At the strategic level, we use a three-stage top down approach, which takes into account the conflicting interests of different groups of stakeholder.

• Key performance areas covering the whole spectrum of stakeholder requirements are defined.
  
• Elements to measure in each of the key performance areas are identified.
  
• One or more performance indicators for each element to measure are considered.

The following diagram summarises the approach.

The performance measurement system should be:

Complete - The set of performance indicators should measure whether all stakeholder requirements are being met. Each indicator should be operationally and economically feasible to measure.

Consistent - All major actions that can be taken by an organisation should affect an indicator and hence be subject to measurement.

Effective - Each indicator should be a measure of current performance that is amenable to management action to change its value in the future. The set of indicators should encourage the necessary behaviour to bring about significant and continuous improvement for all stakeholders.

Transparent - Whenever possible, indicators should be developed to allow comparisons to be made and benchmarking to be undertaken.

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