This paper develops a theoretical framework which combines ideas underlying new public management (NPM) with new institutional sociology (NIS) to explore the development of performance management during a period of healthcare reform. The framework distinguishes three categories of explanatory variables; NPM antecedents, the institutional environment and institutional elements within a three tier level of analysis; economic/political, organisational field and organisational unit level. Evidence to support the relevance and appropriateness of this framework is gathered within the Irish health service using in‐depth interviews, a questionnaire and documentary data. The application of the framework highlights that all antecedents of NPM can be influential and that all institutional elements can play a role at the three different levels of analysis.

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Performance management in the public sector is both multifaceted and convoluted. This is particularly pertinent in hospitals, which are complex institutional organizations. Our paper explores the key drivers compelling Irish public acutecare hospitals to monitor their performance. The context of our study is located against the unique historical backdrop of the Irish health service, whose evolution over time reflects religious control, underfunding by the State and reliance on a decentralized structure up until the early 2000s. This study was conducted during 2009-2010, in the aftermath of the financial crisis of 2008-2009. Interviews were conducted with members of the hospital executive management team, comprising clinical and nonclinical senior managers, using the framework of Kelly et al. (2015) to explore and analyze respondent perspectives. We propose that a combination of key forces, emanating from new public management, the institutional environment, and its constituent elements spurs hospitals to monitor their performance. The confluence of these forces reveals a perceived change in the institutional logic underpinning hospital performance management. This change involved the substitution of autonomous clinical decision-making for a more team-based managerial logic whereby clinicians engaged as part of a This is an open access article under the terms of the Creative Commons Attribution License, which permits use, distribution and reproduction in any medium, provided the original work is properly cited.

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