Performance measurement is the process of collecting, analyzing and/or reporting information regarding the performance of an individual, group, organization, system or component. It can involve studying processes/strategies within organizations, or studying engineering processes/parameters/phenomena, to see whether output are in line with what was intended or should have been achieved.
Performance measurement has been defined by Neelyas “the process of quantifying the efficiency and effectiveness of past actions”, while Moullin defines it as “the process of evaluating how well organizations are managed and the value they deliver for customers and other stakeholders”. Discussion on the relative merits of these definitions appeared in several articles in the newsletter of the Performance Management Association.
Figure 1.Performance Measurement Cycle
Why we need to measure performance?
We can specify the basically why the firms measure their performance according to Keebler & Durtsche as three reasons ;
- Reduce their operating costs
- Drive their revenue growth
- Enhance their shareholder…
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