Financial measures:
• Proportion of overall funds spent on administration costs
• Ability to stay within budget/break even
• Revenue targets met.
Economy targets:
• Costs of purchasing books of suitable quality
• Costs of negotiating for and purchasing equipment.
• Negotiation of bulk discounts
• Pay rates for staff of appropriate levels of qualification.
Efficiency targets:
• Levels of wastage of outdated books
• Staff utilisation
• Equipment life.
Effectiveness targets:
• Numbers using the library
• Customer satisfaction ratings
• Quality of books and speed of internet served

Value for money (VfM) is the process of ensuring that resources applied to achieve optimal results in the most sustainable way and also for the right target.

Economy – this measures the acquisition of inputs at the highest quality, at the lowest cost and within acceptable time for achieving a given output.

This measures the amount of resources used to achieve a giving output. It also considers the proficiency and appropriateness of the process used for converting the input into output.

This measures the extent to which stated objectives are achieved

Similarities

• VfM and value maximization are both corporate objectives which can be used to measure performance of managers.
• As performance measure benchmark, they ensure resources are utilized efficiently for the acquisition of inputs to yield best results.
• Achieving VfM and ensuring corporate value maximization all have positive social impact.

Differences

• VfM is an objective for not-for-profit entities whereas value maximization is emphasized in profit making entities
• Whereas VfM considers social welfare at large, value maximization focuses on the interest of the shareholders (few owners of the business)
• VfM may sacrifice economic benefit for overall social good, especially for vulnerable groups but value maximization focuses on economic returns to the owners for every resource utilised.