1. Performance Measures in
Project Management
ME751 Chapter 6

2. • When do we say that the performance of any
project is good or not ?
The performance of a project is good when it
is completed based on time constraints,
specified budget and project specifications.
Otherwise the project ends up with failure.

3. • Some of the reasons for the poor performance
of a project are:
If it is abandoned at half the way.
If it is not producing a specified quality of a
product.
If it becomes sick soon after going in to the
commercial production.

4. Performance Indicators
• The investor, project manager and also the
public must be given with some indications
about the management while the project is
still in progress.

5. • Some of the performance indicators are:
Time over-run
Cost over-run
Project sickness
Productivity
Value

6. 1) TIME OVER-RUN:
 This basically means not sticking to a pre-planned time schedule of the
project. In order to get the job cleared through the approving authorities,
a schedule may be fixed which can be far away from realistic.
 The vendors and contractors may just add to the confusion by promising
deliveries which can make anything possible on paper.
 Besides, some subsequent modifications or changes have to be made to
suit the project requirements which in turn increases time and cost.
2)COST OVER-RUN:
 Anything done to a project including time over-run would be reflected in
the cost.
 Cost estimates in a project are to be revised at various stages to improve
their accuracy.
 Cost over-run is used to represent the variance between the original cost
and the final cost incurred.

7. 3)PROJECT SICKNESS:
 An efficient project manager is the one who makes the best possible use
of resources for achieving the project objectives.
 What ever the project manager does w.r.t the resources will be reflected
in the cost and what the project manager provides in return to justify this
cost is a plan which is to be called successful and must provide a saleable
output.
 The ratio of this output to the cost incurred for putting up the plan could
be an indicator of a project management performance.
4)PRODUCTIVITY:
 A productivity indicator reflects how the resources have been utilized
either for production of goods and services or for creation of facilities for
the same.
 Productivity is mainly measured to ensure the profitability of the plant and
to ward of the sickness.

8. 5)VALUE:
 Value in this context, indicates the quality of the
products or services that are the final outcome of a
project.
 If the product or services do not meet customers
requirement, then the ideas such as time over-run,
cost over-run, high productivity, all become redundant.
 PROGRESS CONTROL:
 It requires a continuous monitoring during the
production phase.
 There must be a right contractual stipulations
regarding warranties and guarantees.

9. • What are Guarantees and Warranties?
Guarantee is a promise given to the purchaser
that a particular product would work
satisfactorily for a given period of time.
Warranty is a written guarantee given to a
purchaser by a dealer that they would repair
or replace the defective products with out any
charge for a stated period of time.

10. PERFORMANCE PARAMETERS:
These are the parameters which are required to
be identified in a project.
• Some of the critical performance parameters are;
 Raw materials
 Power consumption per unit of production
 Outcome etc….
How ever the design and specifications must be
made to meet these performance requirements.
Thus the critical performance parameters must
be tracked through all the stages of project
execution till the final performance guarantee
confirms the achievement of the performance.