Blackwell Encyclopedia of Sociology Online

Extract

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. Performance measurement systems are designed to focus all levels of an organization on performance, as reflected in measures and targets. The aim is to integrate the top level of strategic planning with the operational priorities of individual departments and the personal performance of individual employees. A strategic performance management system ensures that achievement at all levels is evaluated against targets, and action is taken in the event of failure to achieve objectives. Performance ... log in or subscribe to read full text