Performance Measurement in NFP

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Performance Measure

Performance is judged in terms of inputs and outputs and hence the value for money criteria of economy, efficiency and effectiveness.

  • Effectiveness is the relationship between an organisation’s outputs and its objectives. 

    It ensures that the outputs of a service or programme succeed in achieving objectives.

  • Efficiency is the relationship between inputs and outputs. 

    It is concerned with maximizing output for a given input.

  • Economy is attaining the appropriate quantity and quality of inputs at lowest cost. 

    Therefore, economy is concerned with the cost of inputs.

Public sector organisations are now under considerable pressure to prove that they operate economically, efficiently and effectively, and are encouraged from many sources to draw up action plans to achieve value for money as part of the continuing process of good management.

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