The paper 'Effectiveness of Economy Efficiency and Effectiveness as Performance Indicators in Government Agencies' is a wonderful example of a Management Case Study. The process of managing performance involves setting social outcomes and strategic plans that entails focusing strategic plan on social outcomes, identifying value drivers, focusing managerial attention on activities, which contribute most to value and are easiest to influence, tying metrics to value drivers, and measuring progress across balanced scorecard (John et al, 1996 pp 114). It also involves defining and mobilizing meaningful performance targets that ensure that the entire organization is mobilized to deliver on the same priorities.
It also entails assigning clear accountability for effecting change and setting targets, which can help the agency to achieve strategic objectives in addition to optimizing resource allocation with action-oriented plans (Chai, 2009, p. 55). Another aspect of managing performance entails driving value via strategic planning and budgeting. The economy is concerned with inputs and its elements are costs and quality. Finally, managing performance entails monitoring performance and progress. This calls for evaluation or measurement of management (Accenture, pp.
12-18). In the public sector, economy, effectiveness, and efficiency are used to measure performance. Thus, this essay critically analyses the effectiveness of these concepts in the measurement of performance. Discussion The economy enables an agency to balance its need to acquire goods and services for carrying out its functions at a lower cost with an appropriate level of quality. Accountability for the economy enables the agency to know how much it has to spend and on what the money should be spent on (Funnell and Cooper, 1998, pp. 33). Efficiency is concerned with the relationship between input and output with the main aim of maximizing output for a certain amount of input or the relationship of minimizing inputs for a given output (Cutler, Cutler, and Waine, 1997, p.
99). On the other hand, effectiveness is the relationship between input and the final political outcome, which could be welfare, growth, or other priorities of the national government. The term effectiveness is usually used in the context of statements about achievements of policy objectiveness. Thus, effectiveness is how well the outputs attain the stated objectives of that service (Economic Policy Committee, pp.
2). As mentioned above accountability for the economy enables the agency to know how much it has to spend and on what the money should be spent. However, many governments in pursuit of the economy are concerned with reducing expenditure in spite of the social costs brought about with such moves (Cutler, Cutler, and Waine, 1997, p. 108). Even though the economy has of late become synonymous with cost-cutting, many public agencies do not always favor the lowest price tender, service, or item offered for sale (Pollitt and Talbot, 2004, p.
91). The agencies mostly go expenditure, which best meets the needs of the agency and the political objectives (Faustino, 2008, p. 71). Many managers have been found to spend disproportionately at the end of the financial years to consume all money, which they had for spending. Such moves undermine the use of the economy as a measure of performance (Funnell and Cooper and Cooper, 1998, p. 33). Research and development Expenditure of any government institution on education and research and development (R& D) is vital for economic growth.
Since public spending represents an important share of GDP, the efficiency of public spending on education and R& D is an important subject of debate among policymakers in EU countries (Chai, 2009, p. 48). The debate about education revolves around the ability of the school system to ensure that student potential is maximized while responding effectively to changes in the demand for education. On the other hand, the debate about R& D regards the strength of the leverage effect of public expenditure on innovation. In order to use effectiveness as a measure of performance, policy objectives need to be stated in terms of outcomes to be attained.
Effectiveness indicators focus on the impact of services on the community or client (Pollitt and Talbot, 2004, p. 78). The impacts are in terms of quality, accessibility, and other impacts on the client. The quality of service delivered by a public agency can be measured in many ways. The first measure is the degree to which users of the service are satisfied. Another approach is the incidence of service failure. Quality can also be measured using accreditation and the quality of inputs.
Since public agencies are concerned with the provision of essential services such as education, health, housing, and administration, the services ought to be accessible to its users (Cutler, Cutler, and Waine, 1997, p. 88). The assessment of accessibility can be done with reference to waiting periods to enter the service, the affordability of the service, or physical accessibility. In some areas, the accessibility of services to target groups is usually important. However, this has a limitation in that accessibility rarely takes into account any variation in target groups’ demands for such services as compared with the rest of the community.
Concerning other impacts on the client, many service areas focus on key objectives, which influence the lives of the client group. However, this raises an issue with how such objectives can be arranged hierarchically. Thus, extend to which the outcomes fulfill the policy objectives can be said to be the effectiveness of the agency. Based on this, effectiveness can to some extend provide a basis for measuring the performance of a public agency.
(Government Service Provision, pp. 35-37)
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