PERFORMANCE DEFINITION

MEASUREMENT:

DEFINITION

ENT:

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 organisations 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 organisations 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 SECTOR THE PUBLIC SECTOR

ENT IN THE PUBLIC

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 schools 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