Performance Measure

A Performance Measure is a quantitative measurement of an aspect of an organisation's products, processes or services.

Good performance measures should tell an organisation;

  • How well it is doing
  • If it is meeting its goals
  • If and where improvements are necessary
  • If its customers are satisfied

Most performance measures can be grouped into one of the following categories.

  • Effectiveness: A process characteristic indicating the degree to which the process output (work product) conforms to requirements. (Are we doing the right things?)
  • Efficiency: A process characteristic indicating the degree to which the process produces the required output at minimum resource cost. (Are we doing things right?)
  • Quality: The degree to which a product or service meets customer requirements and expectations.
  • Timeliness: Measures whether a unit of work was done correctly and on time. Criteria must be established to define what constitutes timeliness for a given unit of work. The criterion is usually based on customer requirements.
  • Productivity: The value added by the process divided by the value of the labor and capital consumed.
  • Safety: Measures the overall health of the organization and the working environment of its employees.

Performance measures should:

  • reflect both the needs of the organisation and of its customers.
  • be easily understandable
  • be possible to measure accurately
  • be economical to apply

Related Pages

External Links & References

  1. ORAU.Gov
  2. Wikipedia
  3. Google Search
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