Premium
Outcome‐related Performance Indicators and Organizational Control in the Public Sector 1
Author(s) -
Smith Peter
Publication year - 1993
Publication title -
british journal of management
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 2.407
H-Index - 108
eISSN - 1467-8551
pISSN - 1045-3172
DOI - 10.1111/j.1467-8551.1993.tb00054.x
Subject(s) - dysfunctional family , outcome (game theory) , public sector , incentive , control (management) , abandonment (legal) , audit , management control system , performance indicator , business , public relations , performance management , process (computing) , organizational performance , service (business) , accounting , economics , marketing , political science , management , psychology , computer science , law , mathematical economics , psychotherapist , microeconomics , operating system
SUMMARY There is increased interest in the widespread dissemination of outcome performance data to secure enhanced strategic control of public sector organizations. This paper adumbrates the rationale for such schemes, and outlines the potential distortions induced by excessive reliance on outcome‐related performance indicators, inferred from experience in the management control and Soviet literature. The paper gives an outline of the performance review process in the United Kingdom National Health Service, and presents the results of a case study of the impact of the publication of outcome performance data in the maternity services. The research detected many of the expected distortions arising from reliance on performance indicator schemes, and concludes that they may have significant dysfunctional consequences. The paper does not however advocate the abandonment of performance audit in the public sector. Instead, it warns that great attention should be given to the managerial incentives implicit in any strategic control scheme, and that the style with which the scheme is applied will have important bearings on its effectiveness.