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Dynamics of Performance-Measurement Systems

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Author Info
Pascal Courty
Gerald Marschke

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Abstract

We review the principal--agent multi-tasking literature and discuss the relevance of this literature to the implementation of performance measurement in public organizations. Arguably, the most important lesson from the literature is that performance measurement may elicit dysfunctional and unintended responses, also known as gaming responses. We propose an evolutionary model of how organizations manage performance measures when gaming is revealed over time. The model stresses the dynamic nature of the performance-measure selection process--a feature that has been overlooked in the literature. We present evidence from a job training programme that is consistent with the model and we discuss implications for the selection of performance measures. Copyright 2003, Oxford University Press.

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Publisher Info
Article provided by Oxford University Press in its journal Oxford Review of Economic Policy.

Volume (Year): 19 (2003)
Issue (Month): 2 (Summer)
Pages: 268-284
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Handle: RePEc:oup:oxford:v:19:y:2003:i:2:p:268-284

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  1. Siebert, W. Stanley & Zubanov, Nikolay, 2008. "Management Economics in a Large Retail Organization," IZA Discussion Papers 3645, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Gerald Marschke & Pascal Courty, 2004. "A General Test of Gaming," Discussion Papers 04-04, University at Albany, SUNY, Department of Economics. [Downloadable!]
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  3. Gerald Marschke & Pascal Courty, 2004. "Making Government Accountable: Lessons from a Federal Job Training Program," Discussion Papers 04-03, University at Albany, SUNY, Department of Economics. [Downloadable!]
    Other versions:
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This page was last updated on 2009-11-8.

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