What Are the Best Tips for Measurement and Evaluation?

Osmand Vitez
Osmand Vitez
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In business, measurement and evaluation are ongoing processes to ensure a company is effective and efficient at obtaining goals. Individuals at all levels are responsible for engaging in these activities, from owners to executives to operational managers. The best tips for measurement and evaluation include being consistent and reliable, having a clear and understandable review process, and focusing on a particular purpose, such as cost or quality. Other more specific aspects may also be in the process based on the company’s actions and needs for review. Reviewers should keep written notes and documentation after each review process.

Measurement and evaluation processes need to be consistent and reliable throughout a company’s operations. For example, a reviewer should attempt to run measurements at specified points in a business year. This allows all information gathered to be somewhat representative of the same amount of time for each review. This also leads into the reliability portion of the review process. Having a system that will create review data for performance management allows owners and executives to rely on performance management for improving the company’s operations.

Not all activities in a business are simple; in many cases, complex operations do exist. Measurement and evaluation processes should not be complex, however. Owners and managers should have a process that is both clear and understandable for all parties involved. For example, those gathering data for the review should understand how to complete the process and whom it is for. Then, the individual who meets with the overseeing reviewer can also present clear and understandable data to make the best decisions for review.

All business activities should have a clearly defined purpose. This allows workers to complete tasks in a manner that will suit all parties involved, from owners to managers to customers. Measurement and evaluation processes should be no different. The reviewer should choose a goal or purpose for the measurement and evaluation process. For example, an owner may desire measurements on costs associated with production or other standard business activity; operational managers may focus on product quality.

Most measurement and evaluation processes are for internal use only. Companies may need to comply with external regulations that require them to release such data, but that is not always the case. The end purpose should always be in focus. The reports may also need to go in a file for future reference. This allows for a quick comparison among multiple evaluation processes.

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Discussion Comments


@everetra - These are all good observations for external benchmarks that affect the customer. But as the article points out, sometimes you just need to make sure that you are complying with laws and regulations.

It doesn’t affect your bottom line necessarily and most investors won’t see the effect of what you’re doing, but you have to be in compliance.

Take HIPPA compliance for example. I once worked for a healthcare organization and this was a big deal. I remember one of the best things we did to ensure compliance was to create a checklist of items that we needed to review on a periodic basis.

With that checklist we knew where we stood. HIPPA was there for our protection, to ensure that we didn’t incur any needless liability and that we always took the proper measures to protect patients’ privacy and information.


@SkyWhisperer - As an investor I look at a company’s quarterly reports for a snapshot of how they’re doing.

Depending on the nature of the business, I will have different criteria for measuring how well they’re doing. If they sell products as opposed to services, then it’s easier.

I want to know how many widgets they sold in that quarter, what their gross revenue was and what their profit margins were. I want to see solid profit margins, not just good numbers on the revenue front.

I would suppose that these are the benchmarks that the company also uses internally. As the article points out, while there may be some degree of complexity to their business model, there shouldn’t be any complexity about understanding how well they’re doing.

They are in business to deliver the best possible product for the least cost, thus maximizing profits.


I work in the service industry; software consulting to be specific. We do have a product but we also service what we sell. We provide technical support to all our customers over the phone and at times on location.

We establish benchmarks that help us to establish how well we are doing in technical support. We look at the number of calls received, average call resolution time and the number of times that a support call had to be escalated to a tier two or a tier three management professional for resolution.

Lately, we’ve been doing very well. The goal is always to resolve calls as quickly as possible and reduce the amount of calls that need escalation.

Every week management generates a report which is a metric showing us how we are doing, and this is one way we use to measure our progress.

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