A performance management framework for the public sector: The balanced stakeholder model

Managing performance is a major concern within the public sector. Many systems for performance management, such as the balanced scorecard, have been developed in the private sector but these tend to focus on financial targets and a small range of stakeholders, primarily shareholders. The public sector has a much wider range of objectives and of stakeholders. Previous papers have developed a performance measurement and management system (the “3 E’s” methodology) based on SSM. In this paper, the methodology has been further developed to help identify sets of relevant stakeholders, both internal and external, and then try to balance their particular interests which may be independent, complementary or conflicting. The methodology decomposes activities throughout the organisation; identifies key stakeholders and their interests at each level; views these in terms of four perspectives – goal, operation, stakeholder, capability; and identifies KPIs if required. A case study of its application in a Chinese hospital is included.