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Measuring the performance of academic departments received little attention compared to other industries due to their complex nature and difficulty in measuring their outputs. However, measures of performance are needed to assess whether they meet their set objectives and foster an environment of continuous improvement. The objective of this paper is to develop a performance measurement system for educational institutions. It outlines the properties of adequate performance measures and the steps for developing such measures in an educational environment. Three types of performance measures are proposed. These are outcomes, inputs and process measures. Suggestions are made to select the most appropriate and relevant performance measures pertinent to academic departments’ goals and objectives. Also the need, relevance and implementation issues in the context of the Saudi Arabian educational system has been discussed and highlighted in the paper.

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