The performance prism model is a framework for evaluating the performance of an organization. It was developed by Neely, Adams, and Kennerley in 2002 as an alternative to traditional financial performance measures. The model suggests that organizations should consider a range of performance measures, including both financial and non-financial indicators, in order to get a complete picture of their performance.
The performance prism model consists of six dimensions: customer, financial, internal process, learning and growth, employee, and societal. Each dimension represents a different aspect of organizational performance and is associated with a set of performance indicators.
The customer dimension focuses on the needs and expectations of the organization's customers. Key performance indicators in this dimension include customer satisfaction, loyalty, and retention.
The financial dimension measures the financial health of the organization. Key performance indicators in this dimension include profitability, return on investment, and shareholder value.
The internal process dimension focuses on the efficiency and effectiveness of the organization's processes and systems. Key performance indicators in this dimension include cycle time, defect rate, and capacity utilization.
The learning and growth dimension measures the organization's ability to continuously improve and innovate. Key performance indicators in this dimension include employee training and development, knowledge management, and research and development.
The employee dimension assesses the well-being and satisfaction of the organization's employees. Key performance indicators in this dimension include employee engagement, retention, and turnover.
The societal dimension measures the organization's impact on the larger community and environment. Key performance indicators in this dimension include environmental sustainability, social responsibility, and community involvement.
One of the key benefits of the performance prism model is that it takes into account a wide range of performance measures, rather than just focusing on financial indicators. This allows organizations to better understand the drivers of their performance and make informed decisions about how to improve. Additionally, the model provides a framework for aligning the organization's strategy and objectives with its performance measures, which can help ensure that the organization is working towards its goals in a holistic and sustainable way.
In conclusion, the performance prism model is a useful tool for evaluating the performance of an organization. By considering a range of financial and non-financial indicators, the model helps organizations get a more complete picture of their performance and make informed decisions about how to improve.