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Management Studies

Volume 1, Number 1, December 2013 (Serial Number 1)

Contents

Human Resource Management

A Systemic-Integrative Leadership Model: The Case of Carbo Tech Composites GmbH 1

Herbert Glzner

Administration Management

Performance Measurement in Public Administrations: A Methodological Framework 14

Simone Lazzini, Vincenzo Zarone

CSR in Poland as an Important Foundation of Modern Society 27

Katarzyna Hys, Liliana Hawrysz

Educational Management

Educational Logistics and Entrepreneurial Success in Higher Education 34

Pannarat Wansavatkul Kadish, Ruja Pholsward

Information Management

A Decision Theoretic Model for Information Technology 47

Ramesh Babu Paramkusham

Management Studies, ISSN 2328-2185 December 2013, Vol. 1, No. 1, 1-13

A Systemic-Integrative Leadership Model: The

Case of Carbo Tech Composites GmbH

Herbert Glzner Salzburg University of Applied Sciences, Puch/Salzburg, Austria

How can leaders, employees, and organizations learn and develop fast enough to deal with accelerating complexity

in a global world and with ongoing economic changes, in order to provide long-term high-level employee

performance, which is the central goal of leadership? This study proposes a systemic integrated leadership model

that combines leadership, organizational learning, and organizational development. The starting points are the

following questions: How can long-term high-level employee performance be developed and what are the key

influencing factors? To this end a new systemic-integrative leadership model has been developed. In this model,

three influencing factors at the system levels, namely, organization/structure, team, and self-management, and three

influencing factors at the process level, namely, communication, vision/purpose and trust and control, all derived

from systems theory, have been established, all of which are understood to enhance performance. The Austrian

company Carbo Tech Composites GmbH is being used as a case to demonstrate how the systemic-integrative

leadership model can be implemented in an organization, in order to meet company challenges and enhance

long-term performance. To this end a three-stage implementation process was defined. First, the methodology of

in-depth interview was applied in order to get an overview of the organizations current situation, interdependencies

and their underlying explanations. Secondly, having analyzed the data collected from the in-depth interviews, the

results were reported to and discussed by the executives of the company. In order to reach agreement about the

objectives and the measures required to optimize long-term performance for this company in its specific situation,

the intervention method of open space technology was selected. Through an open space intervention, measures to

optimize the six performance influencing factors were elaborated and agreed upon as binding.

Keywords: systemic leadership, organizational change, change leadership, leadership, self-management, trust,

performance, structure, vision, team, system, process, organization, communication

Introduction The process of performance can be seen from the point of view of efficiency and effectiveness. Both are

important for high-level performance. A long-term study conducted by Czipin Consulting (2013) about labor productivity of employees has shown that 87 (out of 225) workdays per year are spent unproductively. A total of 80 inefficient workdays can be attributed to deficient leadership. Furthermore, it is not clear to what extent the remaining 60 percent of work input produces goal-oriented output. High-level performance is frequently

Herbert Glzner, Dr., Professor, Department Head of Human Resource Management & Leadership, Business Administration, Salzburg University of Applied Sciences.

Correspondence concerning this article should be addressed to Herbert Glzner, Salzburg University of Applied Sciences, Urstein Sued 1, 5412 Puch/Salzburg, Austria. E-mail: [email protected].

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THE CASE OF CARBO TECH COMPOSITES GMBH

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prevented in companies, amongst other things by inadequate structures and processes, unclear objectives, inadequate communication, and motivation deficits. To deal with the accelerating complexity in a global world and the ongoing economic changes, individual measures for better long-term high-level performance often do not bring the desired result. They do not capture the network of relevant factors, interrelation between cause and effect and the learning and development necessity of employees, leaders, and the organization. Therefore, a broader approach seems to be necessary to view the phenomenon performance, an approach which considers different effects, interdependences, and counteractions at different levels of a system, which is the approach of systems theory.

Scientific Approach This paper is based on the social sciences systems theory. The social sciences systems theory does not

represent a consistent theory framework, but different approaches. This paper refers to the systematic theoretical-cybernetic approach of Niklas Luhmann.

A fundamental starting point of systems theory is the reduction of complexity. In order to reduce complexity, systems are introduced. The task of such a system is to stabilize differences in complexity.

The environment of every system is much more complex than the system itself, no matter how complexity is operationalized. There is a complexity difference between the environment and the system. Accordingly, every relation between system and environment has a dual reference with regard to complexity. Such a relation links selected elements of the environment with selected elements of the system; therefore it bears the selection risk twice: it might misjudge risks or opportunities of the environment and might not find the right positions or resources inside the system. (Luhmann, 1980, p. 1067)

Due to the distinction between system and environment functional differentiation is made (Fuchs, 1993). A system distinguishes between inside and outside so that a system/environment difference is established. The initial system functions as the environment of the subsystem. The system and the environment again form together the initial system. Subsystems, which consist of communication, differ according to their reference. There is no solution with regard to defining the valid and true unity of a system or a subsystem. Everything that has a distinction between inside and outside can be called a system, because to the extent an order is established or consolidated, distinctive boundaries have to be drawn (Luhmann, 1964, p. 24). At this point, the term autopoiesis becomes relevant.

Autopoiesis literally means self-production. Autopoiesis implies that the unity of the system, including all elements it consists of, is produced by the system itself (Luhmann, 1990, p. 30). However, autopoiesis does not mean that the system just exists due to its own energy without any contribution of the environment or any relation to it. Indeed, the environment provides the necessary stimuli which convert the elements of the system into vibrations. Those vibrations are the basis for the self-production of the system, not the stimuli which cause the vibrations. Luhmann liked to tell the story about how the biologist Maturana was driven to develop the term autopoiesis (Horster, 2005): Maturana had dinner with a guest who was able to speak ancient Greek, but as Maturana was not, his guest made him aware of a Greek equivalent for his theory construct. Autos in Greek means self or alone and praktikos means to exercise an activity without developing an object, like playing a musical instrument. Poietikos, on the other hand, signifies to create or manufacture something so that an object is developed. Plato states on this subject that science is of triple nature (Horster, 2005): first practicing (practical), second manufacturing (poietic), and third considering (theoretic). As a result Maturana


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said that he had just found the term for his theory construct. From then on he used the nomenclature autopoietic system. The self-production of a system, or autopoiesis, thus means that a system has influence on itself and can act on its own initiative. In this process, there are different ways in which it can act. This leads to the term contingency.

Contingent is something that is neither necessary nor impossible, what can be like it is but can also be in another way (Luhmann, 1984, p. 152). Out of an unlimited amount of possibilities in a complex world, one action is chosen, but also another one could have been selected. This results in freedom of choice within the system, as well as in a starting point for many alternative actions. In other words, it provides many options for action. If contingency is doubled, double contingency emerges. This term is attributed to Parsons, who describes double contingency in the following way (Parsons & Shils, 1967):

There is a double contingency inherent in interaction. On the one hand, egos gratifications are contingent on his selection among available alternatives. But in turn, alters reaction will be contingent on egos selection and will result from a complementary selection on alters part. (p. 16)

One refers to double contingency when partners who are involved in social interaction are aware that the other knows that they act in a contingent way. Thus they could act differently than they actually do whilst each knowing that the other is aware of this and takes this into account.

A social system could be, for example, an organization, a group, a society.

Social systems do not consist of specific persons with heart and soul, but of specific actions. People areaccording to social sciencean action system that is linked by individual actions to various social systems, and as an individual system they are outside the particular social system. All people, even members, are therefore environment for the social system. (Luhmann, 1964, p. 24)

Organized social systems can be seen as systems which consist of decisions and are able to make those decisions by themselves. By decision it is not a psychological procedure which is meant communicationa social incident, and not a psychological incident, an internal awareness of self-assessment (Luhmann, 1984, p. 166). Therefore, social reality is designed communicatively.

From the theory of self-referential systems, social systems also carry out self-observation. From information which is gained by self-observation about internal changes, conclusions about the environment are drawn. Incidents are code-related. Therefore codes are of high importance. Processes outside the codes are not observed, no information about them is collected and no responsiveness or reaction is caused. The definition of the code, that is to say the reference system, determines what may find access into the system as well as the interaction among the particular subsystems.

The possibilitieshowever they are definedat the market are considerably more diverse than the measures actually realized and planned. Only those opportunities noticed can be taken (Exner, Knigswieser, & Titscher, 1987, p. 273).

As long as commercial enterprises are only governed by the financial code (literally only talk in the language of money) information about destruction of the environment or human suffering in developing countries, which do not concern payment, will not find access to the internal operations of the system! If there is no word for micro politics it cannot be officially recognized and treated. (Neuberger, 2002, p. 631)

Within the applied reference system that is within the codes, the categories meaning and values play important roles. In order to define what should be observed and perceived it is necessary to introduce the


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categories meaning and values. Meaning and values define the reference systems applied, or in other words the codes used.

Based on this, radical constructivism assumes that insight no longer concerns objective reality but exclusively order and organization of experiences in the world of our experience. In radical constructivism the composition of unconnected elements is brought about by active operation on the part of the person undergoing the experience. In this way, a certain design is created (organization and structure of the elements in relation to each other). Through this certain design a certain object emerges.

An important question for a system that produces and reproduces the elements it consists of by itself (thus representing an autopoietic system) is which elements produce and reproduce this system? A defined system may be able to produce and reproduce the elements a, b, c, for instance, or perhaps the elements x, y, z.

As a result of these observations, it can be stated that: l the importance of communication for the development of social reality; l the presence of functional differentiation, of autopoiesis, of contingency and double contingency, of

self-referentiality, of a reference system; l the question as to what elements a system produces and reproduces;

are important starting points for the basic structure of the systemic leadership model. The central question in the development of the systemic-integrative leadership model is: How can

long-term high-level performance be promoted within an organization? Leadership in this context is to promote the employees and executives:

l opportunity to perform; l ability to perform; l willingness to perform (Sprenger, 2010; Rosenstiel, 1995);

in order to optimize the performance of organizations. Leadership therefore means that a leader leads his co-worker, that a co-worker leads his leader, that

colleagues lead each other, and that an employee leads himself. These are the four directions of leadership: top-down, bottom-up, lateral, self-leadership (self-management).

From the statements made so far, the following can be concluded: l Communication has a central meaning for the development of social reality and it plays an important role

for the influence of long-term high-level performance; l A functional differentiation of system and subsystem is necessary, depending on the reference. In the

present paper, the reference is the promotion of long-term high level performance; l The elements of a system are able to produce and reproduce (autopoiesis) themselves and are therefore

able to promote or hinder performance; l A system influences itself and observes itself (self-referentiality). Thus, it is possible to have influence on

performance within a defined system; l Social systems are able to behave in a certain way. But they are also able to act in another way

(contingency) and even know that about each other (double contingency). That means the partners involved in a social interaction are able to act more or less in a way which promotes performance; l The reference system of a system determines what the system perceives and observes. This determines the

interaction of the system; l A question that comes up is: What elements does a system produce or reproduce? Are those elements


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long-term performance-promoting or performance-hindering? The implementation of a research process of applied sciences, in contrast to the fundamental sciences,

does not mean the enrichment of disciplinary knowledge with practical knowledge (Ulrich, 1982). The complexity of social systems and the non-linear connection implies that research on the application context cannot only be carried out by methods that are focused on natural law explanations, but include hermeneutic ideas about the understanding of human phenomenon (Ulrich, 1982, p. 9).

This leads to the demand for a variety of methods, which means that besides empirically oriented methods, nomothetic theory-concepts are needed (Lenk, Maring, & Fulda, 1985). In this way, systems thinking in contrast to analytic-linear thinking leads to a holistic, process-oriented, analytic, synthetic, interdisciplinary, and pragmatic research method.

Representatives of the systems theory justify their hypotheses based on logical formalisms rather than on empirical truth (Kornwachs, 1994; Churchman, 1981). The conclusions in the context of systems theory have a more descriptive, model-like, and less prognostic character; they rather ask themselves the question about the social benefit (Churchmann, 1981) and the relevance to problem-solving.

Development of the Systemic-Integrative Leadership Model As the first step in developing the systemic-integrative leadership model, systems and subsystems have to

be defined. Boundary criteria are different levels of complexity with reference to promotion of long-term performance.

This leads to five system levels: the environment, the whole organization, the team, the dyad leaderco-worker, and the system human being or co-worker.

It is of particular interest to describe the influencing factors and their effects which can be influenced within an organization. The outer system, the initial system, represents the whole organization. Everything going beyond that, the environment is outside and the overall organization is inside. Even though the environment represents a substantial influence factor for an organization, it can hardly be influenced by the organization to promote long-term performance to a high level. Due to this reason the whole organization is defined as the initial system.

The subsystem leaderco-worker on the one hand represents a special form of the subsystem team, but on the other hand it does consist of specific actions of the subsystem human being. The subsystem leaderco-worker consists of aspects of the subsystem team as well as the subsystem human being and therefore it does not form a separate system in this approach. Based on these considerations the following three system levels are defined: l whole organization; l team; l human being.

The question as to how long-term performance can be promoted to a high-level at whole organization level can be seen as a question of organizational structure, culture, politics, and learning. These four components represent the comprehensive term organization in this model. For a better understanding the term organization/structure for the system, whole organization was chosen.

The subsystem human being is of interest concerning self-leadership or self management in order to promote long-term high-level performance.


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Based on these considerations the following influencing factors occur at system level: l organization/structure; l team; l self-management.

At the process level, as already described, the following conditions influence the promotion of performance: l Communication is of central significance for the creation of social reality and plays an important role in

the promotion of performance; l The reference system of a system determines what the system perceives and observes whereby the

interaction of the system is defined; l A question that comes up is: Which elements does a system produce or reproduce? Do those elements

promote or hinder long-term performance at a high level? As outlined previously, the reference system of a system determines what the system perceives and

observes and in this way the interaction of the systems, too. In other words, the term vision/purpose can be used for the term reference system.

The last question mentioned, to what extent do elements produced and reproduced promote (or hinder) long-term performance at a high level, refers to the accelerating complexity in a global world. Therefore high autonomy and high flexibility of employees are important. Consequently, the culture of trust is a central requirement to a company. Trust is a process result. A question that comes up automatically is: Where does justified trust end and where does blind trust begin? This question might also be: Where, for reasons of logic, does trust end and control begin?

Trust and control are terms that are closely linked. The component trust was therefore extended to the term trust and control.

As a result, at process level the following components concerning promotion of performance can be defined: l communication; l vision/purpose; l trust and control.

The three influencing factors at system level and the three influencing factors at process level conclude the six influencing factors of the systemic-integrative leadership model to promote long-term high-level performance. To express it in other terms, these six influencing factors are crucial to the optimization of work efficiency and effectiveness, are systemic, as from the scientific theoretical point of view the influencing factors are derived from the systems theory, are integrative, as representative of a holistic leadership model involving the organization as a whole. Figure 1 shows the six influencing factors which are interrelated.

Description of the Systemic-Integrative Leadership Models Influencing Factors An organization is confronted with different demands, such as the carrying out of a certain order in due time

or the meeting of legal requirements. Depending on how these demands (input) are dealt with in considering the six influencing factors (throughput), a more or less purpose and goal-oriented output emerges. This determines the corporate success. The six influencing factors that affect job performance and as a consequence work efficiency and effectiveness within an organization are explained in the following paragraphs.


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Figure 1. The systemic-integrative leadership model.

Vision/Purpose A vision can be defined as an image of the future, which creates enthusiasm. As opposed to this, purpose

answers the question What for? The link between vision and purpose is established by values (Frankl, 2006). These three componentsvision, purpose, and valuesdescribe an organizations orientation in the long run and generate motivation of employees. If frustration prevails among employees, one reason is probably based on this influencing factor.

Organization/Structure Who is deciding that? How clearly are tasks distributed? How many rules does the organization have and

how detailed are they? How are departments and teams coordinated? The answer to these questions determines if employees have many or only a few possibilities for initiating innovations? Are employee innovations important or not? Organization and structure have an impact on the opportunity of employees to perform at a high-level. If an organization operates well, there will be clarity, redundancy can be avoided, and an organizational decision vacuum will not emerge.

Communication Is there precise, authentic and open communication or does contradictory communication often occur

(Schulz von Thun, 2010)? How are conflicts dealt with? Communication is the basis for decisions. The quality and quantity of communication determines actions and decisions.

Trust/Control How does the organization deal with decision power and authority? Are self-responsibility and trust

among employees promoted or not? To what extent is trust possible, and where is control useful and necessary (Sprenger, 2010; Malik, 2013)?

Purpose/ Vision

Organization/ Structure

Communication

Trust/ Control

Team

Self-management

Input

Output Success


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Teams Teamwork complements different capabilities, skills, and experiences of employees in order to reach a

certain goal. Which tasks in an organization are appropriate for individual work, which ones are appropriate for teamwork (Malik, 1998)? The composition of the team and the power of decision within the team are essential aspects of successful teamwork.

Self-management To fill the space afforded by actions and decisions proactively and to take self-responsibility is important

in the process of performance (Covey, 2000). Efficient and effective work is crucial to this process. These six influencing factors are interdependent. Depending on the specific situation of an organization,

different specifications of these factors will generate long-term high-level performance. Therefore, it is essential to find out to what extent the different factors impede or promote long-term high-level performance. If these six influencing factors are matched to each other in the best possible way and developed, long-term performance will be at a high-level and efficiency and effectiveness of work will increase significantly.

Implementation of the Systemic-Integrative Leadership Model The Case of Carbo Tech Composites GmbH

Carbo Tech Composites GmbH is based in Salzburg and is a manufacturer of carbon fibre components. These extremely resilient, very lightweight, and expensive components are primarily used in the motor sports and aviation industries. Rapid action and flexibility are key success factors for this organization. Fast growth over recent years and the commencement of series production in addition to single-part production have provided new intra-corporate challenges. To meet these challenges through long-term high-level performance, the systemic-integrative leadership model should be implemented. At the beginning, three assumptions were defined. Firstly, a representative overview of the actual situation (diagnosis) of the six influencing factors which have an impact on the efficiency and effectiveness of work, and their mode of effect within the company should be given. Secondly, measures of intervention should be agreed upon and realized in the long run by all members of the organization. Thirdly, the necessary expenditure of time should be low and the time frame short.

Methodology and Course of Action Based on those assumptions a three-stage implementation process was defined. A representative overview

of the organizations situation, interdependencies, and their underlying explanations is essential to meeting the challenge of the first assumption, hence the methodology of in-depth interview was applied (Argyris, 1993). After analysis of the data collected from the in-depth interviews, the results would then be reported to executives. It is important to present the results in such a way that executives understand the background of the information, are encouraged to discuss different points of view and are able to draw a conclusion. In the process, influencing factors that impede or promote long-term performance and their mode of effect on efficiency and effectiveness of work should be revealed. Objectives and measures of intervention can only be useful if they are agreed upon and implemented by members of the organization. Therefore it was essential to choose a method that enables executives to elaborate and agree upon measures self-responsibly. For this purpose, the procedure of the open-space method (Owen, 2008; Maleh, 2000) was selected. Measures for the optimization of the six influencing factors which have an impact on the long-term performance and therefore on the efficiency and


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effectiveness of work should be elaborated and agreed upon as binding at the open space event.

In-depth Interview In the case of Carbo Tech Composites GmbH selected executives and non-executives were asked two

opening question per influencing factor. The first questions concerning vision and purpose were, for example: Does the company have a perception of where it wants to be in five years? Is this in accordance with your personal vision? and Does the company have a mission-statement or vision-statement? Is it deep-rooted within the company or not?.

At the end of each question the interviewee recorded his/her personal estimation, based on a scale of zero to six (zero = not existing, six = very strong, clear, and consistent). The strongest scale value (six) is not necessarily the best and most desirable value but can be estimated as one of two extreme values in the same way as zero. For instance, it is not necessarily desirable that control is very strong (six). Figure 2 shows the average scale-values of employees and executives and their differences. At Carbo Tech Composites GmbH, the scale-values of employees and executives noted were surprisingly similar. It was interesting that employees perceived existing behavioral guidelines as less strong than executives did. Openness in resolving conflicts and trust in each other was perceived more strongly by employees than by executives. Employees viewed their self-management abilities less than executives did. To react flexibly to customer requests, the low scale-value of behavioral guidelines at Carbo Tech Composites GmbH may be important for single-part production. However, higher behavioral guidelines with regard to series production are advisable. It can be assumed that quality and trust in each other are less necessary in series production than they are in single-part production.

Executives Meeting The results of the in-depth interviews were presented and reflected in great detail at the executives

meeting. The meeting, to which all executives of the organization were invited, started with the presentation of the average scale-values differentiated between executives and employees. Although the scale-values are not representative, it was useful for the executives to have an orientation and starting point for a discussion of the qualitative data. After the presentation of the qualitative information there was a discussion about the statements and about the extent to which contradictions and friction losses appear that influence employee performance in a negative way. The results of the in-depth interviews were reflected with a view to their practical consequences for the company.

At the end of the meeting the executives elaborated possible approaches for the optimization of organizational effectiveness and efficiency and the promotion of promote long-term high-level performance. The following possible actions were recorded: l enforce training courses; l strengthen executive authority; l more information and a better flow; l different structuring of series and single-part production; l written vision statement; l training courses for executives.

Through intense dialogue and discussions at the executives meeting, new viewpoints and insights emerged. The chief executive officer (CEO), for example, expressed his surprise about the fact that employees fear for their jobs despite the high intensity of work arising from ad hoc requests for single-part production.


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Therefore the extension of series production represents a safety factor for those employees. The outcome of this was the written vision statement.

Figure 2. Results of in-depth interviews with executives and employees.

Results of in-depth interviews with executives and employees

Average values

1. Vision/Purpose Environmental groups

very instable very stable

Vision/purpose not existing strong, clear and consistently existent

Employees Executives

2. Organization/Structure Very inflexible, Very flexible,

little room for maneuver large room for maneuver

Common code of conduct Marginally or not existing Very pronounced

3. CommunicationQuantity very low High communication level

Quality hidden Open, conflicts are resolved constructively

4. Trust/Monitoring Trust among each other is

not existing very high

No monitoring very high

5. TeamQuantity

Only individual work only teamwork

Quality circumstances that prevent performance circumstances that promote performance

Required of most employees not highly highly

Applied by most employeesnot highly highly

0 1 2 3 4 5 6

6. Self-management


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Open-Space Workshop All executives of the organization were invited to an open space workshop. The guiding theme was: How

are we able to reach the optimum of both working efficiency and effectiveness at Carbo Tech?. Every participant had the possibility to bring in sub-themes. All in all, 12 themes were elaborated in three parallel and four sequential workshops. Every workshop was provided with one notebook so that 12 records were compiled. After the participants had read through the records at the beginning of the second day, four implementation projects, human resources (training, motivation, leadership, commitment), vision and objectives, potential for improvement, and information flow and documentation were defined. Within two parallel and two sequential implementation groups, a list of measures was elaborated for each implementation project. Afterwards these results were presented in the large group. The open space workshop closed with either a binding agreement on, or postponement of the elaborated measures.

Post-processing and Performance Review Two weeks after the open space workshop a meeting of the board of directors and the planning team took

place, in which the process was reviewed. The following was recorded: l Central success factor for the achievement of this process is the consequent implementation of agreed

measures; l The process was an important experience for executives concerning mobilization of employee potential

(i.e., potential of executives), creativity of executives, and decentralization of responsibility towards the next management level; l Executives were intensely involved in the elaboration of the themes; l The process strengthened the executives in their leadership position; l Very different viewpoints, which the members were not aware of before, were explained within the

process; l The perception of the participants about the companys success factors in the long run has partly changed; l The many different perceptions and the creativity of participants were surprising; l Some participants in the process have changed their behavior through changed perceptions and

self-reflection. After the post-processing meeting, an informative meeting for all employees was conducted. At this

meeting the board of directors presented the results of this project. Half a year after the three-stage implementation process of the systemic-integrative leadership model at

Carbo Tech Composites GmbH an external monitoring of the measures agreed on was conducted. This showed that some of the elaborated activities for optimizing work efficiency and effectiveness were no longer adequate or had not yet been realized. About 80 percent of the agreed activities were able to be implemented successfully.

Conclusions and Managerial Implications Using the approach of systems theory, the systemic-integrative leadership model with six influencing

factors to promote long-term performance on a high level was developed and its implementation demonstrated at Carbo Tech Composites GmbH. Through this procedure the following conclusions and managerial implications can be stated:


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l Acceleration complexity in a global world also needs complexity in an intervention process of an organization to promote long-term performance. The approach of systems theory seems to be useful. Individual measures for better performance often do not bring the desired result; l Leadership cannot be seen only as a dyad between leader and co-worker, in order to fulfill its tasks.

Through the use of a broader approach leadership, organizational learning and organizational development are bound close together and cannot be seen as separate issues; l The focus of systemic leadership shifts from a top-down only approach to a four direction approach:

top-down, bottom-up, lateral, and self-management; l It is important to analyze the key influencing factors of long-term high-level performance of a company,

their interdependencies and reflected actions on the part of executives and co-workers in order to root actions deeply within the company; l It is necessary to use intervention methods which mobilize employees and promote self-responsibility,

changes of perception and self-reflection, in order to deal with accelerating complexity.

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Management Center St. Gallen, St. Gallen. Covey, S. R. (2000). Seven habits of highly effective people. Philadelphia, Pennsylvania: Running Press Miniature Editions. Czipin Consulting. (2013). Productivity study 2013 (Produktivittsstudie 2013). Retrieved October 31, 2013, from

http://www.lebensart.at/images/doku/produktivitaetsstudiecerclefeb13v12.pdf. Exner, A., Knigswieser, R., & Titscher, S. (1987). Management consultingSystemic (UnternehmensberatungSystemisch).

Die Betriebswirtschaft, 47, 265-284. Frankl, V. E. (2006). Mans search for meaning. Boston: Beacon Press. Fuchs, P. (1993). Niklas LuhmannObeserved: An introduction in the systems theory (Niklas LuhmannBeobachtet: eine

Einfhrung in die Systemtheorie). Opladen: Westdeutscher Verlag. Horster, D. (2005). Niklas Luhmann. Mnchen: Beck. Kornwachs, K. (1994). Systems theory an instrument of interdisciplinarity? (Systemtheorie als Instrument der

Interdisziplinaritt?). Spektrum, 9, 117-121. Lenk, H., Maring, M., & Fulda, E. (1985). Epistemological aspects of applied systems theory in business administration

(Wissenschaftstheoretische Aspekte einer anwendungsorientierten systemtheoretischen Betriebswirtschaftslehre). In G. J. B. Probst, & H. Siegwart (Eds.), Integrated management: Elements of system-orientated management (Integriertes management: Bausteine des systemorientierten managements) (pp. 165-178). Bern: Haupt.

Luhmann, N. (1964). Funktions and effects of formal organizations (Funktionen und Folgen formaler Organisation). Berlin: Duncker & Humblot.

Luhmann, N. (1980). Complexity (Komplexitt). In E. Grochla (Ed.), Lexicon of organiziation (Handwrterbuch der Organisation) (pp. 1064-1070). Poeschel.

Luhmann, N. (1984). Social systems (Soziale Systeme). Frankfurt/Main: Suhrkamp. Luhmann, N. (1990). Ecological communication: Is adjustment for a modern society because of ecological threats possible?

(kologische Kommunikation: Kann die moderne Gesellschaft sich auf kologische Gefhrdung einstellen?). Opladen: Westdeutscher Verlag.

Maleh, C. (2000). Open space: Effective work through large groups (Open space: Effektiv arbeiten mit groen Gruppen). Weinheim: Beltz.

Malik, F. (1998). The mythos of teams (Der Mythos von Teams). MoM-Letter, 7(98), 98-115. Malik, F. (2006). Management performing living: Effective management for a new era. Frankfurt/Main: Campus. Neuberger, O. (2002). To lead and be leded: Approaches, results and critics of leadership research (Fhren und fhren lassen:

Anstze, Ergebnisse und Kritik der Fhrungsforschung). Stuttgart: Lucius & Lucius.


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Owen, H. (2008). Open space technology: A users guide. San Francisco: Berrett-Koehler. Parsons, T., & Shils, E. A. (1967). Toward a general theory of actions. Harvard: Harvard University Press. Rosenstiel, L. V. (1995). Leadership at performance reluctance (Fhrung bei Leistungszurckhaltung). In A. Kieser, G. Reber, &

R. Wunderer (Eds.), Lexicon of leadership (Handwrterbuch der Fhrung) (pp. 1431-1442). Poeschel. Schulz von Thun, F. (2010). Talk together 1. disorders and clearancesGeneral psychology of communication (Miteinander

Reden 1. Strungen und KlrungenAllgemeine Psychologie der Kommunikation). Reinbek: Rowohlt. Sprenger, R. K. (2007). Trust: The best way to manage. Frankfurt/Main: Campus. Sprenger, R. K. (2010). Mythos motivation: Ways out of the dead-end (Mythos motivation: Wege aus einer Sackgasse).

Frankfurt/Main: Campus. Ulrich, H. (1982). Applied science (Anwendungsorientierte Wissenschaft). Die Unternehmung, 36(2), 1-10.

Management Studies, ISSN 2328-2185 December 2013, Vol. 1, No. 1, 14-26

Performance Measurement in Public Administrations:

A Methodological Framework

Simone Lazzini, Vincenzo Zarone University of Pisa, Pisa, Italy

This paper is intended to give a contribution to the debate on the measurement of performance in public

administrations, proposing a methodology aimed at reconciling the high structural complexity of some specific

types of public administrations with the requirements of measuring the efficiency of their administrative action. The

study is focused on the specificities of some peculiar entities characterized by special distinguishing features, such

as a poor capacity to standardize processes, the use of specialist skills provided with a high level of autonomy, and

a marked problem-solving attitude, and an organizational structure characterized by the expansion of the support

and staff functions. The proposed methodology deals with the assignment of resources to the activities implemented

in the structures, resulting in a system intended to weigh outputs as the expression of the effort connected with their

achievement, as well as of their potential correlation with the institutional objectives of the administrations, thus

linking the current dimension to the multi-year dimension. The assumptions of such an approach stem from the

awareness that, in providing public services, the problem to measure outcomes, and therefore the public value

generated, seems to be still topical and perhaps still far from being completely resolved. However, a

quali-quantitative methodology is proposed to extend a consistent measurement model to all the organizational

structures without debasing their different functions and simultaneously ensuring a unitary evaluation metrics. The

main criticality of the methodology consists, on the one hand, in the need to accurately define the items to be

considered as outputs and those that should not and, on the other hand, in the definition of a closed taxonomy of

outputs for each organizational structure in order to outline the individual discretion in identifying outputs, so as to

prevent their excessive parcelling out from undermining the density and reliability of the measurement.

Keywords: performance measurement, public management, methodology for performance measurement, complex

public administrations

The Assumptions and Purposes of the Research The measurability of the performance of public administrations has always caused a great deal of

perplexity, initially on a logical and conceptual level, and then from the point of view of strict application. As regards the former aspect, the difficulty of achieving a fair measurement of public value, intended as the result of the harmonic combination of efficient administrative action and the qualitative attitude of performance in addressing needs, has reduced the evaluation effort in the awareness of the many facets to be considered.

Simone Lazzini, Ph.D., Associate Professor, Department of Economics and Management, University of Pisa. Vincenzo Zarone, Ph.D., Research Fellow, Department of Economics and Management, University of Pisa. Correspondence concerning this article should be addressed to Simone Lazzini, Department of via C. Ridolfi, 1, Pisa, Italy.

E-mail: [email protected].

DAVID PUBLISHING

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PERFORMANCE MEASUREMENT IN PUBLIC ADMINISTRATIONS

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As to application, the need to conceive performance evaluation systems that do not consider only profit/loss results, but rather include the perception of the social usefulness of political-administrative action, made it extremely complex to define measures that could really evoke the phenomena to be investigated. In other words, the use of resources with an economic value should be considered in connection with the results obtained, not all of which can be captured by monetary metrics because they are related with the fulfilment of needs and with the judgement of their global institutional usefulness.

A measurement system should therefore be capable of isolating that which is measurable through the semantics of numbers from that which can be perceived only through indirect determinations. The system used to evaluate the state and the other elective public bodies has increasingly appraised the significant political value for citizens by using the tools made available by the Constitution. But the political judgement (particularly if this could imply an actual penalty) must necessarily be pursued together with public value determination logics and models in business economics terms. This implies for public administrations the opportunity to develop methodologies and models for the measurement of the generated output as a function of resource consumption.

This paper will propose a methodology for the development of a performance measurement process for the different structures of a public service organization. It should, therefore, be included among non-prescriptive qualitative contributions aimed at injecting food for thought into the wide conceptual and methodological debate on the measurement and depiction of performance.

Taking its origin from the implementation-related problems highlighted by the numerous contributions offered by scholars and supported by the reports of the Independent Commission for the Evaluation, Integrity and Transparency of Public Administrations (Commissione Indipendente per la Valutazione, Integrit e Trasparenza delle amministrazioni pubbliche) (CIVIT) and by the Court of Audits report on the PA control system, the analysis further pushes the boundaries of the debate and focuses on those public bodies where it is particularly difficult to configure measurement processes due to their specific field of activity and for the peculiar intangible nature of the services provided. Hospitals, universities, national training schools, independent agencies, and authorities have an extremely complex range of activities, whose measurement appears to be equally complex and whose complexity stems primarily from the implications deriving from the contextual presence, in said organizations, of specific critical factors, such as:

a poor capacity to standardize processes; the need to use highly qualified personnel with special skills and a marked problem-solving attitude; the presence of an organizational structure characterized by the expansion of the support and staff

functions. The methodologies implemented by the administrations to introduce measurement systems have been

revealed to be still perfectible. In many administrations, the measurement and evaluation system is still strongly based on mere compliance with legal requirements and, in many cases, the factual significance of the instruments implemented still appears to be rather limited (De Brujin, 2007).

The assumption of our work originates from the identification of the requirements, in terms of measurement systems, that are being expressed by those public administrations whose elements of complexity seem to be more marked. Our intention is to suggest some methods to be used to meet those requirements. In general, the principles inspiring a performance management system should aim at:

allowing for an integrated and exhaustive measurement, assessment and, consequently, depiction of the


16

expected performance level (that which the administration is committed to pursue), as well as of the performance level that is actually delivered, and highlight any deviation (Del Bene, 2008; Rebora, 1999; Garlatti, 2004);

allowing for the identification of a few condensed criteria for an overall assessment of administration practices (Anselmi, 2003);

allowing for a continuous monitoring of the administrations performance, even to identify any corrective actions to be implemented during its activities (Anthony & Young, 1984);

assuring the technical requirements of validity, reliability, and functionality (Merchant & Van der Stede, 2003);

assuring the immediate and easy comprehension of the performance status by both internal players and external stakeholders of the administration (DAlessio, Vermiglio, & Virginillo, 2008);

promoting the simplification and integration of performance planning and reporting documents (Fowles, 1993; Marasca & Del Bene, 2009);

clearly defining the responsibilities of the different players concerning the definition of objectives and the related achievement of the expected and delivered performance (Beckhard & Harris, 1977);

assuring total transparency, with indication of the responsible parties (Pavan & Reginato, 2012). Traditionally, performance measurement tends to be permanently associated with the close examination of

the cost-effectiveness of the administrations. Within this framework, auditing cost-effectiveness is closely related with the processing of quantitative-monetary data, expressed in terms of earnings. However, the authorities recognize a limit to cost-effectiveness, as described above, in connection with public entities, where the absence of the price system as an effective signal of the created value sets clear limits to the use of the typical instruments of the techniques for the reporting of corporate facts in the examination of the degree of cost-effectiveness of the administration.

The criticality that has often ensued from this has been the triggering of a culture of measurement that frequently revolved only around easier monetary measurement elements, with the risk of neglecting all those componentsthat are not at all secondary, but rather essential and peculiarof public services, which, however, clash with the difficulty to be translated into figures (Jones & Pendlebury, 1996). But the challenge of measurement cannot be taken as a pretext to refrain from developing performance measurement and evaluation processes. The awareness of the hard task should lead to a careful consideration of the metrics used for that measurement and push towards an increasingly diverse range of methodologies fit for the features and peculiarities of each individual administration.

The picture described above highlights the need to continue along two closely related lines, one aimed at configuring the logical-functional architecture of the evaluation system in compliance with the requirements of the administration and the recent regulations, and the second concerning the development of an information system capable of really supporting the system at issue. A performance measurement system is not merely limited to identifying and measuring immediate results, i.e., the outcome of the administrative action, but rather detects the determinants of that same action and reviews its global impact. This puts forward the need to find performance measurement systems that investigate the relationships between the use of resources with an economic value and the results achieved, not all of which can be summarized by monetary metrics because they concern the fulfilment of needs and the judgement of the global usefulness of the institution. The article points out the need to use a logical system of tools that allow for the improvement and/or the investigation of the


17

economic effects of decisions and choices made. It is absolutely clear, in fact, that the configuration of the performance assessment system must be adapted to the specific context, as it cannot be detached from organizational, functional and process peculiarities and, in addition, it must be aimed at implementing tools for the support of the administrative action for the achievement of better and higher levels of efficiency and efficacy.

For these reasons, this paper will propose a methodology resulting from an approach based on the interpretation of public administrations, whose purpose is to integrate qualitative and quantitative elements for a global measurement of the administrative action implemented.

The Aspect of Complexity The administrations that are characterized by a high degree of complexity, due both to institutional and

context variables, and to peculiar internal procedures, include large-size hospitals, national training schools, and independent authorities.

At any rate, all the administrations the study referred to share a number of factors that define the level of complexity associated with their internal management system and the cognitive interest for research themes connected with performance measurement. These factors are primarily associated with the high professional level of the human resources used, with the complexity of the organizational structure whose responsibility is to ensure the effectiveness and efficiency of the entire range of duties, and with the significance of the institutional context where said administrations operate, which is deeply affectedif not directly regulatedby them.

The analysis of an architecture that is functional to the assessment system contemplateseven more in the contexts defined abovea joint examination of the players (the individuals and the progressive aggregation structures where they operate) and of the relationships that are created between them, which may be personal, intra-organizational, or inter-organizational kinds of relationships (Granovetter, 1973).

The complexity of intra-organizational governance may be depicted by using two variables: on the one hand, the degree of predictability of the activities to be carried out and, on the other hand, the degree of subdivision of the structures into subunits. The more the activities are difficult to predict, as they are affected by contingencies, the greater the need for a constant problem-solving effort, the coordination of individual actions and the reconfiguration of processes to respond to any emerging situation. Conversely, for the second variable, the intensity of coordination is reinforced in connection with the number of units that make up each structure. The higher the number of sub-structures, the greater the complexity connected with their governance, that is to say the need to establish a greater variety of tasks, set a system of responsibilities or introduce internal specialization processes (see Figure 1).

This approach would envisage the need to analyse organizational layouts by starting from the maximum level of disaggregation: the individual, observed from the point of view of his/her attributes (knowledge and competencies) and relational characteristics (membership in formal/informal social networks). However, the need to reach a unified synthesis of the organizational layout suggests the opportunity to focus on the structural size of the organization (Daft, 2004):

the specialization level of the structures; the centralization level of decisions; the professionalization of work;


18

the governance system; the amount of staff and resources; the formalization level of the system.

Figure 1. Determinants of the complexity of intra-organizational governance.

The organizational layout of said complex organizations is essentially described in the coordination mechanism proposed by Mintzberg (1979, 1992) as a model of professional bureaucracy, although it departs from it in some peculiar aspects. According to this model, the answer to complexity is not the standardization of processes, as in the mechanistic model, but rather the constant adequacy of the employees capacity to achieve the purposes of the institution. Activities, closely connected with primary functions, are placed in the hands of employees endowed with top-level skills, who have been selected by previously examining their specific qualifications.

The peculiar feature of this organizational approach is the high level of autonomy of the employee, who is allowed a wide field of discretion. This brings about a strong decentralization, both horizontally and vertically.

The conditions for the operation of professional bureaucracies are a core of solid knowledge that allow for the development of a problem-solving approach rather than pre-packaging solutions to be adapted to individual situations. Further typical traits can be identified in the expansion of support and staff activities, as well as in the direct contact with the reference user who, in some regards, plays the role of a sort of controller of the implemented activities (Moore, 1995).

The deep influence exercised by the institutional context and by national and international industry regulations for national training schools is a considerable distinguishing feature: in the case of large-size hospitals and authorities, they are associated to the high significance of the values to be protected and actually ratify (particularly in the case of authorities) the distinguishing feature of institutional independence. In the system of public bodies and units (Anselmi, 2003), these administrations are very complex entities because they are particularly exposed to the constant dynamism of the sectors under their influence and regulation, as well as to the instability of the scenarios where they carry out their activity.

In fact, the study of the level of complexity of a given administration refers to the action of two types of environmental forces: institutional and technical forces (see Figure 2).

Leve

l pre

dict

abili

ty o

f the

act

iviti

es (+)

(-)

Degree of complexity of the structure

(-) (+)


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Figure 2. Institutional and technical forces. Source: Adapted from Scott (1987, 1994).

The intensity of their action is deemed to be capable of inducing a lesser or greater degree of complexity to the administration by requesting increasing skills both as regards the structuring of processes and in connection with the continuous reconfiguration of organizational layouts. While technical forces usually dominate in contexts where competencies are discriminating feature, institutional forces prevail in the environments where administrations are called to fulfil a set of regulations and requirements to carry out their institutional activity.

The availability of performance assessment systems is essential to guide long-term strategies of the administration and constantly review the consistency between operations and the institutional purposes of the administration. The prevailing purpose is to impart a continuous pressure on the review of the alignment between present behaviours and the achievement of long-term objectives (Kaplan & Norton, 1992). In other words, there is a need for tools capable of managing complexity, unravel tangled situations and become real and effective supports to the making and implementation of decisions (Lazzini, 2004).

The requirements identified in the administrations considered can be summarized, in the first place, as the need to expand the focus on performance measurement by using tools for an analysis of strategic objectives and an assessment of their achievement by fruitfully connecting the different management dimensions with the different contributions provided by the structures.

In the second place, operational and organizational peculiarities require an important diversification of the methodologies used for the assessment of the efficiency of processes, which must take into consideration the quality of the output produced, the intensity of the resources absorbed, and the extensive discretionary content they expressed.

Current trends in many administrations seem to aim at developing multidimensional systems, where the qualitative dimension of the phenomena observed coexists with the traditional economic dimension.

Many tools can be abstractly used the balanced scorecard (Kaplan & Norton, 1992) or the performance prism (Neely, Adams, & Kennerley, 2002), for example, have obtained broad consensus among scholars, especially for the role they can play in improving decision-making processes. In many cases, however, the

Authority Hospital

National School of Public Service Training

Strong

Weak

Tech

nica

l env

iron

men

ts

Strong Weak Institutional environments


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challenge implied in the passage from their abstract potential to their concrete implementation has not seldom shown such operating limits and inadequacies as to create not a few perplexities concerning their actual usefulness. These tools fulfil the need to build a sophisticated control system, where the dimensions of the detection of administration facts, operating and strategic choices, and organizational functionalities find a profitable interaction.

The Conceptual Logic of the Model Every performance measurement system requires an accurate application in and adaptation to the

administration where it is used. One of the most significant aspects of any such system is not merely the evaluation of its potential usefulness, but its actual configuration and specific adaptation. The criticalities defined by scholars may be summarized as follows:

inadequacy of the information available for measurement requirements; difficulty to allocate costs to the individual organizational units; difficulty in identifying outputs and their related processes, particularly for administrative and corporate

functional activities; poor definition of the activities implemented; difficulty in defining and nourishing the system of indicators; excessive focus on forecasts and final considerations based on financial accounting.

In the light of these criticalities, the article suggests a methodology based on the principles and characteristics of the most sophisticated assessment tools, while simultaneously ensuring the necessary capacity to grasp specific peculiarities.

The goals of our evaluation process are: to determine the degree of achievement of institutional objectives; to measure performance in terms of administrative action; to implement an easy-flowing process to be integrated in the corporate information flow without being

invasive or redundant; to reinforce a control culture.

The organizational characteristics, the generated output and outcome, the intangible and discretionary nature of many activities, as well as the difficulty to measure them, all make it necessary not to focus the evaluation on the exclusive measurement of costs, but to extend the assessment metrics to include the comparison between the value absorbed and the value generated by activities.

The benefits derived from this approach can be summarized as the possibility to perform this analysis without having to use a cost allocation and accounting system with cost and responsibility centres, and have a unifying measurement criterion available that can be globally used in the different structures, as they have different governance layouts and use different types of resources.

The passage from the measurement of the cost per structure to the notion of value absorbed by the activities carried out in the structures allows us to isolate the weight of each individual process, correlate their intensity to the output produced, and finally express the contribution offered by the structures to the different administrative processes.

According to Porters (1985) original approach, the production of value by each individual entity is connected to the activities that are carried out within that entity.


21

Therefore, to examine the formation process of the created value, the different types of activities must necessarily be identified and isolated within the combination of:

primary activities, linked to the basic reasons of the existence of the institution; support activities, which ensure the global operation of the body.

The value chain is the expression of the individual activities that take place within the organization and, most of all, of the interrelation, integration, and coordination between and among individual activities. Each entity corresponds to one and only one value chain, which is, therefore, a peculiar and unique entity that represents the essential link between its constituents.

Porters notion of value chain leads to two considerations: the first is that the value generated by an organization stems from how its processes have been configured in the perspective that:

Each activity implemented has the purpose of producing value; Each activity is connected to at least another activity; Each activity absorbs resources and generated outputs.

The second consideration is that each administration has its own value chain, which is the utmost expression of its peculiarity and specificity. This requires the value chain to be adapted to the specific functions, processes, and activities that are carried out and combined in that administration.

The logical sequence includes the identification of the resources, their use for the activities (absorption), the definition and measurement of the generated outputs, and finally their correlation with the institutional objectives of the administration (see Figure 3).

Figure 3. Basic logic of the model.

The measurement method reflects the organizational structure and must therefore be subdivided into departments, divisions, units, and offices. As regards the first part of the model, which regards the allocation of resources to the activities, in consideration of the fact that, in many cases, it is not possible to directly allocate the standard cost of personnel to individual activities, and the suggested methodology solves the problem by assigning personnel in connection with the percentage absorbed by each activity, with a value determined based on the gross administration personnel cost. Then, each activity is allocated the amount borne for the forms of outsourcing used according to the flexible employment and/or service agreements/contracts signed with third parties.

The cost of personnel employed on a permanent basis and personnel coming from other public administrations and/or institutions and used in executive positions or on secondment basis or under any other legal framework allowing for the availability of professionals are allocated in a similar manner, based on a percentage per activity.

Measuring Outputs The second part of the model, which concerns the measurement of outputs, may be broken down into three

Input Activity Output

Input-output correlation


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sub-steps: the definition, classification, and weighing of the output. As regards the first step, two approaches may be identified: a finalist type of approach, which identifies

the output as the conclusion of a production process that is achieved on the basis of a number of different factors; and a second approach that identifies the final output as the result obtained by a chain of intermediate outputs (see Figure 4).

Figure 4. Basic approach to the notion of output.

The need to determine the value of the contribution of each player involved in the process against the output achieved made it appropriate to adopt this second approach. Output may be conceived as any factual and explainable element obtained as a result of specific contributions or activities or multiple activities, even differing from one another, teleologically connected with each other. The finalistic logic has been mitigated by the logic of the fractionability of the production process, and consequently, intermediate outputs will be possibly identified alongside with the single final result, provided that they can, in their turn, be identified as the final outcome of a process or sub-process that is connected, preparatory or functional to the main process.

This first distinction, however, is not sufficient to ensure the actual identification of all the outputs. In fact, although it is true that, as regards primary activities (cf. the value chain), the result obtained can be immediately perceived because it is the direct consequence of the institutional function of the body, the same distinction is not as applicable to the intermediate results generated by organizational units with accessory functions because they are ongoing activities, and this makes it difficult to determine their contribution. Abstractly speaking, in order to assess the output produced by the salary payment process, one might be induced to count each procedure individually, with the effect of triggering an excessive measurement process (the measurement paradox) (Guthrie, 2005), a condition that may involve the risk of missing the significance of the measurement, which would be invalidated by the excessive relative weight of micro-outputs against the total.

The opportunity to combine the visibility of the activities with an adequate degree of the density of the measurement may be preserved if the activities that are repeated on a regular and constant basis (e.g., payroll time reporting systems, calculation and payment of salaries and any other entitlement) were taken as reference on the whole, to describe a single periodic output connected to an activity that can be reiterated.

In the event of operations that are repeated without a specific time sequence or periodicity, the outputs produced may be identified not as individual operations, for the reasons specified above, but in connection with their unifying elements, to eventually proceed with a conventional enumeration on a periodic basis. After identifying the output, the subsequent logical step consists in establishing some categories of outputs depending on the generating structure, and then proceed to weighing the output.

Weighing becomes necessary because, without a differentiation mechanism, all the outputs would be enumerated homogeneously (one at a time) without considering a discriminant factor that is the consequence of the appreciation of the intrinsic complexity of the achievement of the specific output. This will trigger a

Intermediate output

Input Input

Output

Intermediate output

Output

Finalistic approach

Internal customer approach


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weighing mechanism of the different outputs whose purpose is not to enumerate each of them individually, but rather deal with them in terms of points that can be referred to them, so as to obtain an express differentiation implicit to the score itself. In other words, a qualitative variability must be introduced, which takes into consideration the differences among the outputs in connection with the intensity of activities connected with their implementation.

The weighing mechanism suggested is based on the use of explicative parameters, which, in their turn, can be broken down into attributes that qualify their assessment method. The methodology is based on the identification of qualifying parameters that express the intensity of the effort and the complexity required to obtain the output. In their turn, these parameters are explained by some attributes that drive the discretionary power of the assessor. A higher or lower weight will be assigned based on whether one or more attributes is (are) are identified. Assigning a numerical score to qualitative variables is always a very subjective process, so the uncertain nature of the assessment ends up by being confined to a defined range of variability.

The first parameter considered to be qualifying as a discriminant among outputs is problem-solving (see Table 1), i.e., the capacity to find solutions, which is measured from a qualitative point of view by using attributes associated with:

the professional skills required; the degree of discretion used; the ordinary or extra-ordinary nature of the issue considered.

Table 1 Problem-Solving Parameter Description of attributes Attribute intensity Score (weight) 1. Professional skills required High-Medium-Low Scale from 1 to n 2. Degree of discretion used High-Medium-Low Scale from 1 to n 3. Ordinary or extra-ordinary nature of issue considered High-Medium-Low Scale from 1 to n

The second parameter may be identified as the use of resources in connection with the achievement of the output (see Table 2). This parameter is measured by using relative attributes:

the intensity of intra-departmental coordination of the available resources; the degree of structuring of the procedures connected with the achievement of the output.

Table 2 Degree of Exploitation of Resources in Connection With Achievement of Output Parameter Description of attributes Attribute intensity Score (weight) 1. Intensity of intra-departmental coordination of available resources High-Medium-Low Scale from 1 to n

2. Degree of structuring of procedures connected with achievement of output High-Medium-Low Scale from 1 to n

The third parameter concerns inter-departmental coordination, because any organizational structure needs to use the contribution of other structures to achieve its output (see Table 3). An increasing score is assigned as a function of the intensity and number of the contributions received.


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Table 3 Inter-departmental Coordination Parameter Description of attributes Attribute intensity Score (weight) 1. Intensity of required contribution from other structures High-Medium-Low Scale from 1 to n

2. Number of required contributions from other structures High-Medium-Low Scale from 1 to n

The last parameter concerns time pressure that is the need to achieve the output within a short time for induced causes (see Table 4).

Table 4 Time Pressure Parameter Description of attributes Attribute intensity Score (weight) 1. Intensity of time pressure High-Medium-Low Scale from 1 to n

A relative score is assigned for the existence of this condition. The range of discretionary power in the configuration of the weighing metric is linked to the width of the range of the global score, which actually reflects the relative scale of incidence of the different outputs.

The performance measurement model is therefore based on the assignment of a value to the activities associated with their resulting outputs, within a process framework where the output itself reflects the magnitude of the effort made to achieve it. Finally, the outputs expressed in points can be correlated to the institutional objectives of the authority, thus expanding the reference horizon to the strategic dimension of management. Likert scales can be used to perform a conventional measurement of the value of an output, expressed in points, as they offer a consistent metric for all the outputs of the administration, those that derive from its core functions and those achieved by the support and staff functions. More specifically, this methodology measures the value absorbed by output-generating activities without a detection system based on cost centres and assigns each output a score, whose progressive aggregationat office, unit, division, and department levelallows for the measurement of the contribution of each individual structure to the overall result of the body. The construction of a system of indicators for the measurement of efficiency becomes extremely simple when one is in the condition to compose measures that express both the output (in conventional points) and the input expressed in monetary and non-monetary terms.

In other words, the development of administrative action can be monitored without confining that aspect to the sole dimension that stems from the general accounting system. In addition, this method supports strategic control processes and highlights the correlation existing between the outputs and the institutional objectives of the body. Finally, it offers the opportunity to compose a wide range of indicators that express the administrative action implemented.

Conclusions and Final Remarks This article should be seen in the wide framework of the methodologies for the measurement of

performance in public administrations. It contributes to the debate by suggesting a quali-quantitative method for the measurement of the inputs and outputs of the processes implemented in complex public administrations.


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A wide range of positions has been formulated on this theme in the scientific literature, toggling between two extreme concepts. The first extreme is based on the assumption that the performance of public administrations should be the expression of their capacity to generate public value. However, since this criterion cannot be measured by monetary metrics, any approximation would be misleading. Choosing the path of a forceful extension of financial indicators used to approximate public value would imply the risk of assessing easy-to-measure, although not primary, aspects, while missing the actual characteristics of the public service due to the intrinsic difficulty in translating that value into quantitative terms.

The second extreme pertains more to a rationalist line of thought and defines the performance of administrations as their attitude in managing public resources; as a consequence, the primary aspect to be measured, and the only one worthwhile appraising, is efficiency. Both positions lead to potentially harmful conclusions.

While the first position may lead to think that, being impossible to measure significant aspects, it would be better not to measure anything, the second, measuring only a partial aspect, may lead to an inversion of the relationship between means and purposes. Being a constraint, resources become the objective of the administrative action, and the true goalto fulfil a public needis reduced to a mere accident.

The mainstream of business economics doctrine has been trying to walk a middle way. Aware of the impossibility to appreciate the attitude to generate public value in monetary terms, it developed quali-quantitative methods that combine typically financial dimensions with, on the one hand, qualitative indicators expressing internal operating conditions and, on the other hand, methods to estimate the efficiency of the service. Many criticalities, anyhow, have emerged along these paths, including, inter alia, inadequacies associated with the availability of information for measurement requirements, the difficulty of allocating costs to individual organizational units, and the complication of identifying outputs in connection with corporate processes.

Starting from these requirements, this paper has proposed a methodology for the assignment of resources to the activities implemented in the structures and a system to weigh outputs as the expression of the effort connected with their achievement, as well as of their potential correlation with the institutional objectives of the administrations, thus linking the current dimension to the multi-year dimension.

The assumptions of such an approach stem from the awareness that, in providing public services, the problem to measure outcomes, and therefore the public value generated, seems to be still topical and perhaps still far from being completely resolved. However, a quali-quantitative method is proposed to extend a consistent measurement model to all the organizational structures without debasing their different functions and simultaneously ensuring a unitary evaluation metrics (conventional measurement through output scores).

The main criticality that can be identified in this method consists in the need to accurately define the items to be considered as outputs and those that should not. For the application of the method, researchers should first define a closed taxonomy of outputs for each organizational structure in order to outline the individual discretion in identifying outputs, so as to prevent their excessive parcelling out from undermining the density and reliability of the measurement.

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