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The Challenge of Measuring Productivity: A Case Study of Performance Measurement in a Job Training Program

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  • Gerald Marschke
  • Pascal Courty

Abstract

Despite the broad interest in performance measurement during the past 20 years, few state and local governments actually use performance measures as a management tool. A possible reason for this puzzle is that performance measurement systems are difficult to successfully implement. In this paper we consider a case study of a public organization that uses performance measurement to influence decision making, and we analyze local decision makers' responses. We identify a dynamic process by which local decision makers respond in unanticipated and unintended ways, and the designer has to adapt the system to try to eliminate these responses. These results show that performance measurement systems have to be continuously monitored. We argue that this need for constant monitoring may make the use of performance measures uneconomical because they may generate more management problems than they actually solve.

Suggested Citation

  • Gerald Marschke & Pascal Courty, 2002. "The Challenge of Measuring Productivity: A Case Study of Performance Measurement in a Job Training Program," Discussion Papers 02-08, University at Albany, SUNY, Department of Economics.
    • Handle: RePEc:nya:albaec:02-08
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    More about this item

    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J33 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Compensation Packages; Payment Methods
    • D73 - Microeconomics - - Analysis of Collective Decision-Making - - - Bureaucracy; Administrative Processes in Public Organizations; Corruption

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