In the purest sense, metrics, measurements, charts, and graphs are known as performance indicators. Performance indicators should provide the status and report the results of past progress to show the current state of affairs and anticipate future outcomes for a specific and focused area.

A performance indicator can be viewed as a measurement gauge for a particular item of interest, such as a pressure gauge to measure tire pressure, a thermostat to measure room temperature, a sphygmomanometer to measure blood pressure, and a thermometer to measure body temperature. For companies, performance indicators are a measurement tool that reports on the performance of cost, schedule, quality, stability, defects, risks, and more.

To make your performance indicators effective, useful, and meaningful, they need to include the following seven elements: Name or Title, Horizontal and Vertical Chart Axis, Measurement Tabular Data, Legend, Performance Index Equation Definition, Analysis and Action Plan, and Color Reporting Status with Legend.

Example Performance Indicator Report

Name or Title – Item A

The Performance Indicator must have a name or title that is descriptive of the item that is being measured. For example, Requirements Stability would be a performance indicator that measures the steadiness of the requirements as they are solidified.

Horizontal and Vertical Chart Axis – Items B

The x (horizontal) and y (vertical) axis must be clearly labeled. Their title names complement and support the indicator’s measurement performance with appropriate scales and units of measurement.

The horizontal axis will always be a time series on the monthly basis. This is because performance measurements are collected and reported on a monthly basis. More precisely, the horizontal axis should have twelve months of information with nine months of past performance and three months looking forward for trending or predictive modeling forecast.

The vertical axis will have one (left side of chart) or two vertical label titles (left and right sides of the chart). All indicators must have and display the Metric Index (MI) which is displayed on the left-hand side of the graph. If additional content is needed for display, these elements use the right-hand side of the chart and will appear for all double label graphs.

Thresholds, which are explained in detail in my Measurements Reporting: Indicator’s Color Rating Codes Explained article, are associated to the left-hand vertical axis and accompany color rating performance standards for the Metric Index. They are displayed on the chart as dash color lines (blue, green, yellow, and red if applicable) and not continuous as is the Metric Index line.

Measurement Tabular Data – Item C

The measurement table contains the numeric values that are displayed on the graphical chart. There are two main purposes to display these values. First, to show the value of the indicators instead of trying to interpret them from the chart, especially for those with large ranges like organizational staffing levels which could be 250, 400, and 1,000 people. Second, to allow those that process numeric information easier than pictorial display as in a chart.

Legend – Item D

The legend contains the element names of the performance indicator. Each element has a color box that matches to the same color item on the chart as well as the element’s numeric values in the measurement tabular data.

Performance Index Equation Definition – Item E

The performance index equation definition is usually missing from all performance indicators and is probably the most significant attribute which is needed. The equation explicitly describes what factors and considerations are being applied to explain how the indicator’s performance is being evaluated and rated.

Analysis and Action Plan – Item F

The analysis and action plan is traditionally spoken by the presenter when the performance indicator is reviewed and not included. Instead, addressing and answering these five key areas permit the indicator to be self-explanatory and promotes corrective initiatives and proactive responses to occur sooner than later so that expected operational performance is achieved faster.

Color Reporting Status with Legend – Items G

The Color Reporting Status provides the performance of the measurement indicator. Colors can be Blue, Green, Yellow, Red or White. The details of this is explained in my Measurements Reporting: Indicator’s Color Rating Codes Explained article.

The displayed color is visually reinforced in conjunction with the thresholds dashed lines and the Indicator’s Index. In the illustration above, the current month’s performance (i.e., yellow) is shown in the upper right and above the 9/17 reporting month with eight past performing months (i.e., green). The three white status ratings implies no performance since it is future and not known. As stated earlier, the dash line is a futuristic trend line which is predictive of the past performance.