Performance measurement is the process of collecting, analyzing, and reporting information regarding the performance of an individual, group, organization, system, or component. Started in the 1950s, this approach gained popularity with the Outcomes by Objectives and Performance Management movements. An early leader was William Edwards Deming, who developed an iterative four-step management method in the 1950’s called “plan-do-check-act” (PDCA), also known as PDSA (plan-do-study-act), for performance management and continuous improvement of organizational processes and products. In 1987, the U.S. government introduced the concept of Total Quality Management and created the Malcolm Baldrige National Quality Award to promote quality achievements and publicize successful quality strategies. The original award criteria assessed financial, customer quality, internal process, and employee metrics.
In 1992, David Norton and Robert Kaplan published the Balanced Scorecard in an article for the Harvard Business Review. The Scorecard aligned financial customer, business process, and learning and growth (staff development) measures with a common corporate vision and strategy (Kaplan 2010). In 1993, the Government Performance and Results Act (GPRA) was enacted, which required federal agencies to develop and deploy a strategic plan, set performance targets, and measure their performance over time. More recently, the GPRA Modernization Act of 2010 (Public Law 111-352) was enacted with the goal of better integrating agency strategic plans, performance, and programs with more frequent reporting. These activities are meant to drive program improvement and are using performance data for more informed decision making.
Since the 1990s, more organizations have developed outcomes-based performance measurement and budgeting systems that use accountability-based evaluation methods to monitor program results and assess whether and to what extent program resources are managed well and attain intended results. Created to meet government- and funder reporting requirements, these evaluations track program process and outcome measures through management information systems.