Performance Measures Essay

a) Performance measurement is essential in evaluating whether an organisation’s activities are in accordance with it’s goals or strategies. The scope of performance measurement has also extended to include areas of decision making in an organisation. In case of London Borough of Camden, the introduction of performance measurement based on on-time garage collection is likely to combat inefficiencies in the system as intended, thus, encouraging desired behaviour.

However, as emphasised by Otley (2003), it is vital to ‘understand the dynamics of these processes’, implying the need to examine other unintended consequences that performance measures may contribute to. Moreover, it is crucial to acknowledge the implications of a single, composite or a multiple performance measure distinctively in regard to garbage collection service. The following essay will discuss the intended consequences in the context of London Borough of Camden which are imposed by the performance measure as well as present a critical view in terms of any dysfunctional effects that the measure may possess. Finally, it will provide further evaluation regarding how a single indicator may not be adequate under the garbage collection system.

Following the introduction of on-time garbage collection where on-time means collecting garbage within 15 minutes of schedule, it is certain that a greater proportion of garbage will be collected on time in order to meet the targets. This will aim to reduce the garbage collection duration, making the system more efficient in terms of reduced wastage of a valuable resource such as time. This can be further stressed from the fact that for any progress to be measured and resources to be rationally managed, quantifiable variables play a key role in such evaluation processes (Ridgway, 1956).

Furthermore, it will also trigger motivational aspects among the employees, where they will feel more satisfied as a result of achieving targets. This is consistent with the psychological theory where individuals feel intrinsically rewarded by performing better. Perhaps, their performances may also be subject to rewards. Therefore, as implied by the economic theory, individuals are utility maximisers and so will try to increase their rewards by improving their performances. Consequently, serving the purpose of the London Borough of Camden.

However, as pointed out before, performance measurement systems are also subject to undesirable and dysfunctional effects (Otley, 2003). When performance standards are very tightly implemented, it creates a number of negative behavioural impacts. Referring to several accounting studies, it has been found that individuals evaluated under techniques such as budgeting and performance measures amongst others, report higher job related tensions , falsify accounting records and are likely to engage in dysfunctional decision making (Hall, 2015). In the case of on-time