ABSTRACT
Many commentators have suggested that performance review has three related elements: economy, efficiency and effectiveness. In the performance review field, there is considerable ambiguity and uncertainty about definitions. The concept of effectiveness links performance review to the political objectives of the council. A succinct outline of the difference between efficiency and effectiveness is that effectiveness is ‘doing the right thing’, whilst efficiency is ‘doing the thing right’. The extended VFM framework which incorporates equity, entrepreneurship, excellence, expertise and electability by adding them to economy, efficiency and effectiveness brings the issues of performance measurement much closer to the reality of management problems. There are many different dimensions to performance and the problem which faces management is to choose the appropriate tradeoffs between each of the elements. In assessing performance, performance indicators and measures are generally used. A distinction is often made between performance measures and performance indicators.
