non-for-profit sector

Public companies such as hospitals and charities assess their performance in the standard profit measures because they cannot be assessed by economic means. But we evaluate performance for the not-for-profit organizations using the best service at the best cost.

Public sector organizations (or Non-profit organizations) are expected to provide value service for money provided. This can be defined as providing a service in a way which is economical, efficient and effective which is assessed by 3E’s.

1) Economy (resources input measure)
If a company obtains the appropriate quantity & quality of the resources that are going to be input into the company at the lowest economic cost (ie. money spent).

For example, cutting departmental expenditure by 5%

2) Efficiency (resources input and output)
It measures the relation between resources inputs as compared to outputs considering maximum output is being achieved for the resources used.

For example, Increasing the number of chargeable hours handled by advisers to 6·2 per day / Occupancy rate of buses / Utilisation rate for drivers.

3) Effectiveness (resources output measure)
It measures the output as compared to desired objectives being achieved.

For example, the percentage of patients returning within a specified period with the same condition / obtaining a score of 4·7 or above on customer satisfaction surveys.

Is it all CORRECT? You said in the lecture that the survey itself is not a performance measure could you please explain why is that so?