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The Terminology of Organizational Performance Measurement

[Excerpted from Managing with Measures: How to Use Performance Measurement to Manage for Results and Document Success by Robert I. Wise, forthcoming]

© 2009, SystemWise Consulting, LLC

Comments on the following are welcome.

Measure—everyday meanings

  • As a verb, “measure” can refer to determining the amount of something or to evaluating how good something is.
  • As a noun, “measure” can refer to the result of determining the amount of something or of evaluating how good something is.
  • “Measure” can also refer to the criterion or device used to measure something.

Measure—technical meaning

Measuring is the process of assigning a value from a scale to an attribute of an observed object or event according to an operational definition. The value assigned can be a numerical quantity representing an amount or a label representing a category, or a rating representing a judgment.

Measurement Scale

A measurement scale defines the range of possible values that can be assigned to the attribute that is observed. When measuring organizational performance, there are three types of scales that are useful—quantitative, categorical, and rating.

  • A quantitative scale is a set of ordered numbered quantities that represents different amounts of a specified unit of measure. The amount observed can be quantified by counting or with the use of a measuring device. A quantitative scale is also called an interval or ratio scale.
  • A categorical scale is a set of labels representing different groups to which an observation can be assigned. The number of observations assigned to each group can be counted. A categorical scale is also called a nominal scale.
  • A rating scale is a set of ordered labels that represent different amounts but does not have a specified unit of measure. The ratings can be either counted or averaged. A rating scale is also called an ordinal scale.

Operational Definition of a Measure

An operational definition specifies how a numerical quantity, category label, or rating is to be assigned to an observed object or event. An operational definition includes an explanation of key terms, a description of what, when, and how data are to be collected, and any arithmetic computation involved.

Quantitative and Categorical Data

By its technical definition, a measurement process can produce two types of data. It can produce quantitative data whose values can be summarized with means and standard deviations, or it can produce categorical data whose values can be summarized with proportions and percentages.

Qualitative Data

Qualitative data are data are not produced by the process of measurement as technically defined. Qualitative data are not quantities, labels, or ratings. Qualitative data are commonly in the form of words recorded from observational logs, interviews, or written responses to questions.

Objective and Subjective Data

Data are subjective if they represent human judgment or opinion. It is possible to use empirical, objective methods to collect subjective data. Thus, whether a particular set of data is objective or subjective depends on what is being measured, not how it is measured.