Why measure performance?

A multitude of disciplines and literatures have addressed the concept of performance measurement. Disciplines like public finance, management accounting and operational research all attend to the worries of performance measurement (Harrison, Paul & De Villiers, 2012: 243). For instance, in the private sector, performance measurement systems that have been developed in the past two decades seek to improve accountability in organisations by linking performance and the organisational strategy to the multiple stakeholder perspectives. In the public service sector, both internal and

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external pressures have driven governments to turn to private sector styles of management. Performance measurement has come to the fore as a means of showing and reporting on progress to stakeholders and more especially the taxpayers and citizens. One of the major emphases on performance measurement especially in the public sector has been to ensure informed decision-making and meeting the requirements of external accountability. Attention on creating knowledge-based economies has also significantly contributed to the need for gathering performance data to enable informed planning. Thus, for this reason, all instruments used for performance management base on measurement (Rondo-Brovetto & Saliterer, 2007: 6). Performance measurement is therefore increasingly being acknowledged as an integral part of various performance management strategies. In the 1980’s, in the United Kingdom, performance measurement rose to prominence in local government. The major reason for its rise was fivefold:

 “Pressure from the central government and the Audit Commission.  Greater public expectation and consumerism.

 Compulsive competitive tendering.

 Changing cultures and attitudes among local authority managers and  Loss of confidence” (Ghobadian & Ashworth, 1994: 36).

The majority of above stated reasons are congruent with the motives for the increased impetus for performance measurement in South Africa’s local government. The Department of Cooperative Government and Traditional Affairs (CoGTA, 2009: 14) in its Local Government Turn-Around Strategy of 2009 acknowledged the general loss of confidence in local government institutions by the citizens which the LGTAS seeks to restore. With greater access to information and citizen rights, citizen expectations for better service delivery have also risen significantly this pressure has led to the national government establishing the Department of Performance Monitoring and Evaluation in 2010 which is now spearheading the efforts for all government departments including local governments, to institute Result-Based Management of resources.

To validate the above claim, Jackson cited in Ghobadian and Ashworth (1994: 36) argues that “the importance of improving productivity goes beyond the issues of costs… the

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desirability of achieving higher quality and effectiveness is the important factor… it goes directly to the need for restoring confidence.” In South Africa, due to mismanagement,

bad management corruption and political interference, the general public has lost confidence in local government’s capacity to fulfil its constitutional mandate. Thus, performance measurement initiatives are an effort to report on performance and account to the public on the use of their taxes.

In the same spirit, performance measurement is therefore critical in enabling improvements in organisational efficiency and effectiveness (Ghobadian & Ashworth, 1994: 36). Performance data becomes a useful indicator of how well an institution is achieving its aims and objectives and in identifying which processes and policies are working (National Treasury, 2007: 1). It is therefore crucial to make use of available data and knowledge to improve the execution of government’s mandate. Performance information is thus crucial in enabling effective management, planning, implementation and reporting. The National Treasury (2007: 1) furthers asserts that the public sector delivers services essential to the well-being and development of the nation which therefore makes it important for them to formulate strategic plans, use resources wisely and to monitor and report on the results of their efforts in delivering services.

Thus, performance measurement information is essential in focusing the attention of public oversight bodies like the Auditor General and the Public Protector to check on whether public institutions are delivering on the government promise of “value for money” and executing their constitutional mandates. It becomes significant to acknowledge that “what gets measured gets done” and that if an institution is aware that it is being monitored, it is more likely to perform the required tasks and to perform them well (National Treasury, 2007: 1).

With Monitoring and Evaluation gaining national attention, it is imperative to create institutions that are geared towards institutionalising a culture of performance management. Performance measurement therefore enables stakeholders to track progress and identify areas of improvement by providing them with essential performance data critical in the monitoring and evaluation process. In the case of public sector

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institutions, this aspect is important in measuring goal attainment, particularly the needs of citizens.

In order to respond to organisational objectives and plans, organisations develop and engage in what they term strategic planning in order to come up with a strategy on how they will achieve their desired goals. However, the challenge with these concepts has been that their use is crowded with a lot of confusion especially in defining and explaining them which has therefore resulted in their diluted meaning and subsequent loss of value even when organisations claim to use strategic plans and engage in strategic planning, the outcomes of their strategies do not reflect what they purport. Thus, as strategy is a critical aspect of the BSC, these concepts merit a discussion in the section that follows.

2.2. Strategy and strategic planning in performance measurement