Factors Influencing the Use of Performance Information for Decision Making Essay

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Performance measurement is an increasingly important process in today's organisations. This is true for not only business or private sector organisations, but also public sector organisations. Against the backdrop of budgetary constraints and the need for guaranteeing the effectiveness of public programs, performance data is crucial for decision making in the public sector. From the health and education sectors to criminal justice agencies, government agencies and organisations are ever keener on outputs and outcomes. Performance measurement frameworks such as benchmarking and the balanced score card are now utilised to inform decision making. For instance, performance measurement enables the government to evaluate the effectiveness of a given policy or initiative. Based on the findings, decisions can then be made to expand or discontinue the initiative.



Given the unique characteristics of the public sector, it is imperative to understand the factors that drive the use of performance information in decision making. In her research, Taylor (n.d.) seeks to answer this fundamental question. She postulates a number of hypotheses. First, she hypothesizes that "the quality of an agency's performance measurement system is significantly related to its official's use of performance information for decision making." In other words, whether or not public sector organisations use performance information in decision making is dependent on the strength of the performance measurement system. How is the performance data useful and relevant to the organisation? How realistic are the performance targets? How frequently is performance measurement done? It is not difficult to agree with this hypothesis.

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In my view, it would be quite unrealistic to expect an organisation to use performance information in decision making if the performance measurement system is not rigorous enough in terms of relevance, practicability, and frequency.



The second hypothesis is that "rational and hierarchical organisational cultures in an agency are significantly related to its official's use of performance information for decision making more than group and developmental cultures" (Taylor, n.d.). Simply, whether or not an organisation uses performance information in decision making is a factor of the underlying organisational culture. The influence of organisational culture on organisational behaviour cannot be overemphasised. Organisational culture dictates how things in an organisation are done, including performance measurement. Therefore, an organisation that views performance measurement as part of its norms is more likely to use performance information in decision making than one that does not. For Taylor (n.d.), cultures that emphasise internal efficiency, productivity, and performance are more likely to use performance information in decision making compared to cultures preoccupied with employees, flexibility, and employees.



Taylor (n.d.) further hypothesizes that "stakeholder support for an agency's performance measurement system is significantly related to its officials' use of performance information for decision making." Any organisation is surrounded by various….....

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Reference

Taylor, J. (n.d.). Factors influencing the use of performance information for decision making in Australian state agencies. Public Administration.

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