Performance Measurements

Performance Measurements

MGT/437 Lean Enterprise

November 3, 2014

Performance measurements

Projects are defined and characterized by performance measurements. The progress of goals achieved are managed and tracked by performance measurements. The success and failure of the project and understanding how decisions were made aides the organization in making the necessary improvements for the future. The project manager measures performance using the triple constraints of time, budget and quality. The type of project determines what performance measurement the project manager will choose. Earned Value and Planned Value and Actual Cost are compared and contrasted as follows.

Earned Value

Earned value is used to measure the work in the project using the schedule and budget. According to Kerzner (2006) earned values are used to determine whether costs are incurred faster or slower than planned. Budget and scheduling concern are identified through earned value measures. Project managers get an overview of what work is completed versus what is to be completed at any point during the project. This measurement gives the project manager the ability to make the necessary adjustments to tasks, the budget or scheduling so as to keep the project on track. The earned value provides a tool for measuring performance and giving insight to the outcomes of the projects future.

Planned Value

Planned value is the dollar value of the planned work that is to be completed for a specific time. The values or estimates are planned and can change during the project. The planned value is used as a starting point to gage actual costs and is used primarily as a guideline to manage the project. If extra time is needed on a task the planned value takes the time into consideration.

Actual Cost

Actual cost is the amount actually expended for completing the project. The variables are combined to give a overview of the status of the project on any given day or future date....