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