Perfrmance Defin

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PERFORMANCE MEASUREMENT: DEFINITION ENT:

DEFINITION

Though the term performance measurement has been used since the late

1970s,

there has not been a universal definition for the term. The Government

Accountability Office

(GAO), 1980, defined performance measurement as “an assessment of

an organisation’s

performance, including the measures of:

• Productivity, which quantifies the outputs and inputs of an organisation

and

expresses the two as a ratio. Generally, the ratio is expressed as output to

input.

• Effectiveness, which determines the relationship of an organisation’s

outputs to

what an organisation is intended to accomplish. - 4 -

• Quality, which examines an output or the process by which an output is

produced. Quality is indicated by attributes such as accuracy (or error

rate),

thoroughness, and complexity.

• Timeliness, which evaluates the time involved producing an

appropriate output.

(Citizen-Driven Government Performance, 2004)



The most commonly used definition of performance measurement is that

of Neely,

(1998): “the process of quantifying the efficiency and effectiveness of

past actions through

acquisition, collation, sorting, analysis, interpretation and dissemination

of appropriate data”

(as cited in Moullin, 2003, p.3). Though this definition has not stated

what the nature of the

data collected should be (i.e. financial vs. non-financial) it seems to be

concerned with the

process itself of measuring performance in the management accounting

field rather than its

purpose, and restricted to quantitative measures rather than qualitative

ones. Hence,

Moullin, (2002), defines performance measurement in terms of its

purpose emphasizing the

assessment of how well organisations are managed and the value they

deliver for stakeholders.

PERFORMANCE MEASUREMENT IN ENT IN THE PUBLIC

SECTOR THE PUBLIC SECTOR

Like the private sector, public sector organisations around the world face

pressure to

improve service quality, lower their costs, become more accountable,

customer focused and



responsive to stakeholders’ needs. While PMS have long been advocated

as successful in

the private sector, it was once, considered impossible to measure

performance in the public

sector. The first attempts at the evaluation and review were associated

with the failed

attempts at large scale strategic planning in the 1970s and it was not

until the appearance of

organisational and managerial reforms introduced by the conservative

governments in the

1980s and 1990s that public sector performance measurement became

firmly established

(Boland and Fowler, 2000, p.417). It should be noted at this stage that

the justification of this

paper for drawing evidence from the UK in particular is based on the

fact that New Public

Management prescriptions have been applied in that country more

consistently than in many

other countries over a quarter of a century (Cutler and Waine, 2005).

Examples of PMS in the public sector exist in schools where there are

two main

systems for measuring schools performance: OFSTED (Office for

Standards in Education)



established in 1992, which involves an in-depth evaluation of the

school’s processes and

outcomes, and PI (Performance Indicators) which involves the collection

and publication of

summary performance indicators including truancy rates and GCSE pass

rates.

Furthermore, in the NHS, the government has adopted a balanced

scorecard approach in

their measurement system “Performance Assessment Framework”

(PAF). As noted in a

recent consultation document:

“The Performance Assessment Framework … is based on the b

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