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Measuring performance is a necessary management practice if action is to result in desired outcomes. An important objective of the New Zealand public sector reforms that started in the late 1980s, was to focus the attention of public servants on clear specified results rather than bureaucratic procedures. Based on an implicit assumption that all public sector organisations are of a production nature, the reforms promised greater efficiency within the public sector by holding managers accountable for results while providing them with greater freedom to allocate resources. Consequently, outputs became key performance measures to enhance the accountability structure and to improve efficiency of the public organizations. The development of performance measurements to date appears inadequate in that the most important component of results outcomes is overlooked from the measurement. Currently government departments in New Zealand are implementing the early stage of the Management for Outcomes initiative, with an aim of ensuring all public service departments adopt a more strategic and outcome-focused approach to management and reporting. This thesis studied the latest developments in using outputs as performance measures in two public organisations. The findings demonstrates that outputs do not indicate performance for a procedural or a coping organisation as output information may not be relevant, meaningful or useful. However the most significant risk is that just as in the past, reliance on outputs will continue to lead to the fragmentation of public services and the ineffective delivery of services that the Management for Outcomes initiative aims to overcome.
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