What are the top 10 things HR must know about performance metrics?

America is on the cusp of a serious labor shortage. Between now and the year 2012, the U.S. Bureau of Labor Statistics estimates that nearly 35 million Baby Boomers will retire, leaving businesses with one of the tightest labor markets in American history. Faced with this huge lack of talented and skilled workers, organizations must find better ways to maximize the contributions of their human capital in order to remain competitive. The heat is on HR and job one is fully understanding and implementing performance metrics. Here are the top ten things you should know about performance metrics:

1. Metrics should be credible,relevant and legitimate.

2. Metrics should actually measure the things that you want them to.

3. The results of performance metrics might be counterintuitive, so it will take a lot to get people (especially managers) on board.

4. Metrics should be easy and comparable. There should be no more than three to five measures for any outcome or result. Implement no more than one or two metrics at a time.

5. There should be industry-wide standards for the generation of performance metrics.

6. Most valuable metrics are public domain with open access.

7. Metrics drive continuous performance improvement and are continually developed.

8. Performance metrics should be applicable to both internal and external operations.

9. Metrics incent customer-driven performance.

10. Metrics are the lingua franca of management. They are not an end in and of themselves, but they must be calculated. They are the ultimate arbitrator and the final judge of performance.

Source:Ten lessons from the field: Short and simple (yet powerful) truths about performance metrics, developed by Nicholas C. Burkholder, Scott Golas and Jeremy Shapiro.