Selecting Indicators

There are three basic types of indicators-- those based on outcomes, on processes, and on structures (Scott p. 353).

Outcomes
Outcomes focus on materials or objects on which the organization has performed some operation (Scott p. 353). These are the most common effectiveness measurements, but can be the most difficult to define and measure and are not immune to ambiguity and measurement error. Outcomes in some organizations are also a function of competition and technology levels, which makes it difficult to separate the effectiveness of the organization from other environmental variables. One approach to help remedy this is to focus on comparisons with similar organizations, though one must acknowledge that the organizations may have differing access to environmental resources. It can also be hard to track outcomes of the products once they are released into the environment (e.g., students, patients).

Processes
Process measures assess effort rather than effect (Scott p. 355). Some measure work quantity or quality. Though they are in some respects a more pure measurement of organizational performance, they are an assessment of conformity of a given objective that can be decoupled from output performance (and ultimately survival itself).

Substituting process evaluation for outcome evaluation can also force the customer to accept service instead of value. A student confuse teaching with learning, a diploma with competence, etc. (see Illich 1972 for a discussion). However note that in some institutions (churches, legal firms, etc.) conformity to a process is the primary output and can be the most appropriate measurement.

Structures
"Structural indicators assess the capacity of the organization for effective performance" (Scott p. 357). These are often include organizational features (equipment age or type) or participant characteristics (degree attained, liscensing, etc.). Structural indicators form the basis for accreditation reviews and licensing systems.

"Structural indicators focus on organizational inputs as surrogate measures for outputs." (Scott p. 357). Yuchtman and Seashore (1967) suggest that "bargaining position" and ability to acquire scare resources is an important criteria of effectiveness.

Like with process, focus on structure can have it's own problems. For example, licensing and accreditation through structural evaluation have become a major obstacle to innovation in schools.