Outcomes vs. Outputs

I've always thought about outputs as the output to a process. I've heard Bob Kaplan describe a model with inputs->processes->outputs. You need to think about what you measure based on your certainty that the inputs and processes will get you the outputs that you are looking for. Thus, if you are uncertain about how to produce the outputs, you would just measure outputs and allow for the innovation of those being measures to get you to the output. But, if you know that doing X causes Y, then you can measure X and compensate people for X.

I think outcomes are the changes that result from producing good outputs. Thus you may track your outputs as the number of products that you sell, but the outcome of changing customer behavior may or may not be linked to that.

One of the best articles I have seen on this topic is at this link. http://www.performance-measurement.net/news-detail.asp?nID=221

The terminology (Outputs vs. Outcomes) is one that has the strongest roots in the Non-Profit sector.

AFAIK with regard to performance management it was proposed first in Australia in the late 1990s, where OOP (if I recall, the original papers used Outputs, Outcomes, Processes, but for this answer I've swapped Outcomes and Outputs to be more consistent with modern convention) model was suggested as a solution to problems in the management of performance in the Australian public sector. I don't have the citation to hand, but it certainly appeared in research papers pre 2000.

The OOP deconstruction arose because of the need to accommodate the impact of politically based changes in priorities occuring over a shorter time-line than the actions carried out in response to these priorities. Effectively in the OOP model, high level outcomes are articulated by politicians (e.g. "Safer Streets for our Children"), and civil servants propose "outputs" that will help address delivery of these outcomes (e.g. "more visible policing activity" and "better road signs to notify residential areas"). When these are agreed between civil servants and politicians, the civil servants then set up activity plans to help deliver the outputs.

This type of deconstruction echoes (and indeed influenced) the development of 3rd Generation Balanced Scorecard - where the constraints of 'four box' strategic linkages are replaced with simple "activity / outcome" perspectives in most organisations, and where appropriate (e.g. Public sector) a third layer for outputs can be introduced. This evolution is one of the several that have resulted in 3rd Generation Balanced Scorecard being considerably more effective than earlier designs for Performance Management design work.

HTH