scorecard Due today 10/21/18

Required information on Metrics

Numbers are the language of business. Numbers are measurements of performance for

companies, for business units, and for individuals. These performance measurements determine

whether companies, business units, and individuals are succeeding or failing in r

eaching their

objectives. If the measurements are favorable, then companies are succeeding, employees are

earning increased compensation and greater job security, customers are pleased, suppliers are

winning more orders, the local community is benefiting,

and investors are earning good returns.

However, if the measurements are unfavorable, then companies are not succeeding, employees

are earning constant or reduced compensation and losing job security, customers are displeased,

suppliers are winning fewer o

rders, the local community is being harmed, and investors are

earning low or even negative returns. Therefore performance measurement numbers are of

crucial importance. These performance measurement numbers are known as "metrics."

It is very important to u

nderstand what a metric is. To be clear, a metric means a measurement.

There are three kinds of measurements:

1.

Nominal: a nominal scale assigns items to a category. For example, the category may be

a simple "yes" or "no." In the case of a family, a nominal scale assigns items to categories

like grandfather, grandmother, father, mother, son or daughter. In the case

of an

automobile, categories could be small sedan, midsize sedan, large sedan, SUV, etc.

2.

Ordinal: an ordinal scale identifies items in order of magnitude. For example, a customer

survey might ask for ratings of service on a scale of 1 through 5, where 5 is

best. That

means a score of 4 is better than a score of 2. But it does not mean that a 4 is twice as

good as a 2, or that a 4 is four times as good as a 1.

3.

Cardinal: a cardinal scale is also known as a ratio scale. For example, the numbers 1, 2, 3,

... re

present a cardinal scale. For a ratio scale, 12 is four times 3, and two times 6.

So a metric must be either a nominal or ordinal or cardinal measurement. Anything else is not a

metric.

ROE > 20% is a metric. "Increase Sales Revenue by 5%" is a metric.

"Su

rvey Customers" is not a metric. Increase % customer satisfaction as measured by a survey is

a metric

***************

For each metric each period there are:

(a) target values,

(b) actual values, and

(c) a methodology for obtaining the data and calculating

the actual values.

Required information on Metrics

Numbers are the language of business. Numbers are measurements of performance for

companies, for business units, and for individuals. These performance measurements determine

whether companies, business units, and individuals are succeeding or failing in reaching their

objectives. If the measurements are favorable, then companies are succeeding, employees are

earning increased compensation and greater job security, customers are pleased, suppliers are

winning more orders, the local community is benefiting, and investors are earning good returns.

However, if the measurements are unfavorable, then companies are not succeeding, employees

are earning constant or reduced compensation and losing job security, customers are displeased,

suppliers are winning fewer orders, the local community is being harmed, and investors are

earning low or even negative returns. Therefore performance measurement numbers are of

crucial importance. These performance measurement numbers are known as "metrics."

It is very important to understand what a metric is. To be clear, a metric means a measurement.

There are three kinds of measurements:

1. Nominal: a nominal scale assigns items to a category. For example, the category may be

a simple "yes" or "no." In the case of a family, a nominal scale assigns items to categories

like grandfather, grandmother, father, mother, son or daughter. In the case of an

automobile, categories could be small sedan, midsize sedan, large sedan, SUV, etc.

2. Ordinal: an ordinal scale identifies items in order of magnitude. For example, a customer

survey might ask for ratings of service on a scale of 1 through 5, where 5 is best. That

means a score of 4 is better than a score of 2. But it does not mean that a 4 is twice as

good as a 2, or that a 4 is four times as good as a 1.

3. Cardinal: a cardinal scale is also known as a ratio scale. For example, the numbers 1, 2, 3,

... represent a cardinal scale. For a ratio scale, 12 is four times 3, and two times 6.

So a metric must be either a nominal or ordinal or cardinal measurement. Anything else is not a

metric.

ROE > 20% is a metric. "Increase Sales Revenue by 5%" is a metric.

"Survey Customers" is not a metric. Increase % customer satisfaction as measured by a survey is

a metric

***************

For each metric each period there are:

(a) target values,

(b) actual values, and

(c) a methodology for obtaining the data and calculating the actual values.