Why Measure Performance? Different Purposes Require Different Measures

TLDR

Performance measurement is not an end in itself but can aid managers in achieving eight specific managerial purposes, yet without a tentative theory of how measures foster improvement, managers cannot decide what to measure. The study argues that public managers should focus on the specific managerial purposes they wish to support and how to deploy performance measures, rather than seeking a single universal metric. The authors propose using performance measures to evaluate, control, budget, motivate, promote, celebrate, learn, and improve as part of a broader management strategy. The authors find that no single performance measure fits all eight purposes, so managers should avoid searching for a universal metric.

Abstract

Performance measurement is not an end in itself. So why should public managers measure performance? Because they may find such measures helpful in achieving eight specific managerial purposes. As part of their overall management strategy, public managers can use performance measures to evaluate, control, budget, motivate, promote, celebrate, learn, and improve. Unfortunately, no single performance measure is appropriate for all eight purposes. Consequently, public managers should not seek the one magic performance measure. Instead, they need to think seriously about the managerial purposes to which performance measurement might contribute and how they might deploy these measures. Only then can they select measures with the characteristics necessary to help achieve each purpose. Without at least a tentative theory about how performance measures can be employed to foster improvement (which is the core purpose behind the other seven), public managers will be unable to decide what should be measured.