Hello Luís, 

In a certain way and in some scenarios these expressions may be used as synonymous. Actually in the recent times, and relating this issue with the evolution of models like Balanced Scorecard, Skandia Navigator, and other models, we can assume that a Performance mesurement system is a set of indicators that have to had some kind of relationship beetween them; on the other way, we can have a set of indicators that does´t have that kind or relationship beetween them, but still, can be of some use in the organisations.

Best regards.

Hello Luis,

Indicators are auxiliary variables. Another way to distinguish between indicator system and PMS is the reference object of the evaluation. Indicators don't necessarily assess the performance capability of a "system". You can use indicators e.g. to measure or assess a human beings attitude, the change capability of an production system, or the degree of connectedness a social network participant.

Best regards.

Regarding indicator and performance monitoring systems, I defer to this popular maxim, "The whole is greater than the sum of its parts."  What I mean is, the two systems are inextricably intertwined for some larger purpose, which may help decision-makers.  

Indicator system can be a subset of performance measurement system, which includes indicators, and historical performance such as capabilities, and performance management based on measures and indicators. Indicators are leading measures of process performance.

Interesting question that we have been discussing for a while (in our research seminar at the University of Lincoln). Indicators are measurement systems. As such they are particular constructions that link a set of observations with a set of numbers (e.g. people and their height in centimetres). The reason for doing so is to find a link that connects observations with particular number in a unique way (e.g. height of people is relation to their diet (environmental impact) or the height of parents (genetic heritage).

Performance Management Systems can be seen as particular type of indicator, where the link concerns different intensities or contributions to performance from a collective perspective. In this case one set, people inside the organization/system, and the other set, usually KPIs, are linked through an expectation: higher contributors are those with higher/lower marks on the KPIs.

You may notice easily that linking (i.e. measuring) people with height seems easier than people and their contributions to collective performance. This is not the case, both are at the same level of abstraction. The main difference is the quality of the numeric scale. Precision is related to an additive property, the possibility of cutting the scale to provide more granularity; for instance, if people seems to measure the same in centimetres we may always check if there are differences in millimetres, and so on. This is not possible when dealing with expectations, emotions, aims or preferences. This is the challenge when measuring performance.

Obviously there are others ways to solve this. We may discuss it if you are interested.

Dear Luis F. Cândido

Greetings,

Yes , I agree what Praveen Gupta ·said,

Best Regards

Interesting discussion. I'd like to add two things:

1. There is a difference between an indicator and a measure. An indicator indicates something and a measure measures something. The dimensions (m) of a car are measures and that the car can carry six people is an indicator. Quite often that distinction is not made.

2. Measurement is not management. In the reactions above I read both performance measurement and performance management. You can't manage without measurement, but measurement alone is not (yet) management.

Rob, in fact, without this dissociation the question doesn't make sense. Thus, you're right!

I think that we need explore this question in depth, if we desire implement a suitable performance measurement system (PMS). A PMS in terms of "process of management". We need develop a holistic view of measurement process and emphasizing differences between indicator systems and performance measurement systems.

Best regard!

I believe that the performance measurement system strives every time to very specific data, a specific way of measuring aspects whether social, economic, or otherwise. At the same time, this represents an entire system performance, some elements may be interconnected.

Furthermore, the system of indicators is a more general system.

Best regards

I like Rob's clarification. We should indeed identify the differences between indicating and measuring. Both are different mental processes. The former (indicating) involves drawing a boundary between a particular set observations of our interest and the rest of possible observations that we could collect. This can be seen as drawing a distinction between what is at the focus and what is not. The latter (measuring) concerns selecting a particular set of observations, but also link these with a set of numbers by means of some specific rules.

Now, managerial implications between indicating and measuring are more blurry. It an claimed that an indication has some quality when there are some evidences to support it. To provide these evidences one usually measures something, what can be seen as 'fact' or 'conventions'.

In this sense, Luis, 'indicating' is an conceptual exercise that breaks the continuum of a holistic view. It doesn't consider everything; just the everything that would be relevant to the aim/goal/expectation. We need to be more precise, no doubt.

You might be interested in the following paper:

The performance-based funding scheme of higher education institutions, International Journal of Learning and Teaching, 2015, 1(2), 104-109. http://www.ijlt.org/uploadfile/2015/1123/20151123114448746.pdf

Interesting paper on the challenges of measuring social benefit.

First challenge concerns different understandings of performance improvement. Is the increase of papers published indication of improvement? Is this related to the quality of the contribution to academic debate or just an exercise of ticking boxes? Who decided what is best for society? Was it a top-down authoritative approach? Arrow's impossibility theorem is a good example about how difficult is to find a social welfare function through a democratic process. Can this be done? I would argue yes; it requires a different approach than measuring though.

Second challenge. As commented before in this thread, measuring involves linking observations with numbers by means of particular rules. For instance, we may measure people's height and associate it to a scale in centimetres. We will notice that some are taller than others. We can also the same people to other sets of observations like that involve numbers or not. For instance we may associate them to other numbers to represent weight or daily caloric ingest. We can even combine different scales and deduce some links between them. For instance, relations between weight and height. This has limitations, for instance if two people have the same measure in centimeters, we can add granularity and check their height and millimeters; if it continues being the same, we could repeat this adding procedure until we could may unique links between particular observations and numbers in the scale. The problem is that we cannot add granularity to preferences and emotions. How angry can one be about a particular situation? Can "angriness" be broken into infinite states? In this sense, it is clear that there is a difficulty to establish links between different elements of the balance scorecard.

Finally, another challenge relates to sum-zero. This is even more obscure and scary. As we provide more resources to one best-performance actor, the poor-performance actor becomes worst. In the case of education this makes the situation at least unfair if not unethical, If I have the bad luck of living in an area where the educational institution is bad, I'm guaranteed of having a bad input.

These challenges suggest the need for different approaches to deal with this kind of social issues.