E XPERIENCED MANAGERS KNOW THAT measuring an event draws attention to that event, and that tying rewards to the measurement process will both magnify the event and sharpen attention. They also know that an exclusive focus on traditional performance measures, such as return on equity and cash flow, ignores other key success factors in an enterprise, including customer satisfaction, R & D, and human resource management. When this happens, performance management becomes finance-driven and myopic, resulting in some organizational factors-less important ones, we would argue-being optimized at the expense of others. Furthermore, when rewards are tied to financial targets the organization often alienates employees who have little understanding of how their everyday transactions connect to overall corporate performance objectives which, consequently, produces little perceived ability to affect the ‘bottom line’. Recognition of these problems, and in particular the third, has led to a flurry of writing on the need to move toward a new paradigm of performance management. The call is to supplement the traditional and small set of financial performance measures with non-financial indicators of the processes that lie behind them.’ Authors such as Kaplan and Norton have even argued for placing non-financial measures (i.e. customer satisfaction, innovation and the development of human resources) on an equal footing with financial criteria when determining strategy, promotions and the allocation of organizational resources.2 The European Foundation for Quality Management (EFQM), formed by 14 leading Western European companies in 1988, agrees on this matter. In 1991 EFQM established the European Quality Award which This article focuses on performance measures in the field af human resource managembnt @I RM). It is shown that most efforts to assess HR performance have been restricted to 1. general measures of limited value, such as headcount or payroll costs, or 2, sophisticated measures that many managers are unwilling to use+ As a result, adjustments in human resource policies and practices tend to be based on intuition rather than methodical assessment of concrete and specifiable effects. Alternative HRM performance management mefhods are discussed, including the now popular benchmarking approach, and prescriptions are offered for progressive organizational practice in this domain.