The Effects of Performance Measurement Foci : An Exploratory Study Based on Information from Danish Municipalities

The purpose of this paper is to explore how managers within the public sector can use different types of metrics for increasing performance. Data collected from a survey of 349 respondents, from local government organizations are tested in a structural equation modelling using partial least squares. The chosen associations in this setting show an adjusted R² of 64 percent of our empirical model specification. More importantly, these associations reveal important new insights about performance measures that public sector managers can apply. Specifically, the results indicate that metrics within benchmarking and strategy execution are the most important ones in relation to managerial performance through the intervening variables of innovation and learning and cost allocation techniques. In addition, we also find that the adoption of specific management accounting concepts to have a negative influence. These findings have important implications for policy-makers looking to improve public sector performance