Roles of performance measurement in local government: explorative case studies in Dutch municipalities

Recent research reported a wide-spread adoption of performance measurement (PM) in governmental organisations, but pointed also to a limited use for formal organisational control. This research explores various roles that PM can play in the control of governmental organizations, and aims to explain their actual use. A contingency framework is used, inspired by earlier work of Earl and Hopwood on information management variation. Four different archetypal roles of PM are characterized, and it is being assumed that two types of contextual circumstances lead to different roles. One is labelled as a businesslike context, which emphasizes a rational use of performance information for planning and control, including target setting, monitoring, variance analysis and consideration of corrective actions. The other context is called political, and it highlights the use of performance information for achieving a common understanding between various stakeholders with conflicting interests of what is appropriate in the organization, and it may as well legitimate choices made in the past. Four cases were selected and conducted within one large-size municipality in the Netherlands. The cases diverge in terms of their context – businesslike and political – and in the extent to which activities are standardized. The four cases concern different organizational divisions and were expected to reproduce four different archetypical roles of PM. The case studies show that some roles of PM apparently occur, irrespective of the control context or the level of standardization of activities. This holds for the following roles: diagnostic financial control, influencing and setting future budgets, and progress reporting, some of which are associated with a businesslike control context. However, other PM roles, especially signalling and learning, emerge depending upon contextual circumstances. If a policy field is, for instance, highly politically sensitive, these additional roles are very important, and can under more specific circumstances even lead to tight controls. Key words: performance measurement, public sector, control variation, the Netherlands