Evaluating the performance effectiveness and efficiency of projects

This paper develops two performance evaluation processes to measure the relative performance effectiveness and performance efficiency of projects based on their expected and actual performance objective values. With an optimization model, the performance effectiveness evaluation process obtains a set of optimal weights on the performance objectives of the project by maximizing the total performance effectiveness value of all projects. The relative performance effectiveness of each project is then obtained by using a weighted-sum method. With a data envelopment analysis model, the performance efficiency evaluation process provides relative performance efficiency rankings of projects and identifies how inefficient projects can be improved. An empirical study is conducted to demonstrate how these two processes work and how their outcomes can provide managerial insights in evaluating the performance of projects.