Performance Measurement Baseline:-

The reference point for measuring performance is the performance measurement baseline (PMB). It serves as the metric benchmark against which performance is measured in terms of time, cost, and scope. It is also used as the basis for business value tracking.

The principal reasons for establishing, approving, controlling, and documenting the PMB are to:

• Ensure achievement of project objectives.

• Manage and monitor progress during project execution.

• Ensure accurate information on the accomplishment of the deliverables and requirements.
• Establish performance measurement criteria.

A performance measurement baseline is typically established for an entire project. In addition, it is often broken up to a more granular level. In a work breakdown structure (WBS), it can refer to a control account that contains one or several work packages or planning packages.

The performance baseline consists of the 3 baselines that are also components of a project plan:

• Project Scope Baseline: Project scope baseline defines the scope of a project in terms of combining the scope statement and the defined work breakdown structure of the project.

• Project Schedule Baseline: The schedule baseline defines the schedule of project activities (based e.g. on estimated activity durations and schedule network diagrams).

• Project Cost Baseline: The cost baseline is the budget allocated to project activities (based on cost estimates). Both the schedule as well as the cost baseline include contingency reserves but do not contain the management reserves.

PMB is finalized at the end of the planning phase once the requirements have been defined, the initial costs have been developed and approved, and the schedule has been set.

Once established, the PMB serves as the benchmark from which to measure and gauge the project’s progress. The baseline is used to measure how actual progress compares to planned performance. Performance measurement may be meaningless without an accurate baseline as a starting point. Unfortunately, project managers tend to create baselines based upon just those elements of work they feel are important and this may or may not be in full alignment with customer requirements.