Paste Performance measurement is not an invention by the scholars of the 21st century. The early studies of management giants like Taylor (1911), Willoughby (1923), Gulick (1937), Ridley and Simon (1938), these scholars agreed and shared common concept for the development of administrative practices and procedures that promote efficiency and effective service delivery (Nyhan, Marlowe, Taylor, Nyhan, & Marlowe, 2016). A study by Poister & Streib, (1999) contends that the International City Management Association made a publication on measuring municipal activities as far as 1943. As Halachmi (2005) reveals that before the world war II, the New York Bureau of Municipal Research used a budgetary system based on work-load. Therefore, Performance measurement is as old as other management concepts that have be refined by contemporary authors.
Performance measurement has modernized the public sector, it has obviously established transparency, accountability and has exposed the government entities to public scrutiny and has also brought the public sector onto the table of public debate. With the performance measurement the citizens’ trust in the government institutions has been restored, and it recognizes citizen as co-producers, owners, evaluators and customers who must be treated as an important person (Sanger, 2008). As Jarrar and Schiuma (2007) contend that performance measurement in the public sector organisations provides ways for influencing organizational behaviour, monitor organizational progress and reward, for planning and strategy implementation, for communicating with stakeholders and for adopting developing the principles of organizational learning. There is no doubt to emphatically state that performance measurement is the axis through which performance management revolves around (Anderson, 2013).
Apparently, organizational management could be uncertain without performance measurement. Performance measurement is an administrative practice that addresses the issue of performance challenges in the public sector organizations (Goh, 2012). Lord Kelvin once said, "if you cannot measure it, it does not exist". As De Bruijn (2007) reports functions of performance measurement as enhancing transparency, learning from experiences, for appraisal and for positive sanctions. Without exaggeration, the importance of performance measurement within the contemporary public organizations cannot be under estimated, it is the life wire of all successful organizations. Though, the importance of performance measurement cannot be easily explained quantitatively. However, studies on organizational improvement have clearly indicated that performance measurement is a key to organizational improvement. Both profit and nonprofit organizations always strive to be successful and continue to be in an operation, therefore, it requires the measuring of performance of all the components in the organization. Contemporary and practical researches have vividly proven how performance measurement can help both private and public entities (Breul & Kamensky, 2008).
There are scholarly literatures that show that performance measurement in the private sector indeed results to improvement in performance. In contrast, the implementation of performance measurement approach in the public sector has become problematic because of the difficulty in identifying the appropriate components for measurement (Anderson, 2013). According to (Sanger, 2008) performance measurement still have some deficiencies for its successful development and implementation and further proposes that more intensive research is needed to identify the problems that mitigate against the successful design, implementation and the usage of performance measurement in the public sector.
The main aim of this thesis is to identify the current challenges associated with the measuring of performance in the public sector organizations.
This research work has been categorized into six distinct parts, the introduction appears at the first part of the work which presents a brief historical facts of performance measurement and the importance of performance measurement in the public sector. Also, showing why this research is necessary and its contribution to the existing research. The second part will be the theoretical background that will provide relevant sources of previous related research and a justification of the research area on performance measurement and the current challenges in the public sector. The methodology of survey and research approach will be discussed in the third part. The forth part of the thesis will be related to the analyses of the current challenges of performance measurement in the selected public sector. The fifth aspect of the thesis work will be the evaluation of the results and discussion and further make a comparison to the related literature in the theoretical background. The last part will be the conclusion drawn from the discussion of the results.
The scope and the concept of public sector have become more complex over the years. There is no worldly accepted boundary and definition for the public sector. This has generated a heated and unending debate among scholars from both political science and economics. The description of the scope of the public sector depends on the vision of the state and it also depends upon your weighing up the costs and benefits of two highly imperfect social institutions: the market and the public. The public sector covers an expanding sphere of institutions which formulate policies and implement those policies for public interests (Jackson, 2009).
The public sector consists of governments and all institutions that are publicly controlled and funded by the state whose responsibility is to deliver public goods, service and programmes to the citizens. The concept of public sector has a broader spectrum than simply that of core government and may overlap with the private sector (Dube & Danescu, 2011). The public sector is a composition of private and public elements (Chan, 2002). The public sector usually overlaps with the private sector because private sector often performs some functions which are purely public. Therefore, for better understanding of the concept of the public sector one needs to distinguish between the public sector and the private organisations. The public sector has collective ownership as it encompasses all the citizens and its establishment is for social purposes, while the private sector has individual ownership with inherent intention of profit maximization (Bouckaeert & Dooren, 2009).
Dube & Danescu, (2011) have presented definitional criterial for public sector and these include:
‘ Are the goods, services and programmes delivered by the institution are guided by government policy or these goods, services and programmes can be considered as purely public goods?
‘ Is the organisation answerable to, or does it submit report directly to the state, including ministers of state, state agencies or departments?
‘ If the institution has board of directors or appointed members, does the government appoint the majority of these board of directors?
‘ Is the state the majority shareholder, if the institution has share capital?
‘ Is the organization’s budget provided by the state or is the budget determined by the national policy?
‘ Is there a legal instrument for the institution to be audited by the state auditor or a recognized audit organisation?
‘ Does the institution’s operations, policies, services and administrative procedures directly or indirectly control by the state?
‘ Are the workers in the organisation members of public service, guided by public service code of conduct and receiving benefits from the state budget?
The scope of the public sector has an unending boundary; thus, the public sector covers all the institutions that are funded from the state, regional and the municipal budget, and deliver public goods and services for the interest of the citizens. The public sector production is not under any healthy competition but rather provides goods, services and programmes for social purposes. All public sector institutions have legal power from the government to provide classified goods and services and these institutions’ control lies in the hands of the pubic.
1.2 Performance Management
Performance management has become popular and vital in the public sector since the emergence of NPM. Performance management system has now become one of the basic practices in the public institutions stretching from policing to social services. Institutions with performance systems are performing better and are likely to be efficient than institutions that do not have performance management systems in place (Ljungholm, 2015) . Performance management concept has been defined severally and differently by scholars from economics to management. Many authors have understood the concept as an appraisal process, performance related activity and others still believe that it is training and development programme. However, these scholars use performance related activity as the reference point (Tenakwah, 2015). Neely, et al., (2002), postulate that performance management is process of quantifying the efficiency and effectiveness of past actions of the individuals in the organisation. According to Moynihan, (2008), performance management is a system that collates information on the performance of all the components of an organization through performance measurement activities where this information influences the decisions of the management). Fryer, Antony & Ogden, (2009) suggest that performance management is an action oriented which is basically based on performance measures and reporting where the end products are improvement in employees’ behavior, motivation and promotes innovation.
Armstrong, (2009), argues that performance management is a means of getting better results from the whole organization or teams or individuals within it, by understanding and managing performance within a shared objective from the individuals and a planned goals, standards and competence requirements. While Pradhan and Chaudhury, (2012), report that performance management is a procedure of monitoring improvement towards achievement of predetermined objectives for the accomplishment of organizational objectives by satisfying customers’ needs better than their competitors. Performance management must be considered as part of the whole system of every public organization and should not be in isolation from other factors that constitute public management (Bouckaert & Halligan, 2008). Performance management is a management environment where performance objectives and targets are determined, it is flexible to be achieved by managers, actual performance is measured and reported, and the information gathered is used for making informed decisions, design, operations and paradoxically for rewards and sanctions (OECD, 2005). Performance management is an interconnected activities and strategies that improve the performance of individuals, teams and the entire organization (Hawke, 2012). Aguinis, (2009), posits that Performance management ‘is a continuous process of identifying, measuring, and developing the performance of individuals and teams and aligning performance with the strategic goals of the organization’ (p. 2). Performance management is not a linear preposition but rather unending process that ensures that employees’ activities and productivity are congruent with the visions, goals and objectives of the organization and this helps the organization to gain a competitive advantage over their rivalry organisations.
Related to the above definitions from the various writers, the conclusion drawn from these definitions is that performance management in a process of identifying through performance measures with aim of improving employees’ performance and for achieving organizational goals. Performance measurement is a continuous process that monitors and assesses the efficiency and effectiveness of all components in an organization. The aim of performance management is to improve the performance of employees, satisfying the needs of the stakeholder and making the organization better than other competitors. The implication is that for organization to be more successful the organizational camera must be focused on the management of the performance of employees.
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