The Balanced Scorecard (BSC) is not only a measurement system, but is a management system that enables organizations to clarify their vision and strategy and translate them into action.
Traditionally, many local agencies have measured their organizational performance by focusing on internal or process performance, looking at factors such as the number of full-time equivalents allotted, the number of programs controlled by agency, or the size of programs controlled by the fiscal year.
The new measures “ balanced scorecard” give top agencies a fast but comprehensive view of an organization’s performance and includes both process and results measures,
For example, for the complex task of airplane evaluations, pilots need detailed information about fuel, air speed, altitude, bearing, and other indicators that summarize the current and predicted the environment.
Reliance on one instrument can be fatal. Similarly the complexity of managing an organization requires that managers be able to view performance in several areas simultaneously. A balanced scorecard measure provides that valuable information.
That measure can apply for performance evolution in local government.
We can take as an example GPRA (Government Performance and Results Act) of America
On the basic of BSC, Government Performance and Results Act is commonly known as GPRA, this legislation is the foundation of the most fundamental reform of the government in decades. For the first time, the agencies were mandated to become specifically results-oriented. Under GPRA, they are required to develop long-term Strategic Plans defining general goals and objectives for their programs, to develop Annual Performance Plans specifying measurable performance goals for all of the program activities in their budgets, and to publish an Annual Performance Report showing actual results compared to each annual performance goal.
The Annual Performance Plan goals should show the expected progress toward meeting the long-term goals of the Strategic Plan, and both plans must describe the strategies and various resources needed to meet their goals.
GPRA, in other words, began to shift the focus of agencies from simple accountability for process to accountability for results. In doing so, the legislation introduced an important new emphasis into federal performance measurement the need to identify desired outcomes.
The distinction between measuring program outputs (i.e., how much will be done?) and measuring actual outcomes (i.e., to what end result?) is fundamental to the ultimate accountability of Congress agencies for the effectiveness of the programs they create, fund and administer.
Korea government has made a effort to a reform of the administrative structure
On the basis of New Public Management. New Public Management (NPM), management techniques and practices drawn mainly from the private sector, is increasingly seen as a global phenomenon. NPM reforms shift the emphasis from traditional public administration to public management. Key elements include various forms of decentralizing management within public services (e.g., the creation of autonomous agencies and devolution of budgets and financial control), increasing use of markets and competition in the provision of public services (e.g., contracting out and other market-type mechanisms), and increasing emphasis on performance, outputs and customer orientation.
NPM reforms have been driven by a combination of economic, social, political and technological factors. A common feature of countries going down the NPM route has been the experience of economic and fiscal crises, which triggered the quest for efficiency and for ways to cut the cost of delivering public services.
The crisis of the welfare state led to questions about the role and institutional character of the state. In the case of most developing countries, reforms in public administration and management have been driven more by external pressures and have taken place in the context of structural adjustment programs.
Until recently, NPM was largely seen in developed countries. The 1990s have, however, seen applications of variants of NPM techniques and practices in some developing and transitional economies. Elements discussed in this article include management decentralization within public services, downsizing, performance contracting, contracting out and user charges. These are being applied in crisis states, but not in a very comprehensive and consistent manner.
Downsizing and user fees have been most widely introduced, especially in Africa, and have been closely associated with structural adjustment programs. Autonomous agencies within the public sector are being created in some countries. Examples include autonomous hospitals in Ghana, Zimbabwe and Sri Lanka, as well as the living-off of the customs and excise, and internal revenue departments to form executive agencies in Ghana and Uganda.
Performance contracting and contracting out have become common policy options in a number of crisis states. The latter has been adopted as an instrument to reform state-owned enterprises (SOEs), granting SOE managers more operational freedom while holding them accountable for the performance of the enterprises through a system of rewards and sanctions.
Performance contracts are used across a number of sectors including utilities, transport, telecommunications and agriculture (e.g., in Ghana, Bolivia, Senegal and India). Contracting out is increasingly being adopted in the delivery of public services including urban services (e.g., solid waste management), ancillary health services such as cleaning, laundry and catering (e.g., in Zimbabwe), and road maintenance.
While the adoption of these NPM practices seems to have been beneficial in some cases (e.g., cost savings in contracting out road maintenance in some African countries and in Brazil), there are both potential for and real limitations to applying some elements in crisis states.
The limited experience of NPM in such states suggests that there are institutional and other problems whose persistence may be binding constraints on implementation. The capacity concerns include the ability to manage a network of contracts, the development of monitoring and reporting systems, and the difficult governance and institutional environment which may constrain implementation capacity.
While the new public management approach may not be a panacea for the problems of the public sector in crisis states, a careful and selective adaptation of some elements to selected sectors may be beneficial.
But this idea (results-oriented performance management) is not oriented from the new public management.
In Europe and America has made a effort to performance management. PPBS is its typical example. PPBS is a performance-based or results oriented budgeting system. As with other such systems, PPBS focuses the budget process more on the results to be achieved for the budget allocated. This is unlike the traditional system of resource allocation based on the listing of detailed expenditure requirements.
As an approach to planning and budgeting, PPBS focuses ministry management, government resource allocation decisions; and parliamentary and public scrutiny on:
the purposes of a government activity;
how much it costs to operate that activity;
what is being achieved - by way of goods and services and purposes; and
whether what has been achieved has been worth the cost.
In conclusion, to provide this focus and accountability for results from public expenditure BSC requires an agency operations to be structured by programs and activities setting objectives for these programs and activities, identifying performance indicators, setting targets based on resources allocated or proposed and measuring and reporting on performance achievement.