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These two concepts are used interchangeably and yet they are completely different.
Evaluation is more comprehensive than performance measurement.
Performance measurement is part of evaluation.
Performance measurement mainly deals with targets of specific indicators within a certain period.
Performance evaluation questions the relevance and effectiveness of the results (measured by the indicators) with respect to the goals of the initiative or project. Evaluation also examines intervening variables and appropriateness of the processes used. It offers interpretation of why certain things failed or could have fared better.
Performance measurement doesn’t stretch that far.
Evaluation focuses on an intervention. Measurement focuses on a result.
Performance measurement questions “Is this result improving or not?”
Performance evaluation questions “Did this intervention work or not?”
Evaluation is a point in time. Measurement is through time.
Performance evaluation is usually about a before and after comparison. You want to set a baseline with certain indicators before an intervention takes place, and then compare those same indicators after the intervention is done.
Performance measurement is a continual monitoring of a result through time, often for many years, to look for different signals of change that might be due to a range of different programs or campaigns or initiatives.