**5.1. Performance assessment**

As previously mentioned, IAM aims at ensuring that, in a long-term perspective, service performance is kept adequate, risks incurred are acceptable and the corresponding costs are as low as feasible. Assessing performance, risk and cost is therefore key to effective IAM.

Performance may translate by either the efficiency or the effectiveness of the service. Per‐ formance assessment is a widespread activity used in economics, business, sports and many other walks of life in general, in order to compare and score entities and individuals and take management or other decisions (Alegre *et al*., 2000, Matos *et al*., 2003, Alegre *et al*. 2006, Cabrera &Pardo, 2008, Sjovold *et al*. eds., 2008, ISO 24510, ISO 24511, ISO 24512).

Assessment is defined as a "process, or result of this process, that compares a specified sub‐ ject matter to relevant references" (ISO 24500).Performance assessment is therefore any ap‐ proach that allows for the evaluation of the efficiency or the effectiveness of a process or activity through the production of performance measures. Performance measures are the specific parameters that are used to inform the assessment. The principal categories of per‐ formance measures include (Sjovold *et al*. eds., 2008):


Performance indicators may be converted into performance indices through the application of a performance function, or into performance levels when they are compared with refer‐ ence levels, in order to support interpretation or multi-criteria analyses. Such transforma‐ tions may be particularly useful in the graphical representation of a set of performance indicators.
