Project Performance Measurement and Organizational Performance

Where does project performance measurement fit in the schema of measuring public sector performance? Project management typically concerns itself with budgets and schedules; but how does this relate to the performance of the organization? Here's how project performance measurement relates to organizational performance.

First, let's be clear we are talking about improvement projects; i.e. those intended to make an existing process or service better, faster, cheaper, or more productive. Many organization have on-going change initiatives, or product and service development activities. Sometimes this is referred to as the 'change agenda'.

The activities and outputs produced by these initiatives contribute to the same outcomes as the ‘day to day business’; therefore impacts, benefits and consequences are measured in the same way.

Project Performance Measurement

Project outcomes contribute to organizational outcomes

So this means that the impacts, benefits and consequences of your improvement project should eventually be apparent in the performance of your organization. Of course to verify this, you need a baseline to measure from.

Therefore you need to understand and establish those baseline measures before the project is launched. For example, if the goal of the project is to improve turnaround time for processing claims from clients, then that is a key baseline measure.

Another useful measure from the project perspective is the ‘rate of uptake’ i.e. how quickly are new initiatives adopted by the organization. Let's suppose your organization has embarked on a human resources improvement project, intended to improve work place satisfaction, and ultimately customer satisfaction resulting from a healthier, happier workforce.

From the project perspective you might track:

  • project tasks are completed on time

  • project is on budget

  • the new policy and practices are implemented according to plan and schedule

Tracking effectiveness (outcomes) of the project would require measures of:

  • improved employee retention and satisfaction

  • increased organizational effectiveness

  • increased customer satisfaction

To develop meaningful performance measures for these outcomes, you need to understand both the desired outcomes i.e. impacts, benefits and consequences - and the processes that will produce these outcomes.

Note that, as with organizational performance, project outcomes are measured from an external perspective (i.e. that of the customer or beneficiary of the process), while activities and outputs are measured from the perspective of the process owner.

See also:

Best Practices in Performance Measurement

Planning for Performance Measurement

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