APPLICATION OF PROBABILISTIC MODEL BY RASCH MEASUREMENT TO ESTABLISH A PERFORMANCE INDEX: A CASE STUDY IN AUDITS ON MALAYSIAN INSTITUTIONS OF HIGHER LEARNING

Performance measurement has traditionally been determined using historical data to establish the ‘best fit line’. Measuring performance in an appropriate way is vital to ensure valid quality information can be generated for meaningful use. A matter of prime concern in organisational excellence is internal audit, a control mechanism against systems failures. This paper promulgate the attempt of a new approach in establishing a performance measurement based on the Plan-ExecuteReport-Monitor (PERM) model, in this case the Audit Performance index; APi. Fakulti Kejuruteraan Elektrik, UTM (FKE) is certified to ISO9001:2000 and is subjected to audit of their engineering program effectiveness at planned intervals. A perception survey was conducted on FKE auditors and the management. Data obtained is used to calculate the indicators and indices which are closely connected with various emotional, cognitive and intentional components. Instead of the common use of simple means over several ordinal variables, Rasch Measurement ‘logit unit’ enable the construction of a linear scale, based on a set of survey items where the mean is the probability of a successful audit hence; the APi index. Using probabilistic model by Rasch Measurement, it was found that the probabilistic model can help establish a theoretical basis for measuring such service performance and help top IHL management in making good judgemental decision making. Rather than deterministic, the index established is unique as it