THE ASPECTS OF PERFORMANCE MEASUREMENT IN PUBLIC SECTOR ORGANIZATION

Ingrida Balaboniene, Giedre Vecerskiene

Abstract


Purpose. To distinguish the performance measurement systems and their application possibilities in the organizations of public sector.

Methodology. At present the organizations of public sector are operating in the dynamical environment that forces the organizations to adjust to the constantly changing environmental conditions. The measurement of organization’s performance has been understood as one of management functions; however at present it is analyzed as the independently developing branch of science. The measurement of organizations in public sector is quite a problematic and very relevant issue. The performance measurement may be regarded as one of key tolls, which help to assess the present situation and to make decisions, which help to improve the quality of provided services with regard to this. Performance measurement is the tool that defines the organization’s improvement because no organization could operate effectively without measuring of its own performance. The importance of performance measurement in the organizations of public sector was increased even more by new public management, which objective was to adapt the performance measurement methods used in private organizations for organizations in public sector in order to organize the activity more effectively and to satisfy the needs of the users. The performance measurement theory and practice show that it is a complex process. Its complexity is caused by the nature of measured organizations in public sector and complexity of their activity.

Results. To suggest the performance measurement systems, which suit the most for measurement of organizations in public sector.

The theoretical contribution. The main goal of business organizations is to gain profit, while the organizations in public sector are non-profit making organizations. Therefore the problems arise when the performance measurement methods used for public organizations are applied for the public ones. Contrary to profit—making organizations, the objective of public sector’s organizations is to provide accessible and qualitative services, to satisfy public needs and to use the available resources effectively and efficiently. According to Zeithalm, Bitner, 2003, the competitive environment affects the most painfully such economic areas, which performance result is not tangible, and which impact is felt after the long time. Therefore it is very important for the public sector’s organizations to measure their performance systematically and consistently in order to improve the organization’s management and to increase the satisfaction of society with provided services and their accessibility.

The problems of performance measurement in the organizations of public sector were analyzed by Gimžauskienė (2006), Išoraitė (2008), Moxham (2008), Puškorius, Raipa (2002), and Pociūtė (2002), who stressed that performance measurement models are not easy to adjust for the organizations of public sector because these organizations are oriented to the processes and not to the results.

In order to measure performance of public sector’s organizations, it is very important to apply suitable performance measurement methods. This article analyzes the possibility to apply the complex combination of performance measurement methods known in business sector and applied in public sector sometimes, as this combination would help to focus on the core decisions of the organization in public sector, induce development of internal processes, increase the employees’ motivation for improvement and would serve as a tool to define the entity’s improvement as any organization cannot work effectively and objectively without measuring its performance.

The critical moment in performance measurement of public sector is to identify the factors affecting the performance results of the organization. This process is very important for decision-making, which would determine the future results of the organization. The concept of value-creating factors is always changing in the context of dynamic environment and this causes management problems. Therefore performance measurement system is becoming more and more important tool that helps to make management decisions of organizations in public sector. Besides, the practical application of the measurement results – information – should be stressed not only with regard to decision-making, but also in wider sense, i.e. for the purpose of accountability, transparency, publicity, social responsibility, information and education with regard to all the interested parties, (Segalovičienė, 2011, p. 439).

Keywords: performance measurement, public sector, public sector organization, methods of performance measurement.

Paper type: Theoretical paper.

 


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