Steps to create performance management baseline are as follows:-

Step 1) Develop Scope Baseline: The first step is to determine the goal and the deliverables of a project. For the creation of the scope baseline, you will need to develop the following components:

• Scope statement.
• The work breakdown structure (WBS).
• The WBS dictionary.

When these documents have been approved by the relevant committee(s) and/or stakeholders, they comprise the scope baseline.

Step 2) Develop Schedule Baseline: Based on the scope baseline, you will need to determine the sequence of activities, taking into account their (inter)dependencies. Schedule network diagrams are a common technique for this.

Subsequently, you will need to have the durations of activities estimated (e.g. using these duration estimation techniques). Subsequently, you will need to determine the resource needs of these activities and incorporate scheduling assumptions and constraints into the planned project schedule.

The resulting schedule model is subject to approval before it becomes the schedule baseline.

Step 3) Develop Cost Baseline: Based on the resource requirements (as determined in the previous step), you will need to have the expected cost of a project and project activities estimated. The project budget is then subject to approval. The budget, broken down by periods (‘time-phased’) and allocated to control accounts or work packages, comprises the cost baseline of the project.

Step 4) Determine the Performance Measures/Indicators: In the previous steps, you have created the scope, schedule and cost baseline. Now you will have to extract the respective performance indicators related to those baselines. In most projects, they are included in the scope, schedule, and cost management plan, respectively.

The set of measures used for the PMB can refer to indicators of the earned value analysis (EVA). It can also contain other indicators that are sensible for a project to measure its work against the planned scope, schedule and budget.

Step 5) Consolidate the Three Baselines into the Performance Measurement Baseline: The PMB is not necessarily a document on its own: the term can also refer to the combination of the scope, schedule and cost baseline. A dedicated document that describes the performance measurement baseline may be sensible in some cases, e.g. to consolidate all indicators used for performance monitoring or to establish indicators beyond time and budget/value measures (e. g. qualitative aspects or a different value measure).

In any case, the project’s performance measurement needs to assess the delivered project work and consumed resources against these 3 baselines.

Step 6) Communicate, Apply and Maintain the PMB: Once the PMB is developed, it needs to be communicated to the project team and the project’s relevant stakeholders (other than those who have approved it).