Productivity has come to mean many things

For academicians with an analytical orientation, the term is usually equated with the input/output ratio or what is commonly termed efficiency. Administrators with an action orientation usually equate the meaning of the concept with the over-all performance of the system.

Because the word productivity is used in so many ways it is unlikely that problems in communication will disappear. Several suggestions, however, merit consideration.

First, it may be useful to replace the term productivity with several other terms that are more precise. When we are concerned with the input/output ratio we should use the term efficiency. When we are concerned with goal attainment--meaning quality of outputs, client satisfaction, etc.--we should use the term effectiveness.

When we are concerned with the over-all competence of the system, as reflected by the above dimensions of performance, we might use a new term such as organizational vitality. When we are concerned with action, or the process of improving organizational performance or vitality, then we would do well to consider the specific dimensions we are concerned about. These would include effectiveness, coordination, motivation, stability, savings, and resource acquisition.

The competitive edge of modern-day business emerges from creation or discovery of a performance management. A system that increases efficiency, decreases cost or enhances quality confers immediate competitive advantage on its creator and sets a standard for the rest of the industry to follow. But once disseminated across the field of competition, it becomes the standard. Now a new, yet more innovative, high performance system must be discovered that once more creates competitive advantage for its inventors.

As public-sector productivity gets increasing national attention, state and local governments seek more ways of improving their performance. Performance measurement systems may be helpful tools for improving both productivity and accountability. This paper identifies issues that governments should consider before implementing a performance measurement system.