Performance Measurement

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Performance measurement is the use of statistical evidence to determine progress toward specific defined organizational objectives. This includes both evidence of actual fact, such as measurement of pavement surface smoothness, and measurement of customer perception such as would be accomplished through a customer satisfaction survey. In a service industry such as transportation, the performance measurement process starts by defining precisely the services that the organization promises to provide, including the quality or level of service (e.g. timeliness, reliability, etc.) that is to be delivered. The performance measurement process starts by defining the services that the organization promises to provide. There are often good opportunities for collecting feedback from system users in “real time,” since the transportation service is often “consumed” at the same time it is “produced.” Performance measures provide information to managers about how well that bundle of services is being provided. Performance measures should reflect the satisfaction of the transportation service user, in addition to those concerns of the system owner or operator.

1. It improves the bottom line by reducing process cost and improving productivity and mission effectiveness.

2. A performance measurement system such as the Balanced Scorecard allows an agency to align its strategic activities to the strategic plan. It permits — often for the first time — real deployment and implementation of the strategy on a continuous basis. With it, an agency can get feedback needed to guide the planning efforts. Without it, an agency is ‘flying blind’.

3. Measurement of process efficiency provides a rational basis for selecting what business process improvements to make first.

4. It allows managers to identify best practices in an organization and expand their usage elsewhere.

5. The visibility provided by a measurement system supports better and faster budget decisions and control of processes in the organization. This means it can reduce risk.

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