Bottom‐up approach for productivity measurement in large public organizations

Purpose – This study aims to identify means to overcome some of the current problems in public service productivity measurement. The objective is to develop a new method for measuring productivity in large public organizations. Design/methodology/approach – The research is carried out as a constructive case study in the City of Helsinki, Finland. Interviews are used in order to identify practical requirements for measurement. The measurement data from around 200 units is used in testing the method. Findings – The new method applies an approach proposed in the literature. It aggregates measurement information from component measures used at the operative level. Based on test calculations and evaluation it is argued that the new method is managerially more relevant than a conventional method. Research limitations/implications – This study tested the method only to a limited extent. It is necessary to gain more understanding by applying the method in different organizations, and by using longer time periods. Practical implications – Current productivity measures of public services have been criticized for providing information that lacks managerial relevance. The method described in this study aims to improve relevance in two ways. It enables the gathering of more detailed measurement information from the operative levels of large organizations. In addition, it facilitates the use of different measurement methods in different service providing departments and units. Originality/value – Many of the existing studies examine productivity measurement at the macro‐level. This study presents a measurement method that is a step forward in developing more sophisticated measurement systems in public organizations. The study also describes and highlights the role of component productivity measurement at the operative level.