Performance Measurement Model Formation in Municipalities

Abstract

In a rapidly moving society the pressure on the public sector is growing to provide results that are important to local community. Therefore, performance measurement is becoming a vital tool for local government modernisation. The purpose of this paper is to develop the model of performance measurement system in municipalities that enables to disclose the peculiarities when measuring the performance and to ensure the utility and internal resources based on continual improvement in municipalities. The literature analysis revealed that municipalities are extremely complex and that various regulators and peculiarities should be incorporated into the formation of performance measurement model in municipalities. The formed performance measurement model suggests measuring the performance through external and internal environment, where the three main types of accountability are included. Developed performance measurement model is being implemented by applying six main stages. The findings of created performance measurement model highlighted the necessity to test empirically the applicability of created performance measurement model for municipalities. The type of the article: Theoretical article.

Measuring Performance: Case of Lithuanian Municipalities

“…The environment of performance measurement also involves the institutions and stakeholders that may also have a direct or indirect impact on the municipalities and functions of each institution. So municipality's dependence on the central and / or regional authorities has a significant impact on its performance (Kloviene & Valanciene, 2013).…”

“…Municipalities also perform a number of functions delegated by the state where the implementation of the funding comes from the state and / or regional budgets, and for which the municipality is accountable to the central or regional authorities (Jaaskelainen & Laihonen, 2014). Budget and appropriations are also attributable to the activities of municipalities regulating entities, since on the size and allocation of appropriations depends the quality of performance carried on various projects and activities (Kloviene & Valanciene, 2013). What is more, accountability between the subdivisions of municipality or accountability between the municipality and responsible governing bodies, also determines the performance of municipalities.…”

“…Accountability involvement into the performance measurement system would clearly structure the division of such roles. Another important aspect of the regulation is the local community where the municipality operates (Kloviene & Valanciene, 2013). Only a positive assessment on the local community about the performance of municipalities can ensure proper and efficient local public services (Nisio, de Carolis & Losurdo, 2014).…”

“…Municipalities are different from organizations such as, for example, departments, ministries and other budgetary institutions, which do not have special interest groups representing the institution. On the other hand, the municipality is different from social organizations and political parties, in which executive power-implementing employees housing is undeveloped (Kloviene & Valanciene, 2013). However, municipal organizational structure is characterized by the fact that local governments establish and manage a variety of enterprises and institutions providing public services (Greiling & Spraul, 2010).…”

“…One of the main goals of municipalities is public welfare, where all the residents of the municipality are ensured equal access to developed infrastructure and public services (Behn, 2003). Also, municipality, as a public legal entity whose activities are strictly regulated by various laws and regulations, must contribute to the rule of law, eradicate corruption and ensure fairness, financial transparency and democratization (Kloviene & Valanciene, 2013). By implementing the European Union's priority objectives municipality as well as other public institutions are obliged to seek the adoption of integrated smart growth, sustainable energy and inclusive growth in efficiency plans with clear objectives to involve citizens in their development and implementation and to adequately inform them about their plans content and progress in achieving objectives (European Commission, 2010).…”