KEY PERFORMANCE INDICATORS (KPI)

Key Performance Indicators (KPI)

Key Performance Indicators (KPI)

Recently, there has been an increasing interest in developing indicators of institutional performance. There exist two major methods of assessing performance quality. The first one refers to the public's confidence in institutions, that is, to citizens' beliefs that institutions' agents are fair, are competent, and bring about desirable outcomes (Mayne, 2007). This approach assumes that the general public recognises whether institutions perform well or not and reacts to this. Therefore, this approach uses public opinion surveys, especially survey questions about respondents' confidence in various types of public institutions (such as parliament, police, government, the legal system). Public opinion- based indicators are relatively sensitive to short-term changes and isolated events, such as political scandals, and they tend to reflect evaluations of the current government policies and satisfaction with public services available to an average citizen. Therefore, they are particularly adequate to explore the institutions' degree of responsiveness (Kusek, 2007).

The second approach uses expert surveys and conventional statistical measures (such as levels of spending, unemployment rates) to create objective indicators of performance. The paradigmatic example is World Bank Governance Indicators project, which looks at (among other issues) government effectiveness defined as the quality of public-service provision, quality of bureaucracy, competence, and independence of civil service and government's commitment to policies, and at regulatory quality, which is defined as the lack of excessive regulation and the low incidence of market-unfriendly policies. Objective indicators capture relatively stable institutional characteristics and are less sensitive to short-term changes. Both types of measures—public opinion and objective indicators—can be used to analyse trends over time in performance or to make comparisons between different institutions within the same country or equivalent institutions across countries (Mayne, 2007). A simultaneous decline in the quality of several institutions is likely to be an indicator of a system-related political crisis.

Managers must assure that measures of team performance appropriately reflect each team's relevant contributions. This means linking team performance measures to corresponding department- and organisation-level indicators. For example, a hospital's performance scorecard might include quality-of-care indicators. For departments and teams that deal directly with patients, measures of performance might incorporate a standard method of tracking patient satisfaction used throughout the organisation. (Managers would have some difficulty, of course, in combining the results of measures that differed from one unit to another; for instance, if one unit used a five-point satisfaction rating and another used a yes/no ...