Paul Simons (2000) writes about performance management and the roles of information. He lists five uses of information.
- Decision making
- Control
- Signaling
- Education and learning
- External communication
If we look at the five uses in turn. Information for decision making is about improving decision processes. It refers to giving managers the information they need to plan and coordinate business objectives. Information as control refers e.g. to the use of information in giving out bonusses. Here informations serves the objective of aligning organisation and individual goals, which is inherently difficult.
In terms of signaling, it is all about the classic phrases; "what gets measured, gets done" or "everyone watches what the boss watches". Information is a powerful tool in making the organisation aware of what is important. However, it comes with the risk of neglecting what does not get measured. It is important for this reason that intelligence activities are constantly reviewed.
Education and learning are about the things that we usually associate with creating insights. Information also serves the role of making employees and managers aware of changes in their environment. Thus, making them able to adapt and change. The last of the five uses is information for External communication. This deals with information's role in communicating with stakeholders. Not only shareholders and others with a direct monetary interest but also customers and potential interest groups.
Looking at all these uses it is no surprise that we can experience conflicts as soon as we start to measure something. But if you keep in mind the five uses and consider what your data is supposed to do, then you can preempt some of the conflict.
