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ScienceDirect Procedia - Social and Behavioral Sciences 92 (2013) 215 – 219
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Service Performance - Between Measurement and Information in the Public Sector Andreea-Ioana Costea *, Adriana Tiron Tudorb a b
Babe -Bolyai University, Faculty of Economics and Business Administration, Teodor Mihali 58-60, Cluj-Napoca, 400591, Romania Babe -Bolyai University, Faculty of Economics and Business Administration, Teodor Mihali 58-60, Cluj-Napoca, 400591, Romania
Abstract Around the world, performance in general and service performance in particular has different meanings, and there is no consensus about the concept, the measurement and information to be provided. In the context of public sector, an essential step is to establish the main features of service performance. Also, adequate measurements are necessary in use and for ensuring transparency of the use of public funds for satisfying the social needs of the users. This paper aims to identify the main characteristics that define the concept of service performance in the public sector to see how it can be measured and what information must be provided, using a deeply analyze of the relevant international literature. The current research provides a comprehensive framework of service performance in the public sector, useful for a large group of interested parties from which we mention just the most significance, like governments, managers, citizens, international organizations that provide financial aid. Improving the quality of service performance is an evolutionary process that builds on research, experimentation and practical experience. Service performance in the public sector entities should provide a high quality information, the way in which funds are allocate should be in a transparent way, efficient use of resources without raising questions on the use of resources and eliminate mistrust in the quality of services. © 2013 The Authors. Published by Elsevier Ltd. © 2013 The Authors. Published under by Elsevier Ltd. Open access underResearch CC BY-NC-ND license. Selection and/or peer-review responsibility of Lumen Center in Social and Humanistic Sciences, Asociatia Selection and/or peer-review under responsibility of Lumen Research Center in Social and Humanistic Sciences, Asociatia Lumen. Lumen. Keywords: service performance; public sector; performance measurement; service performance information.
* Corresponding author. Tel.: +4-007-405-53514. E-mail address:
[email protected]
1877-0428 © 2013 The Authors. Published by Elsevier Ltd. Open access under CC BY-NC-ND license. Selection and/or peer-review under responsibility of Lumen Research Center in Social and Humanistic Sciences, Asociatia Lumen. doi:10.1016/j.sbspro.2013.08.662
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1. Introduction Service performance in the public sector is a topic that receives increasing attention. Customer demands are changing rapidly as well as the services that they require. In the public sector, consumers participate in the service delivery process and services are provided from public stakeholder and the funding is mainly provided by public resources. Public services can refer to justice, fairness and equity, they are not only about efficiency and effectiveness. To measure the performance of public sector services we have to set financial and non-financial objectives, but minimal information is provided about how public sector entities establish their objectives. After this brief introduction, the second section aims to provide an overview using relevant literature sources which helped us identify the main characteristics of service performance in the public sector. Also, the second section provide an insight of the measurement of service performance and what type of information must be delivered. The third section provides the methodology research that we used for this paper. The fourth section focuses on defining the seven concepts that must be correctly understood when observing the service performance sector. In addition, we provided a better understanding of dimensions of service performance information. The last section presents the main conclusions drawn regarding service performance and suggestions for further research. 2. Literature Review of Service Performance in Public Sector Performance is a complex and contestable concept because has different meanings for different jurisdictions, determined by the organization and context (Carter, 1991). According to Halachmi`s (2005), public service signifies efficiency and effectiveness, a political issue on the agenda of most countries. Performance measures are to poorly defined but often discussed (Eccles, 1991; Schneiderman, 1999; Neely, 2005; Aubert and Bordeau, 2012). Bourne and Wilcox (1998) suggested that each performance indicator should have a definition to avoid creating misunderstandings between different people. Thomas (2006, p. 10) defines performance management as the regular generation, collection, analysis, reporting and utilization of a range of data related to the operation of public organizations and public programs, including data on inputs, outputs and outcomes. Also, performance measurement is defined as the process of quantifying action, where measurement is the process of quantification and action that leads to performance (Neely, 2005). More recently, the International Public Sector Standards Board (IPSASB, 2008, p.9) provided a definition of performance measurement. According IPSASB the term “performance measurement” – is used to indicate the way in which public sector entities set financial and non-financial objectives, measure performance and reports from the resulting data. An issue for choosing the indicators to measure performance in the public sector services is the difficulty of defining the targets for performance. This issue is specific to public organizations because in the private sector profit and value imperatives allow them to set targets more easily, in public sectors this is more difficult to define. (Van Thiel and Leeuw, 2002; Propper and Wilson, 2003). Fountain (2001) warns that the application of private sector techniques, such as performance indicators, cannot replace, often even may obscure such political or democratic outcomes of public service provision. Performance measurement information helps improve this aspect, but is not always used properly as a tool to improve performance and then defeat the purpose of developing performance measures (Lye, 2004). Public sector managers can learn how to manage a situation using the information contained in performance measures and this information can be used as an effective tool. However, there are many other organizational and environmental factors that can influence the use of performance measures for learning (Lye, 2004).
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3.
Methodology Research The literature review on the service performance in the public sector comprises researches published in journals. The paper attempts to summarize published research and tries to define the concept of service performance in the public sector. In this article, we tried to provide a comprehensive framework of service performance in public sector using the existing literature, useful for a large group of interested parties from which we mention just the most significant like governments, managers, citizens, international organizations that provide financial aid. Thus, the paper is a qualitative research based on the existing literature.
4.
Service Performance – The Main Features The necessity for measure service performance made IPSASB (2011) clarify the meaning of this term. Thereafter, service performance focuses on the value of an organization that determine how is performing. According IPSASB there are six terms that must be define to understand what is service performance measurement. Service performance
Objectives
Performance indicators
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Inputs Outputs Outcomes Efficiency Indicators - Effectiveness Indicators
Figure 1: The terms that define service performance
Objectives are results that a company wants to achieve (IPSASB, 2011), and these have to be specific, measurable, available to an acceptable cost, relevant and time-bound (method known as SMART). Public Finance Act (PFA, 1989 cited by Gregory and Lonti, 2008) defined inputs as the resources (salaries, equipment) that departments use to produce goods and services. Also, inputs can be defined as the resources of a reporting entity used to produce outputs in delivering its objectives (IPSASB, 2011). Outputs refer to resource allocation and rewards linked to measure performance (Hood, 1991). According IPSASB (2011), outputs are the goods and services, including transfers to others, provided by a reporting entity in delivering its objectives. Outcomes are the effects of outputs on communities and society for delivering the report entity objectives (Gregory and Lonti, 2008; IPSASB, 2011). Managers in charge of public organizations are traditionally accustomed to dealing with financial measures, but are less familiar with non-financial indicators and concepts, such as output and outcome (Arnaboldi and Azzone, 2010). To distinguish outputs by outcomes, we will give a pertinent example. In this respect, for example, an university has students that learn from the teacher, using their own resources (outputs), after which they will apply what they have learned in the university. This means that students receive a benefit, such as working for a company that needs employees on the studied field (outcomes). Efficiency indicators are measures of the relationship between inputs and outputs by imposing quality services with the minimum resources necessary to provide service (IPSASB, 2011; Athanassopoulos, 2003). According Gray and Hood`s (2007), efficiency is just one part of service performance in the public sector which aims to improve the way we work, where we work and how we engage with
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delivery partners and the wider public. Effectiveness indicators are measures of the relationship between outputs and outcomes (IPSASB, 2011). Using the terms of efficiency and effectiveness, Neely et al (1995) defines performance measurement as a set of matrix used to quantify the efficiency and effectiveness of the actions. 5.
The Dimension of Service Performance Information Citizens, before choosing the best public organization to meet their needs, try to compare and measure service performance, thus get more value for money (Meijer, 2007). Furthermore, for doing this comparison, service performance in the public sector entities should provide a high quality information, the way in which funds are allocate should be in a transparent way, efficient use of resources without raising questions on the use of resources and eliminate mistrust in the quality of services. In this respect, users have to be satisfied, and IPSASB (2011) identified four different dimensions of service performance information, such as the ”why” dimension, the “what” dimension, the “how” dimension, the “when” dimension. The “way” dimension offer information about the objectives that were set of the entities from the public sector. Improvements and changes in public organizations are required to have the organizational culture, employees with an open mind. Therefore, to apply changes in an organization to achieve the objectives, we need to use the performance measurement information. In addition, those objectives have the need or demand to be achieved. Furthermore, when we want to know “what” we need to accomplish the objectives, we have to establish inputs, outputs, outcomes, efficiency indicators, effectiveness indicators for delivering good services. Public sector organizations are managed in accordance with that country's political practice. Given to existing priorities, if the objectives are ambiguous define or not prepared properly are difficult to measure. This could lead to dysfunctions of performance measurement uses such as misrepresentation. To determine “how” the objectives were accomplished must compare the objectives and the resources targeted with obtained results, using information on the factors that influence results. Moreover, the “when” dimension includes comparisons of actual results with those obtained over the time. The key for having an effective overall of performance measurement is to use comparability. Also, an organization that encourages the use of performance measurement results over time likes to stay informed to improve future results.
6.
Conclusion and Future Research This paper argue that service performance in the public sector is an important topic which shows how is performing an organization. Increasing evidence in measurement performance in the public sector literature clearly suggest the importance of the need to develop a standardized definition. In this respect, the meaning of term performance measurement has to be very well defined and understood by everybody because they have to establish the objectives that want to achieve. Furthermore, establishing performance measurement indicators help to measure service. In the public sector, performance is not easy to be measured. In the private sector, the profit is an indicator that shows the performance of entities. On the other hand, the term of profit is unknown. Given to the definition that we found in the relevant literature, we can argue that service performance in the public sector can be define through the relation between efficiency and effectiveness of the objectives. Also, measurement of service performance is useful to make a comparison between public organization that offer the same services. Therefore, the assertion is that performance measurement information is used in a public organization for improvement, learning and change. Setting goals should be based on characteristics that define the organization, and that has to be real, tangible and precise. High quality information, transparency of the way in
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which they have used the public money and the use of resources are very important elements for a public organization, to eliminate mistrust in the quality of services. Future research will focus on the application of performance measurement in the public sector organizations. Performance measurement indicators established in this paper work can be developed and investigated in future research. Also, we will provide an example to see how are applied these indicators in the public sector organizations. References Arnaboldi, M., and Azzone, G., (2010), Constructing performance measurement in the public sector, Critical Perspectives on Accounting 21; 266–282; Athanassopoulos, A.D., (2003), Using frontier efficiency models as a tool to re-engineer networks of public sector branches: An application to the Hellenic Tobacco Organization, Elsevier B.V. , doi:10.1016/S0377-2217(03)00187-5; Bourne, M., & Wilcox, M. (1998). Translating strategy into action. Manufacturing Engineer, 77(3), 109–112. Carter, N. (1991), Learning to Measure Performance: The Use of Indicators in Organizations, Public Administration, Vol. 69, pp. 85–101; Eccles, R. G. (1991). The performance measurement manifesto, Harvard Business Review, 131–137 [January–February]. Fountain, J. E. (2001), Paradoxes of public sector customer service, Governance, 14, 55-73; Gregory, R. and Lonti, Z., Chasing shadows? Performance measurement of policy advice in New Zealand government departments, Public Administration Vol. 86, No. 3, 2008 (837–856); Halachmi, A.,(2005) Performance measurement is only one way of managing performance, International Journal of Productivity and Performance Management, Vol. 54 Iss: 7, pp.502 – 516; Hood, C.,(1991), A public management for all seasons? Public Administration Vol. 69 Spring (3-19), Royal Institute of Public Administration ISSN 0033-3298; IPSASB (2008), Consultation Paper Developments in Performance Measurement Structures in Public Sector Entities; IPSASB (2011), Consultation Paper Reporting Service Performance Information; Lye, J. (2004), Performance measurement in the public sector: a clarification and agenda for research, paper presented at the Fourth Asia Pacific Interdisciplinary Research in Accounting Conference, Singapore; Meijer, J. A., (2007), Publishing public performance results on the Internet. Do stakeholders use the Internet to hold Dutch public service organizations to account? Government Information Quarterly 24, 165–185; Neely, A. (2005), The evolution of performance measurement research: Developments in the last decade and a research agenda for the next, International Journal of Operations & Production Management, Vol. 25 Iss: 12, pp.1264 - 1277 Neely, A., Mills, J., Gregory, M., and Platts, K. (1995), Performance measurement system design – A literature review and research agenda. International Journal of Operations and Production Management, 15(4), 80–116; Propper C, Wilson D. (2003), The use and usefulness of performance measures in the public sector, Oxford Review of Economic Policy;19(2):250–67. Schneiderman, A. M. (1999), Why balanced scorecards fail. Journal of Strategic Performance Measurement, 6–11. Thomas, P., (2006), Performance Measurement, Reporting, Obstacles and Accountability: Recent Trends and Future Directions, Australia and New Zealand School of Government Monograph . Canberra : ANU E-Press; Van Thiel S, Leeuw F.,(2002), The performance paradox in the public sector. Public Performance & Management Review; 25(3):267–81;
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