range of activities in which the business intends to compete, and how it
intends to compete
๏ Policies and standards guidelines which help staff decide what to do to carry out the strategy
๏ Values the beliefs and moral principles which lie behind the firm’s culture
Here is an example of an actual mission statement:

“McDonalds’ vision is to be the world’s best quick service restaurant experience. Being the
best means providing outstanding quality, service, cleanliness, and value, so that we make
every customer in every restaurant smile”.

2. Goals and Objectives

Having decided on the company’s mission, it is then necessary to have goals and objectives.
Goals are statements of general intentions, whereas objectives are more specific.
An example of a goal is: to improve profits
An example of an objective is: to increase the profit by 20% within 2 years.
 3. Critical Success Factors and Key Performance Indicators
Having decided on the objectives of the business, it is important that we measure how well
they are achieving these objectives.
There are two parts to this. First they must decide what are the critical success factors (CSF’s)
– the performance requirements that are most fundamental to being successful.
For example, two of McDonalds’ CSF’s could be quality, and speed of service.

Secondly, they must then decide how they are going to measure their performance in these
areas. For this they need key performance indicators (KPI’s) – aspects to which they can
actually put numbers to, which indicate whether they are doing better or worse.
For example, McDonalds might decide to measure quality by asking customers to complete a
form scoring the quality between 1 to 5, and then recording the average score. They could
decide to measure speed of service by keeping records of the time taken to serve each
customer and recording the average service time in minutes.
๏ As you will see in later chapters, it is important that a company has a range of KPI’s – both
financial (measuring, for example, profitability) and non-financial (measuring, for example,
quality).