performance indicators (and performance targets)a set of criteria used to measure, compare and assess the performance of an organization or project in order to establish its degree of success. Most performance indicator systems are based on one or more of four types of indicators:
- cost indicators – focusing on financial performance, such as profit and loss for a given period;
- take-up and volume indicators, e.g. occupancy rates – these record the extent to which a service or programme, or aspects of provision are used, often being compared against maximum possible use or use in comparable contexts;
- impact, or result indicators – measure the effect of a service by collecting information regarding the benefits produced; and
- user reactions – gauge the degree of satisfaction experienced by recipients and consumers, through, for example, questionnaires, or by monitoring the number of complaints received.
The measurement of performance against explicit performance targets is a further feature of much contemporary use of performance indicators. (see also LEAGUE TABLES.)
Performance indicators and performance targets are a central feature of the forms of NEW PUBLIC MANAGEMENT introduced by governments. Although there is resistance -with claims that such systems can distort provision – these systems also have potential advantages in empowering clients and customers and can be attractive to managers of provision and services because they appear to offer clear and precise measurements thus simplifying complex situations. Criticisms remain, however. First, there is the issue of how best to identify appropriate targets and achievable goals. The aims and objectives of management may diverge from those of practitioners and users. Second, there is a danger that those who being assessed may be compelled to concentrate on targets, at the expense of other aspects of activity (which may be less amenable to measurement by indicators), thus leading to a general decline in standards. Finally, there is a lack of flexibility with regard to assessing a programme, for example, no account can be taken of unplanned outcomes; thus performance indicators are rarely a true reflection of work carried out. See also AUDIT, AUDIT SOCIETY, VALUATION, FORMATIVE EVALUATION, SUMMATIVE EVALUATION AND SOCIAL AUDIT