Lagging indicators measure the outcome of undesirable events that have already happened, such as work-related accidents.
In terms of the
lagging indicators, Munn note that ANGE saw just seven accidents that qualified as LTIs in 2016, across 50 million manhours of operations.
For years organizations gave out awards based on "
lagging indicators," which means companies would evaluate their success in health and safety based on the number of injuries or deaths.
Conyers explains, "You can't wait until the end of the year to get
lagging indicators. You need these monthly or quarterly so you can make changes or mid-course corrections." Every principal in the district could immediately count the number of 'bubble kids' in his building, allowing teachers to intervene before the gap grows.
Lagging indicators will not insure future performance.
They're also concerned with assessing future performance by using "leading indicators" and past performance (
lagging indicators).
Managing the financials will not necessarily produce better financial results, because financials only tell you where you have been--they are
lagging indicators. To improve performance, we need to know both our history (how we are doing) and our direction (where we are going.)
The index of
lagging indicators, which gauges economic performance in the recent past, was revised downward to 14.3% from a preliminary 16.7%.
Enter the Balanced Scorecard, a management philosophy that anticipates scenarios like the one above by using key leading and
lagging indicators to measure a company's performance.
This study of cyclical indicators found: (1) the composite indexes contain more reliable turning point information than most of the individual indicators; (2) the Commerce Department's composite index would benefit by some component substitutions; (3) the ratio of the coincident to
lagging indicators is more reliable in calling business cycle turning points than the composite of leading indicators, but that ratio has a poor track record in calling growth cycles; and (4) most of the individual components of the composite index of leading indicators signal growth cycle turning points better than business cycles turning points.
(1)Besides those for industrial production, diffusion indexes are calculated, for example, by the Bureau of Labor Statistics for payroll employment and by the Bureau of Economic Analysis for the indexes of leading, coincident, and
lagging indicators. The diffusion indexes of payroll employment are described in Patricia M.
Composite Indexes of Leading, Coincident, and
Lagging Indicators
