Performance measurement methods in the public sector

Abstract

The notion of performance measurement (PM) in the public sector emerged in the framework of the New Public Management paradigm and public management reforms in industrialised as well as in developing countries. The paper discusses the following issues regarding PM - the definition of performance and types of measures, purpose of the PM and possible threats while applying PM. Firstly, as regards the types of measures - it is argued that measures of efficiency and effectiveness should be preferred over output measures Secondly, the purposes of PM are: informing users in the budget cycle, better planning, improved management, increased transparency and last but not least PM can motivate future performance. Thirdly, concerning the threats to the performance measurement: gaming, imprecise objectives and unprepared transfer of the new management system can make PM unreliable. The purpose of this paper is to overview and assess the recent developments concerning performance measurement and its methodology. It is also meant to add to the discussion on performance budgeting at the moment of the evaluation of Poland's first performance budget in 2008. (original abstract)