A systems perspective of performance management in public sector organisations

TLDR

Performance measurement in public sector organisations is examined from a systemic perspective, focusing on indicators and improvement initiatives that form a causal loop between perceived performance and corrective actions, constituting a feedback control system. The study investigates how a two‑dimensional matrix model informs performance management and system dynamics, proposing influence diagrams and dynamic simulation models to unravel complex cause‑effect interactions. The authors propose a two‑dimensional matrix model of control source versus control action, complemented by influence diagrams and dynamic simulation examples drawn from public sector cases to illustrate performance management dynamics.

Abstract

Presents, from a systemic perspective, an examination and discussion of performance measurement, performance indicators and associated improvement initiatives, as typically applied in public sector organisations. Such mechanisms are usually implemented as a causal loop which is established between perceived performance and resulting actions, thereby constituting a form of feedback control. Within this context a two‐dimensional matrix model is postulated in which the independent dimensions are the source of control and the nature of the resultant control‐action. The paper examines the implications revealed by this model within the context of performance management and system dynamics. The potential role of influence diagrams and dynamic simulation models is thereby introduced as a potential means of unravelling the complex behaviour which can often arise in the presence of such interactive cause‐effect loops. A number of typical examples, drawn from within the public sector, are invoked to illustrate the discussion.