Performance measurement in not-for-profit and public-sector organisations

Abstract

Measuring performance is increasingly important in not-for-profit and public sector organisations from those as large as the US federal government to the smallest volunteer group. Human resource metrics are the most relevant – spanning function, operations and strategy. Function measures include employee efficiency and effectiveness (turnover, sick leave, insurance and recruitment costs, for example). Operational measures include specifics like revenue per employee, as well as broad measures of effectiveness that link management to performance and returns on investment. Future-oriented strategic measures match capability against anticipated need, and are increasingly a key part of core planning activities. Barriers to effective measurement include fear (of retribution, variation and loss of control). Data may be gathered using top-down or bottom-up approaches. Issues to be considered when implementing a metrics methodology include linking outputs to outcomes, data quality, leading vs lagging indicators, indicator maturity, and imperfection. © 2001, MCB UP Limited