Performance indicators (PIs) are used in relation to concepts for which a direct measure is not always observable when monitoring development towards a desired goal. For this reason, they are devised as combined relevant quantifiable values that can be followed in time to give a partial metric of a given action. PIs may be used to report effectiveness by measuring profitability within the commercial sector, for example. In contrast, arts and cultural organisations, as well as other non-profit sectors, have a specific legal and financial structure to support the organisational goals related to delivering intangible services (such as a cultural experience, education, health, or sustainability) and to advance societal values (Forbes, 1998). In addition, services provided may have public good characteristics, may be a natural monopoly, may suffer from socially inefficient levels of consumption (or production) due to information asymmetries, and may receive public subsidy or be publicly provided, requiring a different approach than a simple investor-management accountability system. As a result, PIs to measure effectiveness are not easy to define, and if developed, may not indicate whether the organisation is operating on its production frontier, that is, efficiently (Peacock, 2003).
|Organisation||Erasmus School of History, Culture and Communication (ESHCC)|
Navarrete, T. (2020). Performance Indicators. In Handbook of Cultural Economics, Third Edition (pp. 408–414). doi:10.4337/9781788975803.00051