Essay Sample on Performance Management in the Public Sector, Non-Profit Sector, and Government

Performance management is a complicated concept that has received significant attention in the business world. The existing theoretical and empirical evidence only focuses on the design, adoption, and application of performance management. Besides the recent growth of small and medium enterprises in the developing nations, there is still limited focus on performance management in public, non-profit, and government sectors hence the need to invest more in the area. Between the public, non-profit, and government, the non-profit sector is different since there is no profit maximization and no framework which can be used to measure performance (Verbeeten, 2008). Non-profit differs from the government and public sector in terms of revenue sources, stakeholders, and overall performance assessment criteria. This paper will assess the validity and functionality of performance management within public, non-profit, and government agencies; furthermore, it highlights the need to enhance the performance-trust link to help achieve the set organization goals.

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The Concept of Performance Management

The performance management concept is seen as the achievement of the organization with regard to the set goals. It includes the outcomes attained by the organization through the contribution of the individual or team members. The concept involves economic and behavioral expectation which plays a critical role in the workforce capacity building and the effectiveness of the public sector. Effective performance management in the public sector linked to the organization's objectives often leads to improved public sector performance and an ultimate positive impact on the community's perception of the sector as a whole (Verbeeten, 2008). The public sector has borrowed the management practices of the private sector to help achieve the bigger objective of doing more with less resources and maximize the profits. In the same tone, there has been a greater emphasis on the reward system and results besides the overlooking compliance with administrative procedures. Because of the importance of performance management in the public sector, there have been standards set to assist with the validity, equity, and merit during the performance management process.

The concept of performance management was first introduced in non-profit sector since they were seeking to achieve the expected returns on investments. Until now, the sector has continuously received a demand for performance measurement from foundations, government agencies, and donors who have an interest in their success. As a result, it is challenging to determine the performance of most non-profit organizations given the diverse and complicated nature of their objectives. Ineffective non-profit entities can have a negative impact on numerous stakeholders such as the donors and government agencies such that the decision making and the realization of the goals are impacted (Privett, 2012).

The past decade has seen a significant increase in the utilization of performance management in government systems. Even though the earlier proponents focused more on the possible benefits that come with it, there has been recent work that has called into question the efficacy of the prevailing policy-based systems. There has been questions that arise with the use of policy-based systems hence the need to include performance-based systems that help in the organization, automation, and analysis of business models, processes, and operations. Performance management is seen as the next generation of business intelligence that will help propel business growth and development. Through this, governments can be able to utilize financial, human, and other resources effectively to achieve short and long term organization goals and objectives.

Validity and Functionality of Performance Management

Performance management systems have been implemented in public, non-profit, and governmental organizations. At the same time, there is an argument on the existing gaps between the expected and the actual outcome. To reduce the gaps, there is a need to implement systems that meet specific standards of validity and functionality. Validity is the degree to which a measure assesses what is to be measured with the significant aspect being content validity (Streib & Poister, 1999). It can be improved by pursuing the most effective practice that can help improve the overall functionality of the organization. When assessing the element of validity, there is a need to formulate items that extend beyond the normal attributes of performance measure as would be expected within the normal definition of measurement validity. Functionality involves the activities and outputs consolidated to meet the organization's goals. Performance management can highlight a specific area of an organization, such as the processes, employees, or even a single department. The functionality of the performance management systems leads to the development of the organization and ought not to contradict the expected goals and organizational objectives. Effective performance management in an organization will facilitate the creation of clear performance expectations where the employees can understand what is expected in the organization (Yang & Holzer, 2006). To the top management, it helps reinforce accountability to achieve the set goals and evaluate the performance for the employees.

Performance Measurement in the Public Sector, Nonprofit Sector, and Government

Other than the private business sector, the public and non-profit organizations operate without the discipline of market compensation. For this reason, performance measurement has continually been used as a substitute for market demands. The change is further controlled by the desire to include costs and improve efficiency within the public sector (Verbeeten, 2008). A paradox arises in the sense that even though the need for performance measurement is important, the nature of different public and government services makes it difficult to apply. There is a need to enrich performance measurement to serve as a collaborative process that involves both the government and the citizens. Besides, it can degenerate to a managerial activity for control purposes rather than being a tool to enhance governance within the government entities.

There has been an emphasis on developing performance measurement systems that include both the financial and non-financial measures. As a result, different frameworks have been created to allow organizations to assess performance through data collections better. The balanced scorecard, for instance, can be used to assess how non-profit organizations add value to the community (Soysa, Jayamaha & Grigg, 2017). It measures the impact of the organization's stated objectives and activities and the achieved results. When there is an alignment between all the components, there is a value-added.

Conclusion

Performance management has received significant attention in the business world because it focuses on the achievement of an organization with regard to the set goals. It includes the outcomes attained by the organization through the contribution of the individual or team members. The concept involves economic and behavioral expectation which plays a critical role in the workforce capacity building and the effectiveness of any company. The element of validity in performance management includes the need to formulate items that extend beyond the normal attributes of performance measure. The functionality of the performance management systems facilitates the development of an organization. When there is effective performance management in place, there are clear performance expectations, which ultimately helps employees understand what is expected.

References

Privett, N. A. (2012). Operations management in community-based non-profit organizations. In Community-Based Operations Research (pp. 67-95). Springer, New York, NY. https://doi.org/10.1007/978-1-4614-0806-2_3

Soysa, I., Jayamaha, N., & Grigg, N. (2017). Validating the balanced scorecard framework for non-profit organizations: an empirical study involving Australasian healthcare. Total Quality Management & Business Excellence, 30(9-10), 1005-1025. Doi: 10.1080/14783363.2017.1345620

Streib, G. D., & Poister, T. H. (1999). Assessing the validity, legitimacy, and functionality of performance measurement systems in municipal governments. The American Review of Public Administration, 29(2), 107-123. https://doi.org/10.1177%2F02750749922064300

Verbeeten, F. (2008). Performance management practices in public sector organizations. Accounting, Auditing & Accountability Journal, 21(3), 427-454. Doi: 10.1108/09513570810863996

Yang, K., & Holzer, M. (2006). The performance-trust link: Implications for performance measurement. Public Administration Review, 66(1), 114-126. https://doi.org/10.1111/j.1540-6210.2006.00560.x