Performance Measurement

Performance measurement encompasses the role of performance indicators, measures, and targets within a performance management system and is designed to improve organizational functioning. Indicators, or key performance indicators, identify key areas of strategic and operational performance in organizations. Measures seek to give a numerical evaluation of their achievement, while targets are designed as aspirational statements of intended future performance. The purpose of performance measurement is to improve organizational performance by focusing on the key functions or activities that are designed to achieve organizational objectives, and motivate and influence behavior through the setting of targets. Performance measurement is central to strategic management approaches, which utilize core mission statements, strategic objectives, and a focus on outputs to drive organizational performance.