Productivity measurement and management in large public service organizations

Abstract

Productivity in public services is always a topical theme. There is a constant need to pay attention to maintaining and improving productivity. These pressures have increased due to many current challenges in the Finnish public sector. There are various ways to improve productivity at many levels of examination. Much of the existing research on the topic has been carried out at the macro level. This study examines productivity from the perspective of management in individual public departments and units. Measurement is seen as an essential tool supporting productivity improvement. The main aim of this research is to investigate the development of measurement systems supporting the productivity management of large public organizations. The research is loosely based on the commonly used phasing of developing performance measurement systems. It has two main research questions: 1) how can public service productivity be described as a phenomenon? 2) how can productivity management be supported by means of measurement? There are many research themes underlying this study, the most essential of which relates to public sector performance measurement and management. \n\nThis dissertation, as a whole, can be characterized as a qualitative multiple case study. It is based on six research articles applying various research methods. Interviews, action research and a statistical study were the main methods. The empirical context is the City of Helsinki, Finland, which is a large municipal organization providing and arranging a wide range of public services. The research questions are examined organizationally at the top (e.g. municipal department) and bottom (e.g. unit providing a specific service) levels. However, the main emphasis is in the operative level examination, which is carried out in the context of social services. \n\nThe main contribution of this research relates to the description of a bottom-up measurement approach supporting productivity management in large public organizations. The main idea is first to develop appropriate component measures for the operative level, after which the results from each measure can be aggregated for purposes of top-level decision-making. The choice of this approach is supported by the existing literature and prior experiences from practice. The initial experiences of the approach are positive in the organization studied. No prior studies describing empirical application of similar approach were found in the literature. Other contributions of this research relate to two issues. First, new knowledge is provided on the productivity phenomenon in the context of public services. A new model for the comprehensive examination of factors affecting productivity is presented. Second, this study contributes to the existing research by describing the process of developing a measurement system in an interesting specific setting. Two key factors affecting the success of the development process are identified: the commitment of the operative level and the suitability of the measurement system for the requirements of the organization.

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