How the manager views productivity

Consequently, the manager should consider who is likely to want performance data and the purposes for which they are likely to use it.
Natural constituents for performance information about state and local governments include planners, budgeters, employees, clients, public interest groups, legislators, and chief executives, as well as agency heads and program managers. Constituents will probably demand whatever data the performance measurement system produces. If the performance dimensions measured are limited to those of greatest interest to a couple of these groups--agency heads and program managers, for example--the information provided probably will not adequately answer some questions other groups ask about program performance.

The competitive edge of modern-day business emerges from creation or discovery of a performance management. A system that increases efficiency, decreases cost or enhances quality confers immediate competitive advantage on its creator and sets a standard for the rest of the industry to follow. But once disseminated across the field of competition, it becomes the standard. Now a new, yet more innovative, high performance system must be discovered that once more creates competitive advantage for its inventors.

As public-sector productivity gets increasing national attention, state and local governments seek more ways of improving their performance. Performance measurement systems may be helpful tools for improving both productivity and accountability. This paper identifies issues that governments should consider before implementing a performance measurement system.