Welfare service system productivity: the concept and its application

Purpose - The purpose of this paper is to examine productivity at the level of a welfare service system. This approach aims at optimizing the performance of the whole system and to avoid sub‐optimizing the production of individual services or organizations. The paper also aims to develop a definition for the concept of welfare service system productivity and demonstrate its applicability. Design/methodology/approach - First, a literature‐based definition of welfare service system productivity is produced. This definition is applied empirically in a case service system. Empirical data were collected by interviewing a total of 17 managers either in the Social Service Department (City of Helsinki, Finland) or in external service provider organizations. Findings - The findings show that the system‐level productivity concept is a challenging phenomenon in practice. The practitioners representing different parts of the system could not easily see things the same way. This study also shows that the concept can be applied as an analytical tool. The key benefit of lifting the level of analysis from organizational to system level is that new kinds of challenges and areas for improvement are revealed. Practical implications - Despite the conceptual nature of the paper, the purpose is to comprise a managerially relevant approach that helps to increase understanding about the issues affecting system‐level productivity and to identify the potential for productivity improvements in a welfare service system (e.g. by locating productivity barriers). Originality/value - The existing literature on public sector productivity is mainly concentrated on individual organizations whereas system‐level approach is given little attention.