Performance measurement in municipalities

Abstract

PurposeThis paper examines the actual and desired use of performance measures for management and external reporting purposes, as well as perceived impediments to their effective use.Design/methodology/approachA total of 334 senior administrators in Canadian municipalities participated in this survey study.FindingsSomewhat more efficiency measures than effectiveness measures have been used for various purposes. However, greater use was perceived desirable than actually occurred, particularly for effectiveness measures. A significant increase in the use was expected in the near future especially for effectiveness measures. Internal and external verification of measures was considered important by both internal and external auditors. Although the study also identified impediments to the development and meaningful use of performance measures, performance measurement appears to have been accepted as a useful managerial tool and have significant future potential.Research limitations/implicationsThe results are limited by the survey method.Practical implicationsThe results can provide guidance to public‐sector administrators and professionals for planning and decision making purposes and to professional bodies and regulatory agencies for developing comparative performance reporting standards.Originality/valueUsing the descriptive and normative perspectives, this study provides new evidence in the Canadian context. It concludes that, although the mandatory performance measurement and reporting requirements for municipalities in Canada lag those in the UK, the USA, and Australia, a significant degree of usage occurred voluntary in Canadian municipalities.

A study on the criteria of internal transparency, efficiency and effectiveness in measuring local government performance

“…Based on these definitions, which are central to PMS design, a PMS is defined as 'a set of metrics used to quantify both efficiency and effectiveness of actions' (Neely, Gregory, & Platts, 1995, p. 81), while a KPI is 'a metric used to quantify the efficiency and/or effectivity of an action' (Neely et al, 1995, p. 80). To measure efficiency and effectiveness, four types of KPIs exist: input, process, output and outcome (Ammons, 1995;Hoque & Adams, 2011;Pollanen, 2005).…”

“…Here we follow Neely et al (1995), who defined performance measurement as 'the process of quantifying the efficiency and effectiveness of actions' (p. 1229). To facilitate performance improvements, it is therefore necessary that the criteria of efficiency and effectiveness in PMS design are met and, to this end, that the four types of KPIs -input, process, output and outcome measures -are considered (Ammons, 1995;Foltin, 1999;Hoque & Adams, 2011;Pollanen, 2005).…”

“…The choice of KPIs is therefore one of the most critical challenges of performance measurement facing public managers (Ittner & Larcker, 1998), as adequately designed KPIs are capable of providing higher levels of internal transparency, thereby rendering possible efficiency and effectiveness improvements (Anthony & Govindarajan, 2003;Lapsley & Ríos, 2015;Pollanen, 2005).…”

Joining public accountability and performance management: A case study of Lethbridge, Alberta

“…Although mandated public performance reporting is widespread in western countries (Moynihan 2008), Canadian local governments have largely been exempt. In his survey of senior managers in five Canadian provinces, Raili Pollanen (2005) found that only twenty per cent of his 334 respondents indicated that external reporting was required. Ontario and British Columbia are among the five provinces included in his survey, and both require local governments to report annually.…”

“…Although there are a few studies of the ways in which elected officials use performance information (Askim 2007), there are no studies to date that have systematically compared the views of managers and elected officials in specific jurisdictions on the usefulness of performance measurement information for managing performance. Pollanen (2005) suggests that elected officials would probably not be interested in performance information. Indeed, for provincial, state, and national governments, a consensus is emerging that elected officials generally do not use performance information, or use it very sparingly (Bouckaert and Halligan 2008; Moynihan 2008).…”