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Lifecycle Lifecycle Performance Performance Professionals Professionals Cause and effect: The way perspectives, objectives, and/or measures interact in a series of cause-and-effect relationships demonstrate the impact of achieving an outcome. For example, organizations may hypothesize that the right employee training (Employee, Learning and Growth Perspective) will lead to increased innovation (Internal Process Perspective), which will in turn lead to greater customer satisfaction (Customer Perspective) and drive increased revenue (Financial Perspective). Comments: Used to provide further information about a performance management object including questions, issues or background. Composite Measure: A measure based on a number of performance measures, weighted to reflect relative importance. Composite measures provide summary level information to higher management. Customer-facing operations: Encompasses those facets of the organization that interface directly with customers; typically an organization’s sales, service and marketing functions. Customer-facing operations are also referred to as the demand chain. Customer Perspective: One of the four standard perspectives used with the Balanced Scorecard. Measures are developed based on the answer to two fundamental questions - who are our target customers and what is our value proposition in serving them? The role of the Customer perspective is often elevated in public sector and not for profit applications of the Balanced Scorecard. Customer Relationship Management (CRM) - CRM entails all aspects of interaction a company has with its customer. It includes methodologies, software, and usually Internet capabilities that help an organization manage customer relationships in an organized way. The Customer Perspective of the Balanced Scorecard may contain references to a CRM program. Dashboard: A visualization of important information, often tailored to a specific role or point of view, consolidated and arranged on a single screen so the information can be monitored at a glance. For most deployments, this information contains actual results represented as metrics. Economic Value Added (EVA): A financial performance measure aiming to determine whether a company or activity has truly created shareholder value; in other words, EVA aims to distinguish real profit from paper profit. EVA is determined by calculating a business’s after-tax cash flow minus the cost of the capital it deployed to generate that cash flow. Effectiveness Enhancement System: An approach to performance management developed by Bacal & Associates. Its strength is that it © 2009 Lifecycle-performance-pros.com All rights reserved 64
Lifecycle Lifecycle Performance Performance Professionals Professionals recognizes that BOTH manager and employee need to define how performance is to be planned and evaluated. The employee becomes the "customer" of the process. And this puts the employee and manager on the same side. Employee Learning and Growth Perspective: One of the four standard perspectives used with the Balanced Scorecard. Measures in this perspective are often considered "enablers" of measures appearing in the other three perspectives. Employee skills, availability of information, and organizational climate are often measured in this perspective. Financial Perspective: One of the four standard perspectives used with the Balanced Scorecard. Financial measures inform an organization whether strategy execution, which is detailed through measures in the other three perspectives, is leading to improved bottom line results. In public sector and not for profit applications of the Balanced Scorecard measures in the Financial perspective are often viewed as constraints within which the organization must operate. Forecast: Forecast usually refers to a projected value for a metric. Organizations will often create a forecast that is different than their target for a given metric. There are multiple types of forecasting methods for creating forecasts based on past data and usage of them varies widely across organizations. Goal: See objective below. Goal plan: Used primarily in the public and not-for-profit sector, a goal plan is a performance plan outlining an organization’s goals and/or objectives. Also see Strategy plan below. Goal diagram: Generically used to describe the one-page visualization that shows the different goals of the organization and how they are related. Examples of goal diagrams include strategy plans, strategy maps and process diagrams. Government Performance and Results Act (GPRA): Enacted in 1993, the Government Performance and Results Act (GPRA) requires federally-funded agencies to develop and implement an accountability system based on performance measurement, including setting goals and objectives and measuring progress toward achieving them. Emphasizes accomplishments/outcomes and performance-based budgeting versus expenditures and zero-based budgeting. Human capital: A metaphor for the transition in organizational value creation from physical assets to the capabilities of employees ― knowledge, skills, © 2009 Lifecycle-performance-pros.com All rights reserved 65
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