Activity Performance Measurement
Assessing how well activities (and Processes) are performed is fundamental to management's efforts to improve profitability. Activity performance measures exist in both financial and non-financial forms. These measures are designed to assess how well and activity was performed and the results achieved. They are also designed to reveal if constant improvement is being realized. measures of activity performance center on three major dimensions: (1) efficiency, (2) quality, and (3) time.
Efficiency focuses on the relationship of activity inputs to activity outputs. for example, one way to improve activity efficiency is to produce the same activity out-right the first time it is performed. If the activity output is defective, then the activity may need to be repeated, causing unnecessary coat and reduction in efficiency. The resource consumption and less ability to respond o customer demands. Time measures of performance tend to be non-financial, whereas efficiency and quality measures are both financial and non-financial.