billing. This article identifies fallacies in the logic of PM and provides examples of ways in which PM is routinely misused. As a result, performance measures are frequently irrelevant-or worse. Used in isolation, they invariably reward and encourage the wrong activities and result in less, rather than more, attention to outcome and quality. This article also identifies strategies for effective use of PMs. In particular, it identifies how PMs can be useful for monitoring purposes, for raising questions, and for identifying areas requiring management attention. PMs, by themselves. are not appropriate for assessing outcomes, for determining future directions or for resource allocation. They can, however, be one important component of a comprehensive evaluation strategy.