How Do Performance Indicators Add Up? An Examination of Composite Indicators in Public Services

Abstract

Composite indicators are an aggregation of underlying performance indicators into a single index and have been used widely in the public sector to create league tables. This article investigates the degree to which composite measures are an appropriate metric for measuring performance. The authors illustrate the degree of uncertainty in the construction of composites and how rankings are sensitive to the way in which the performance indicators are aggregated. The article highlights the issues which need to be considered in the development and use of composite indicators for performance management purposes.