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A performance metric measures an organization's behavior, activities, and performance. It assesses how well workers are doing their respective tasks and how companies are accomplishing their objectives. It provides hard data and gives off outcomes that appraise clearly defined quantities within a range that facilitates improvement and upgrading. Ideally, good performance metrics form the basis for better achieving a small business' overall goals.[1]

It should support a range of stakeholder needs from customers, shareholders to employees.[2] While traditionally, metrics are finance-based and are inwardly focusing on the performance of the organization, metrics may also focus on the performance against customer requirements and value.[3]

In project management, performance metrics are used to assess the entire well-being of a project and focus its appraisal based on seven criterions:

  • safety,
  • time,
  • cost,
  • resources,
  • scope,
  • quality, and
  • actions.[4]

In call centres, performance metrics help capture internal performance and can include productivity measurements and the quality of service provided by the customer service advisor. These metrics can include: Calls Answered, Calls Abandoned, Average Handle Time and Average Wait Time.[5]

Developing performance metrics usually follows a process of:

  1. Establishing critical processes/customer requirements
  2. Identifying specific, quantifiable outputs of work
  3. Establishing targets against which results can be scored

A criticism of performance metrics is that when the value of information is computed using mathematical methods, it shows that even performance metrics professionals choose measures that have little value. This is referred to as the "measurement inversion".[6][7] For example, metrics seem to emphasize what organizations find immediately measurable—even if those are low value—and tend to ignore high value measurements simply because they seem harder to measure (whether they are or not).

To correct for the measurement inversion other methods, like applied information economics, introduce the "value of information analysis" step in the process so that metrics focus on high-value measures. Organizations where this has been applied find that they define completely different metrics than they otherwise would have and, often, fewer metrics.[8] For projects, the effort to collect a metric has to be weighed against its value as projects are temporary endeavors performed with finite resources. [9]

There are a variety of ways in which organizations may react to results.[10] This may be to trigger specific activity relating to performance (i.e., an improvement plan) or to use the data merely for statistical information. Often closely tied in with outputs, performance metrics should usually encourage improvement, effectiveness and appropriate levels of control.

Performance metrics are often linked in with corporate strategy[11] and are often derived in order to measure performance against a critical success factor.

See alsoEdit


  1. ^ Bert Markgraf, “What Is a Good Performance Metric?” 02 August  2017. Retrieved 29 October 2018 from
  2. ^ Mark Graham Brown, Using the Right Metrics to Drive World-class Performance
  3. ^ Value based performance metrics
  4. ^ Measuring Project Health Neville Turbit, 2008
  5. ^ "The Best KPIs to Use in Your Call Centre". The Call Centre School. 2010. Retrieved 2016-12-08.
  6. ^ Douglas Hubbard, "The IT Measurement Inversion", CIO Magazine, 1999
  7. ^ Douglas Hubbard, How to Measure Anything: Finding the Value of Intangibles in Business. John Wiley & Sons, 2007
  8. ^ US Government Study on AIE Archived February 2, 2004, at the Wayback Machine
  9. ^ Determining Project Management Metrics Frank Parth, 2006
  10. ^ Andy D. Neely, Business Performance Measurement: Theory and Practice
  11. ^ Mark Graham Brown, How to Interpret the Baldrige Criteria for Performance Excellence

Further readingEdit