Performance Measurement Systems Essay Example | Topics and Well Written Essays - 2500 words

Performance Measurement Systems - Essay Example This paper presents an understanding of performance measurement systems and their effectiveness in enhancing employee performance. It also discusses the way performance measurement systems should be implemented so as to achieve desired outcomes and motivate employees to perform accordingly. Performance measures are of critical importance to all organisations, public and private both. Organisations are increasingly being focused on devising and implementing sound performance measurement techniques and systems so as to direct employees' behaviour and efforts towards the achievement of organisational goals. Performance measures are generally concerned with gauging the extent to which an organisation achieves desired or planned outcomes out of all the efforts and investment put into the operation. Adcroft propounds that "central to pretty much all measures of organisational performance is an understanding of the relationship between economic inputs and outputs" (2005, p388). An organisation, whether private or public, is said to be performing well if the performance measures or means to gauge the level of employee performance verify that the efforts have led to the desired outcomes in the favour of the organisation. Public and private sector organisations both have different objectives behind formulation and implementation of different performance measures. De Bruijn says that "a public organisation formulates envisaged performance and indicates how this performance can be measured by defining performance indicators" (2002, p579). Public organisations for instance NHS, public libraries and universities gauge their performances by setting standards against which actual performance can be measured. Due to the fact that most public sector organisations do not operate for profit motives, these organisations cannot set performance goals on the basis of achievement of profit targets. The public organisations have therefore different objectives and purposes for performance measurement as compared to private sector organisations working for the achievement of profit goals. In public sector organisations, performance measures are generally intended to achieve the objectives set out primarily by government and local bodies. It is because these organisations are not motivated by profit targets, they can not measure performance through budgeting etc. Parker says that in public sector organisations, "performance measures should be designed to inform all of the stakeholders of the effectiveness of their service, reflecting the objectives of Government and Local Authority" (2006, p35). In this way, performance measures in public sector organisations will not inform the sectors on profitability of operations, rather the efficiency of services they provide to the customers for example efficiency of health services in NHS and services in public libraries. Performance Measurement and Organisational Structure: The increasing focus on performance management to emphasise control issues and achievement of organisational purposes has led to an evident shift in organisational structure and approach towards control systems. It has diversified the focus of control systems