One ofthe biggest challenges for performance measurement is integration of differentaspects of organisational performance, which are very different by theirnature, are measured by completely different, not comparable indicators.Organisational and individual-level performance indicators, although naturallyand organically linked, but, nevertheless, are measured in differentdimensions, could serve as an example. Performancemeasurement, in one or another form, is spread across various managementdisciplines: Strategic management, Quality management, Process improvement, andPerformance appraisal as a part of Human resources management. Organisationallevel indicators prevail in Strategic management systems, both organisationallevel and individual level performance indicators can be found in Qualitymanagement and Process improvement systems, and individual level performanceindicators are dominant in Human resource management. The link between theindicators of these two levels is of particular importance, if they are notproperly connected, employees’ motivation and compensation for work becomesquite formal and does not match overall goals of organisation. The difference of the performance measurementin the public and private sectors is determined not only by the differentnature of these sectors, but also by different historical traditions. Becauseof the complexity of the public sector mission, private sector organisations’performance evaluation can be regarded as an isolated case of performance evaluationin public sector organisation”. Performance indicators shouldbe clearly distinguished from the factors determining the level of performance,which are no less important, however, are often confused with each other.
The firstare used to monitor performance, the latter – to improve it. Individual levelperformance indicators could be more useful in searching the factorsdetermining performance. Historically,performance measurement systems used in different management areas are quitedifferent and very rarely integrated with each other. This is especially truefor a very weak relation between the measurement used in quality management andprocess improvement on the one hand, and the organisations performanceevaluation and employee performance appraisal on the other. The difference ofthe performance measurement in the public and private sectors is determined notonly by the different nature of these sectors, but also by different historicaltraditions Performance indicators should be clearly distinguished from thefactors determining the level of performance, which are no less important,however, are often confused with each other.
The first are used to monitor performance, the latter – toimprove it. Individual level performance indicators could be more useful insearching the factors determining performance. Each organisation, regardless ofits size, type of product or service, belonging to the public or privatesector, strives to be effective. For this purpose,various performance monitoring system are being developed, starting with thetraditional financial management systems and ending with complex strategicmanagement systems, which provide ability to monitor so important to thesuccess of the organisation aspects as the stakeholders’ satisfaction, thequality of the internal processes, the ability to change and improve, and someothers.
We would not be able to answer the basic questions, such as where weare at the moment respectively to our objectives, how do we look in comparisonwith its competitors, what are our development opportunities, as well as whatand how we have to change first, without such multi-faceted monitoring. Terms and concepts of performance dimensions(Summermatter, Siegel, 2009)Dimension Subsumedterms and concepts.”InputCosts, budgets, expenses, revenue, expenditure, economy, resources Throughput(activities) Process, production process, organisational processes, activitiescapacities, operations, volume of work, workload, levels of activity or ofproficiency, operating characteristics Output Results end of the productionprocess; quantity and quality of outputs, services Outcome Effects, results,impacts, benefits, public value, accomplishments, consequence, EfficiencyRelation of efforts to outputs, the ratio of output to input, technicalefficiency, cost per unit of output, relative efficiency Effectiveness How wellservices or programs meet their objectives, a measure of outcome, illustratingthe result or impact of a service, the extent to which customer requirementsare met, cost-outcome measures Additional types of ratios Productivity, valuefor money, cost effectiveness, return on investment, return on taxpayer money, unit or per capitacosts Quality of staff activity, services or outputs, extent to which thenature of the output and its delivery meet requirements or are suitable totheir purpose, conformance, reliability, on-time delivery. Requirements (needs)Targets, goals, objectives, standards, timeliness, pledges, benchmarksStakeholder related aspect, Consumer’s evaluation of various features or facetsof the product or service, based on a recent consumption experience,satisfaction, trust of actors and stakeholders, customer satisfaction Value andethical aspects Equity, transparency, or other democratic values, equity,equitable distribution of benefits, fairness” “Although organisationsboth in private and public sectors have a lot in common, but there are some”genetic” differences. Profit maximization objective absolutely natural for theprivate section organisations is not typical for the public sector organisations,and the criteria for which to measure their activities are not sufficientlyclear and defined”